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A  XREATISE^ 

ON 

THE    LAW    AND    PRACTICE 

OF 

Foreclosing  Mortgages 

ON   REAL  PROPERTY, 

AND  OF 

REMEDIES  COLLATERAL  THERETO, 
WITH  FORMS, 

BY 

CHARLES  HASTINGS  WILTSIE 

OF   THE   ROCHESTER   BAR. 


A  suppleme:nt 

BRINGING     THE     WORK     DOWN     TO     MARCH,      1 897,      AND     ADDITIONAL 

CHAPTERS    ON 

Mortgage  Redemptions 

BY 

JAMES     M.     KERR 

OF  THE  NEW  YORK  BAR, 

Author  of  "Kerr  on  Real  Property;"  "Kerr  on  Business  Corporations;"  "Kerr 

on  Homicide,"  etc.,  etc. 


IN  TWO  VOLUMES, 

VOL.  I. 


ROCHESTER,    N.    Y. 

WILLIAMSON  LAW  BOOK  COMPANY. 

T897. 


..1 

T 


COPYRIQUT 
BY 

CHARLES  HARTINGS   WILTSIE, 
1889. 

COPYRIGHT 

BY 

WILLIAMSON  LAW  BOOK   COMPANY. 
^897. 


TO 


FRANCIS   A.  MACOMBER,  LL.  tK 

on  OF   THK   JUSTICES    OF    THK    SUPBEMB   COURT   OF   THK    STAT* 
OF    NEW    YORK. 

®j)is  iSook  i«  3at8pKt£ullp  3n«rtbM 
bt  the  AUTHOB- 


ni!  mr  r^ 


PREFACE. 


The  generous  and  appreciative  reception  given  by  the 
legal  profession  to  the  author's  original  monograph  on 
Parties  to  Mortgage  Foreclosures  and  Their  Rights  and 
Liabilities,  has  been  his  chief  encouragement  during  the 
past  two  years  in  preparing  this  treatise,  and  he  bespeaks 
for  this  more  elaborate  endeavor  the  same  kind  treatment 
that  was  given  to  his  first  work.  In  presenting  this 
treatise,  it  is  desired  to  call  the  special  attention  of  the 
profession  to  the  fact  that  the  original  monograph  on 
Parties  has  been  included  in,  and  superseded  by  this  work. 
The  general  plan  and  style  of  the  monograph  have  been 
followed  in  these  pages.  The  same  original  and  exhaustive 
investigation  which  was  given  to  that  narrow  part  of  the 
general  subject  of  the  law  and  practice  of  foreclosing 
mortgages,  has  here  been  devoted  to  every  part  of  the 
subject. 

This  work  is  not  a  second  edition  of  the  first  one,  but 
is  distinctively  a  new  treatise — covering  every  part  of  the 
law  and  practice  of  foreclosing  mortgages,  from  the  com- 
plaint through  the  distribution  of  surplus  moneys,  and 
including  such  collateral  remedies  as  the  appointment  of 
a  receiver. 

It  is  adapted  to  the  practice  of  every  state  in  the  Union, 
and  especially  of  those  states  where  foreclosures  are  con- 
ducted by  equitable  actions  and  sales.  Over  eight  thousand 
cases  have  been  cited ;  about  one-third  of  these  have  been 
taken  from  the  reports  of  the  state  of  New  York.     Every 


VI  PREFACK 

case  cited  has  been  tested  and  examined  three  different 
times,  with  a  view  to  making  the  work  accurate  in  details, 
as  well  as  exhaustive,  and  as  far  as  possible  original. 
Digests  and  general  text-books  have  been  used  very  little. 
The  work  has  been  written  up  from  the  decisions  of  the 
courts  as  contained  in  the  state  reports;  consequently,  a 
great  amount  of  new  matter  has  been  obtained  that  can 
be  found  in  no  other  text-book. 

In  the  foot-notes  the  limitations  and  modifications  of 
general  principles,  and  the  special  and  peculiar  instances 
are  given  in  full.  The  practicing  attorney — for  whom 
this  book  has  been  written — is  familiar  with  general  prin- 
ciples ;  what  he  wants  are  the  peculiar  and  special  cases. 
The  date  of  every  case  has  been  placed  after  its  citation 
at  the  suggestion  of  the  publishers,  a  feature  that  it  is 
believed  will  add  greatly  to  the  convenient  use  of  the 
book. 

The  author  desires  to  acknowledge  his  great  indebted- 
ness to  James  M.  Kerr,  Esq.,  for  assistance  in  preparing 
a  large  part  of  the  work ;  indeed,  without  his  assistance 
it  would  hardly  have  been  possible  for  the  author  to 
have  found  time  from  the  duties  of  an  active  practice 
to  prepare  the  book  with  that  exhaustiveness,  completeness 
and  accuracy  which  he  hopes  the  legal  profession  will  find 
to  characterize  it.  FREDERICK  B.  Hall,  Esq.,  also  has 
rendered  valuable  assistance  in  testing  and  verifying  nearly 
every  citation  in  the  book,  and  in  preparing  the  appendix 
of  forms. 

Rochester.  N.  Y..  May,  1889. 


TABLE   OF   CONTENTS, 


CHAPTER  I. 

Page 
NATURE  AND  OBJECT  OF  FORECLOSURE, 1 


CHAPTER    II. 
COURTS,  JURISDICTION  AND  VENUE, 14 

CHAPTER  III. 
WHEN  FORECLOSURE  MAY  BE  COMMENCED,    ....      28 

CHAPTER  IV. 
WHEN  RIGHT  OF  ACTION  BARRED, 67 

CHAPTER   V. 
PARTIES  PLAINTIFF 80 

CHAPTER    VI. 
PARTIES  DEFENDANT— NECESSARY  TO  PERFECT  THE  TITLE 
Owners  of  the  Fee  Title, 132 

CHAPTER   VII. 
PARTIES  DEFENDANT— NECESSARY  TO  PERFECT  THE  TITLE. 
Subsequent  Mortgagees  and  Lienors, 187 

CHAPTER   VIII. 
PARTIES  DEFENDANT— NECESSARY  TO  PERFECT  THE  TITLE. 

Parties  Holding  Part  or  Equitable  Interests  in  the  Mort- 
gage Under  Foreclosure,  or  in  Liens  Contemporary  there- 
with, Not  Joining  as  Plaintiffs,  Necessary  Defendants,    213 


Viii  TABLE   OF   CONTENTS. 

CHAPTER  IX. 

PARTIES  DEFENDANT. 

Page 

Pbiob  Moktgageks  and  Adverse  Claimants, 225 

CHAPTER   X. 

PARTIES  DEFENDANT— LIABLE  FOR  THE  MORTGAGE  DEBT. 

Genekal  Principles— Points  in  Pbactice 235 

Pabtieb  Originally  Liable, 249 

CHAPTER   XI. 
PARTIES  DEFENDANT— LIABLE  FOR  THE  MORTGAGE  DEBT. 
Parties  Subseqitentlv  Llable, .    *    t    .    265 

CHAPTER   XII. 
COMMENCEMENT  OF  ACTION, 292 

CHAPTER    XIII.    • 
THE  COMPLAINT,        326 

CHAPTER  XIV. 
LIS  PENDENS-NOTICE  OF  PENDENCY  OF  ACTION,       .     859 

CHAPTER   XV. 
ANSWERS  AND  DEFENCES. 

Who  mat  Answer — Defect  in  Pabties — Action  at  Law  on 
Bond — Defective  Execution  of  Mortgage — Infancy, 
Insanity,  Iokobance,  Alteration, 880 

CHAPTER    XVI. 
ANSWERS  AND  DEFENCES. 

CONBIDHRATION — USDBY — DEFENCES  AGAINST   ASSIGNEE  OF  MOBT- 

OAGB,  AND  Against  Pobchaseb  of  Negotiable  Papeb  Secubed 

BY  Mortgage, 403 


TABLE    OF    CONTENTS.  IX 

CHAPTER   XVII. 

ANSWERS  AND  DEFENCES. 

Page 

Fraud,  Misrepbesentation,  Mistake  and  Duress,      ....    428 

CHAPTER    XVIII. 

ANSWERS  AND  DEFENCES. 

Counter-claims  and  Estoppels, 450 

CHAPTER    XIX. 

ANSWERS  AND  DEFENCES. 

Right  of  Action  Not  Accrued  —  Mortgage  Debt  Not  Due  — 
Payment  and  Discharge  —  Denial  of  Personal  Liability 
— Release  of  Part  op  Mortgaged  Premises, 475 

CHAPTER    XX. 

ANSWERS  AND  DEFENCES. 

Adverse  and  Paramount  Claims  of  Title  —  Defective  Title 
— Fixtures  —  Eviction  —  Outstanding  Title  —  Want  of 
Title, 500 

CHAPTER  XXI. 

PRACTICE  ON  FAILURE  TO  ANSWER— DEFAULT— PRACTICE 
ON  TRIAL  AFTER  ISSUE   JOINED. 

Reference  to  Compute  Amount  Due — Powers  and  Duties  op 
Referee  —  Report  of  Referee  —  Decree  of  Foreclosure 
AND  Sale— Proceedings  on  Trial, 528 

CHAPTER    XXII. 

SALE  OF  MORTGAGED  PREMISES. 

Decree  of  Sale  —  Officer  Making  Sale  —  Notice  op  Sale  — 
Time  op  Sale— Place  op  Sale— Terms  of  Sale— Stay  op 
Sale, 563 

CHAPTER    XXIII. 

SALE  OF  MORTGAGED  PREMISES  IN  PARCELS. 

Discretion  op  Court— When  to  be  J^Lvde— Part  Only  Due — 
Sale  for  an  Installment — Stayed  on  Payment — Future 
Defaults, 583 


Xll  TABLE    OF    CONTENTS. 

CHAPTER     XXXVI. 

FEES,   COSTS  AND  DISBURSEMENTS. 

Page 

Fbe8  op  Rbferek  Selling — Costs  in  General — When  Discre- 
tionary—  Who  May  Have  —  Prior  and  Junior  Lienors — 
Guardian  ad  Litem  —  Stipulation  for  Counsel  Fee  — 
Statutory  Foreclosure — Costs  in  Distrxbuteng  Surplus,    935 


APPENDIX  OP  FORMS, 967 


MORTGAGE  FORECLOSURES. 


CHAPTER  I. 

NATURE  AND  OBJECT  OF  FORECLOSURE. 


g  1.  Definition. 
2.  History. 

8.  Methods  of  foreclosure. 
4.  Foreclosure  by  entry  and  pos- 
session. 
6.  Strict  foreclosure. 

6.  Statutory  foreclosure. 

7.  Action  in  equity. 

8.  Statutory  regulations — terms  of 

mortgage  contravening. 


§  9.  Early  practice  in  Ne^v  York. 

10.  Concurrent  remedies. 

11.  Results  of  foreclosure. 

12.  Effects  of  foreclosure  and  sale 

on  title. 

13.  Who  barred  by  foreclosure. 

14.  Subsequent  incumbrancers. 

15.  Foreclosure  as  payment    of 

debt. 


§  I.  Definition. — The  foreclosure  of  a  mortgage  is  one 
of  the  remedies  of  the  mortgagee,  to  enforce  the  payment  of 
his  debt,  and  has  been  defined  in  general  terms  as  "the 
process  by  which  the  mortgagee  acquires  or  transfers  to  a 
purchaser  an  absolute  title  to  the  property  of  which  he  has 
previously  been  only  a  conditional  owner,  or  upon  which  he 
has  previously  had  a  lien  or  incumbrance.*" 

When  it  is  familiarly  said  that  a  foreclosure  invests  the 
mortgagee  with  the  title  and  interest  of  the  parties  foreclosed, 
a  practical  effect  is  described  rather  than  a  legal  proposition 
defined.  As  between  the  parties  plaintiff  and  defendant  an 
action  or  proceeding  for  foreclosure  passes  the  mortgagor's 
title  as  effectually  as  a  judicial  sale,  because  it  extinguishes 
his  entire  title  and  interest.  All  that  is  formally  accom- 
plished however,  is  the  extinction  of  a  right  and  the  interposi- 
tion of  a  perpetual  bar  against  the  parties  foreclosed ;  the 


'  2  Hill.  Mort.  1.  See  Packer  v. 
Rochester  &  S.  R.  R.  Co.,  17  N.  Y. 
283.  287  (1858) ;  Goodman  v.  White, 
26  Conn.  317,  322  (1857);  McCormick 


V.  Wilcox,  25  HI.  274(1861);  Weiner 
V.  Heintz,17  111.  259  (1855);  CampbeU 
V.  Carter,  14  HI.  286  (1853). 


(U 


2  DEFINITION   AND    HISTOEY.  [§  2. 

decree  only  professes  to  close  a  door  which  equity  had 
before  kept  open,  not  to  confer  a  right  or  to  pass  a  title.  It . 
has  been  said  for  this  reason  that  the  foreclosing  creditor  by 
his  action  succeeds  to  nothing,  acquires  no  estate,  and 
purchases  no  right.*  The  decree  merely  extinguishes  the 
mortgagor's  equity  of  redemption,  and  does  not  affect  a 
title  superior  to  the  mortgage.'  But  a  statute  giving  perfect 
titles  to  purchasers  upon  mortgage  foreclosure  sales  does 
no  injustice  to  general  creditors,*  and  is  not  necessarily  con- 
trary to  the  general  principles  of  equity. 

Every  foreclosure  has  a  point  of  time  at  which  the  title  to 
the  mortgaged  premises  is  transferred  absolutely  from  the 
mortgagor  and  his  subsequent  lienors  to  a  purchaser  or  to 
a  party  who  sustains  the  relations  of  a  purchaser  to  the 
premises,  whether  the  foreclosure  be  conducted  by  action 
and  judicial  sale,  entry  and  possession,  advertisement  or 
otherwise.  The  principal  object  of  a  foreclosure  is  accom- 
plished only  when  such  a  transfer  has  been  effected.  Other 
ends  may  also  be  sought,  as  a  personal  judgment  of  defi- 
ciency, but  the  extinguishment  of  the  mortgage  and  the 
production  of  a  perfect  title  is  the  first  purpose  of  every 
method  of  foreclosure. 

§  2.  History. — ^The  process  of  foreclosure  has  been  co- 
ordinate in  development  with  the  law  of  mortgages.  Some 
writers  find  traces  of  the  principles  of  hypothecation, 
redemption  and  foreclosure  among  the  early  Israelites.  But 
the  civil  law  of  the  Roman  lawyers  is  the  earliest  known 
system  of  jurisprudence  in  which  the  rights  connected  with 
pledges  were  fully  and  accurately  defined. 

Civil  Law  Doctrines. — Pignuswdcs  the  technical  term  for  a 
pledge  which  passed  into  the  possession  of  the  creditor,  and 
gradually  came  to  be  applied  only  to  movables  or  chattels ; 
while  hypotheca  referred  to  a  pledge  which  continued  to  be 
held  by  the  debtor,  and  was  applied  only  to  immovables  or 
landed  property.    These  were  the  two  methods  known  to 


>  Goodman  v.  White,  26  Conn.  317,  322  (1857). 
•  McCormick  v.  Wilcox,  25  HI.  274,  276  (1861). 
»  Cook  V.  Detroit  G.  H.  «fe  M.  Ry.  Co.,  48  Mich.  849  (1880). 


§  2.]  HISTORY COM]VION    LAW.  3 

the  Roman  law  for  the  transfer  of  property  as  collateral 
security.  No  title  to  the  property  passed.  Failure  of 
payment  at  the  appointed  time  did  not  work  a  forfeiture. 
Principles  of  equity  favored  the  debtor  so  that  his  misfortune 
should  not  become  the  fortune  of  his  creditor.  A  well 
regulated  procedure  or  practice  of  foreclosure,  founded  upon 
notice  to  parties  interested,  open  decrees  of  court  and  pub- 
licity of  sale  or  entry,  grew  up  with  the  law  of  pledges,  so 
that  the  loss  to  both  debtor  and  creditor  would  be  the 
least  possible'.  The  civil  law  of  pignus  and  hypotheca  is  the 
root  of  the  law  of  mortgages  and  of  the  procedures  for 
foreclosure  among  all  the  Latin  races  of  the  present  time. 

Common  Law  Doctrines. — The  ablest  historians  are  at 
variance  as  to  whether  the  Anglo-Saxons  recognized  pledges 
of  real  property.  The  law  of  feuds  and  tenures  was  decidedly 
opposed  to  mortgages.  The  Norman  conquest  and  the 
apportionment  of  the  kingdom  of  England  by  the  Conqueror 
rendered  them  practically  impossible  until  the  reign  of 
Edward  I.,  when  tenures  and  alienations  of  land  were  greatly 
simplified. 

With  the  later  development  of  the  common  law  and  its 
doctrines  of  landed  estates,  two  kinds  of  realty  pledges  came 
to  be  recognized.  The  vivum  vadium  contained  a  continuous 
right  of  redemption,  and  permitted  the  creditor  to  enter  into 
immediate  possession  and  to  collect  the  rents  and  profits  for 
the  reduction  and  payment  of  the  debt ;  the  debtor  could 
re-enter  at  any  time  on  liquidation  of  the  debt.  This  form 
of  mortgage  never  came  into  general  use.  The  mortuum 
vadium  was  always  made  upon  definite  and  exact  terms  of 
forfeiture ;  and  if  the  conditions  were  not  punctually  kept, 
the  title  passed  absolutely  and  forever  from  the  debtor 
to  the  creditor.  This  form  of  landed  security  was  extremely 
severe  and  often  grossly  unjust  to  the  debtor.  The  spirit 
of  the  common  law  was  inexorable,  and  allowed  no  redress 
to  the  unfortunate  debtor.  It  firmly  held  that  contracts  of 
hypothecation  with  definite  terms  of  forfeiture  should  be 
enforced,  and  it  allowed  no  remedy  to  restore  the  debtor  to 


Story's  Eq.  Jur.  §§  1005,  1009-1024. 


4  HISTORY GROWTH    OF    EQUITY.  [%  3. 

his  estate  or  to  have  the  estate  sold  at  public  vendue  to  the 
highest  bidder.  But  with  the  appearance  of  the  courts  of 
of  chancery  these  severe  rules  were  greatly  modified  and 
ultimately  fell  into  entire  disuse.' 

Growth  of  Equity. — The  mortuum  vadium  is  doubtless 
the  root  from  which  our  modern  mortgage  has  grown.  Its 
severity  and  unjustness,  however,  rendered  it  odious  and 
unpopular  until  the  appearance  of  that  new  jurisdiction  which 
was  exercised  by  the  learned  chancellors  of  England.  These 
jurists  sought  continually  to  engraft  the  enlightened  and 
equitable  principles  of  the  civil  law  of  mortgages  upon  the 
severe  rules  of  the  common  law.  It  is  believed  that  the  first 
encroachments  by  the  courts  of  chancery  were  in  the 
reign  of  Queen  Elizabeth  ;  but  their  powers  were  not  fully 
exercised  until  the  time  of  James  I.  Great  confusion 
resulted  from  these  concurrent  jurisdictions  for  a  number  of 
years,  but  the  justness  and  equity  of  the  decrees  of  the 
chancellors  gradually  came  to  be  recognized  by  the  courts 
of  common  law  and  were  acquiesced  in  by  them.  The  rule 
came  to  be  fixed  and  settled  as  part  of  the  law  of  the 
Kingdom,  that  "  once  a  mortgage,  always  a  mortgage,"  and 
that  no  mortgage  could  be  enforced  without  a  decree  of  the 
chancellors.  The  common  law  courts  waived  entirely  their 
former  exclusive  jurisdiction  over  mortgages,  and  the  "equity 
of  redemption"  became  a  fixed  right  in  every  mortgagor.  To 
foreclose  or  extinguish  this  right,  the  earliest  method  used 
was  entry  and  possession,  and  from  it  have  been  developed 
the  various  procedures  and  practices  used  in  the  several 
states.' 

§  3.  Methods  of  foreclosure. — There  are  four  principal 
methods  by  which  mortgages  may  be  foreclosed  in  the 
United  States,  all  depending  upon  equitable  principles 
in  their  origin  and  proceeding  upon  equitable  principles  in 
their  practice.  i.  Foreclosure  by  entry  and  possession 
originally  required  the  actual  entry  upon  and  possession  of 
the  mortgaged  premises ;  this  procedure  has  been  greatly 


•  Coote  on  Mortgages,  4-32. 

•  Coote  on  Mortgages,  4-22 ;  4  Kent  Com  158. 


§  4.]  JIETHODS    OF   FORECLOSUTIE.  5 

assisted  by  the  writ  of  entry,  which  is  much  in  the  nature 
of  an  equitable  action,  though  nominally  an  action  at  law. 
Foreclosure  by  entry,  however,  is  mainly  confined  to  the 
New  England  and  a  few  of  the  southern  states.  2.  Strict 
foreclosure,  or  foreclosure  without  a  sale,  was  a  procedure 
greatly  used  in  England  at  one  time,  and  its  purpose  was 
to  perfect  in  the  mortgagee  an  absolute  title,  instead  of  to 
obtain  a  decree  of  sale  ;  the  courts  in  most  states  recognize 
this  method,  but  allow  its  use  only  in  exceptional  cases, 
owing  to  its  severity  upon  the  rights  of  the  owner  of  the 
equity  of  redemption.  3.  Statutory  foreclosure,  or  foreclosure 
by  advertisement,  is  a  procedure  provided  in  nearly  every 
state  by  its  legislature,  all  the  steps  in  which  are  specifically 
prescribed  by  statute.  Owing  to  its  extreme  technicality 
and  insufficiency  of  remedy,  it  is  seldom  practiced  where 
an  equitable  action  is  allowed.  4.  Ati  equitable  action  is  now 
the  almost  universal  procedure  among  the  English-speak- 
ing races,  for  the  foreclosure  of  a  mortgage.  So  broad  and 
comprehensive  is  the  process  of  foreclosure  by  an  equitable 
action,  that  a  consideration  of  foreclosures  with  reference  to 
that  procedure,  will  also  cover  the  subject  where  the 
procedure  is  by  entry  and  possession  or  by  strict  foreclosure, 
so  that  attention  need  not  be  given  separately  to  those  two 
methods  ;  while  in  statutory  procedure  special  provisions  are 
made  as  to  each  step.  Where  no  provisions  are  made, 
equitable  rules  control.  The  subject  of  this  work  is  thus 
reduced  substantially  to  mortgage  foreclosures  by  equitable 
action.  Such  variations  as  may  exist  in  the  other  methods 
will  be  noticed  in  their  proper  connections. 

§4.    Foreclosure    by    entry    and    possession. — The 

earliest  procedure  under  this  form  of  foreclosure  required 
an  open  and  visible  entry  and  possession  by  the  mortgagee 
or  his  agent,  upon  the  premises  in  the  presence  of  witnesses, 
but  the  present  practice  requires  only  a  constructive  entry. 
The  purpose  of  the  entry,  whether  actual  or  constructive,  is 
to  give  notice  to  the  mortgagor,  and  others  interested,  that 
the  equity  of  redemption  will  be  extinguished  unless  the  debt 
secured  is  paid  and  the  terms  of  the  mortgage  are  fulfilled. 
Constructive    entry  is   now   generally   made   by   recording 


6  METHODS STRICT STATUTORY.  [§§  5-6. 

a  certificate  or  declaration  of  entry  in  the  proper  public 
office  and  by  publishing  notice  of  the  same  in  a  newspaper. 
At  the  expiration  of  from  one  to  three  years  of  undisputed 
peaceable  possession,  the  title  of  the  mortgagee  becomes  an 
absolute  fee. 

In  form  this  procedure  is  a  suit  at  law,  though  controlled 
by  equitable  rules,  except  where  statutory  provisions  have 
prescribed  an  exact  practice.  The  various  details  of  practice  in 
the  several  states  will  be  noticed  in  their  proper  connections. 

§  5.  Strict  foreclosure. — This  is  a  practice  of  estoppel 
upon  the  mortgagor.  It  is  technically  and  literally  a 
foreclosure  or  extinguishment.  It  permits  neither  a  sale 
nor  redemption ;  it  requires  payment  of  the  debt  within  a 
certain  time  after  notice  or  the  absolute  and  final  forfeiture 
of  the  title.  It  is  the  severest  of  all  processes  upon  the 
mortgagor;  strictly  legal,  rather  than  equitable  principles, 
control  the  practice.  It  is  rarely  used  in  those  states  where 
courts  of  equity  have  a  strong  influence.  Indeed,  it  is  a 
serious  question  in  New  York  whether  strict  foreclosures 
have  not  been  abolished  by  the  Code  of  Civil  Procedure.* 

In  most  states,  where  allowed  at  all,  the  practice  is  used 
only  to  remedy  defective  foreclosures,  as  where  necessary 
parties  have  been  omitted  in  an  equitable  action.  The 
decree  is  generally  to  the  effect  that  the  defendants  shall 
redeem  within  a  certain  time  fixed  by  the  court,  or  be 
absolutely  barred  of  every  interest  in  the  property  and  of 
all  right  to  redeem. 

§  6.  Statutory  foreclosure. — Nearly  every  state  pre- 
scribes in  its  statutes  a  method  of  foreclosure  by  advertisement 
and  sale,  pursuant  to  the  power  of  sale  contained  in  nearly  all 
mortgages.  This  is  in  addition  to  the  procedure  by  an 
equitable  action  which  is  practiced  in  nearly  every  state. 

In  colonial  times  sale  under  power  contained  in  the 
mortgage  was  the  only  practice  employed,  and  so  deeply 
rooted  did  it  become  in  the  real  estate  law  and  titles  of  that 
period  that  it  has  ever  remained  as  a  method  of  foreclosure. 
The  statutes  regulating  the  practice  have  varied  greatly  at 


>  N.  Y.  Code  Civ.  Proc.  §  1626. 


§§  7-8.]  METHODS ^EQUITABLE   ACTION.  7 

different  times  and  are  alike  in  no  two  of  the  states.  The 
procedure  is  generally  simple  and  cheap,  but  not  so  quick 
and  certain  in  results  as  an  equitable  action.  Being  statutory 
it  is  extremely  technical  and  liable  to  produce  defective 
titles.  It  is  employed  most  frequently  in  pioneer  sections 
and  in  localities  where  real  estate  has  but  little  value  and  is 
of  slow  sale. 

§  7.  Action  in  equity. — An  equitable  action  is  now  the 
almost  universal  procedure  in  the  United  States  for  the 
foreclosure  of  a  mortgage.  It  is  the  most  direct  and  certain 
practice,  affords  the  largest  opportunities  for  the  adjustment 
and  enforcement  of  the  rights  of  all  parties  interested,  is 
the  quickest  in  final  results,  produces  the  strongest  and 
firmest  titles,  and  does  the  greatest  justice  to  both  mortgagor 
and  mortgagee.  The  law  of  mortgages  and  of  equitable 
foreclosures  is,  indeed,  as  has  been  remarked  by  Chancellor 
Kent,  "  one  of  the  most  splendid  instances  in  the  history  of 
our  jurisprudence  of  the  triumph  of  equitable  principles  over 
technical  rules,  and  the  homage  which  those  principles  have 
received  by  their  adoption  in  the  courts  of  law."  *  The 
history  of  equitable  foreclosures  is  the  history  of  mortgages. 
Every  development  and  advancement  in  the  principles  of 
equity  law  and  practice  have  resulted  in  corresponding 
improvements  in  equitable  foreclosures. 

It  is  to  this  method  of  foreclosure  that  this  work  will  be 
principally  devoted. 

§  8.  Statutory  regulations — Terms  of  mortgage  con- 
travening.— All  of  the  above  methods  of  foreclosure  are 
greatly  modified  in  the  different  states  by  statutory  provisions. 
Where  such  provisions  are  in  force,  a  power  of  sale  or  other 
agreement  in  the  mortgage,  that  it  shall  be  foreclosed  in  any 
other  manner  than  that  prescribed  by  the  statute,  will  be 
void ;"  the  statute  in  such  cases  must  be  strictly  followed.* 


»  4  Kent  Com.  158.  Blackf.  (Ind.)  13  (1843) ;  Pease  v. 

»  Chase  v.  McLellan,  49  Me.   375,  Benson,  28  Me.  386  (1848) ;  Robbing 

378(1861).  V.    Rice,   73   Mass.    (7    Gray)   303 

» Sherwood  v.  Reed,  7  Hill,  (N.  (1856). 
Y.)  481  (1844) ;  Williamson  v.  Doe,  7 


8  CONCTJEEENT   EEJIEDIES.  [§§  9-10. 

§  9.  Early  practice  in  New  York. — In  New  York  it 
was  formerly  the  rule  that  a  mortgagee  had  three  remedies, 
all  or  either  of  which  he  could  pursue  until  his  debt  was 
satisfied.  He  could  (i)  maintain  an  action  at  law  on  the  bond ; 
(2)  obtain  possession  of  the  rents  and  profits  of  the  mortgaged 
lands  by  ejectment  ;  or,  (3)  file  a  bill  in  chancery  to  foreclose 
the  mortgagor's  equity  of  redemption  and  sell  the  lands  to  pay 
the  debt.'  He  could  even  pursue  all  these  remedies  at  the  same 
time.  But  these  remedies  have  been  greatly  modified  by 
statute ;  and  the  action  of  ejectment  can  no  longer  be 
maintained  by  the  mortgagee  for  the  recovery  of  the 
mortgaged  premises." 

From  the  notes  of  the  revisors  we  learn  that  the  object  of 
this  statute  was  to  compel  the  mortgagee  to  resort  to  equity 
to  enforce  his  security,  and  to  prevent  the  unnecessary 
multiplicity  of  suits.* 

He  may  still,  however,  bring  a  personal  action  to  recover 
the  amount  of  the  mortgage  debt,  but  on  judgment  in  such 
suit  he  will  not  be  permitted  to  sell  the  equity  of  redemption 
of  the  mortgagor,* 

§  ID.  Concurrent  remedies. — In  addition  to  the  remedy 
by  an  action  to  foreclose  his  mortgage,  the  mortgagee  may 
bring  a  suit  on  the  bond,  which  the  mortgage  was  given  to 
secure  and  which  is  the  primary  instrument  of  indebtedness. 
He  may,  at  his  option,  proceed  by  suit  on  the  bond,  or  by 
an  action  to  foreclose  the  nriortgage,  but  he  can  not  avail 
himself  of  both  remedies  at  the  same  time ;  and  the 
commencement  of  an  action  of  foreclosure  prevents  a 
subsequent  suit  on  the  bond,  except  in  extraordinary  cases, 
and  by  express  permission  of  the  court.'     But  an  action  of 


'  Jackson  v.  Hull,  10  Jolins.(N.Y,)  Fiedler  v,   Darrin,  50   N,  Y.   437, 

481  (1813);  Jones  v.  Conde,  6  Johns,  444  (1872). 

Ch.  (N.  Y.)  77  (1823) ;  Dunkley  v.  a  3  N.  Y.  Rev.  Stat.  673. 

VanBuren,  3  Johns.  Ch.  (N.  Y.)  330  *  2    N.  Y.    Rev.    Stat,    868.    §31. 

(1818);  Hughes  V.  Edwards,  22  U.S.  See  also  Tice  v.   Annin,  2  Johns. 

(9  Wheat.)  489  (1824);  bk.  6  L.  ed.  Ch.  (N.  Y.)  125  (1816). 

142.  '-  2  N.  Y.  Rev.  Stat,  191, 199,  §153; 

2  See  2  N.  Y.  Rev.  Stat.  312,  321,  N.  Y.  Code  Civ.  Proc.  §g  1628-1630. 

§  57  ;  Hubbell  v.  Moulson,  53  N.  Y.  See  Nichols  v.  Smith,  42  Barb.  (N. 

225  (1873) ;    6.  c.  13  Am.  Rep.  519  ;  Y.)  381   (1864) ;  Suydam  v.  BarUe, 


§  11.]  EESTTLTS    OF   FOEECLOSTJEB.  9 

foreclosure  may  be  commenced  after  a  suit  on  the  bond, 
provided  it  is  brought  before  judgment  in  such  suit.  The 
consequences  of  bringing  a  suit  to  foreclose  while  one  is 
pending  on  the  note  or  bond,  will  be  to  stay  all  proceedings 
in  the  former  suit,  unless  special  permission  of  the  court, 
to  proceed,  is  obtained.'  Thus  where  an  action  was 
commenced  in  the  Superior  Court  of  New  York  City  to 
recover  the  amount  of  interest  coupons  upon  bonds  secured 
by  a  trust  mortgage,  and  afterwards,  but  before  the 
determination  of  the  suit,  the  trustee  commenced  an  action 
in  the  Supreme  Court  to  foreclose  the  mortgage  for  the 
benefit  of  all  the  bond-holders,  who,  including  the  plaintifl 
in  the  former  action,  were  made  parties,  it  was  held  that 
the  Supreme  Court  had  power,  in  its  discretion,  to  stay  the 
proceedings  in  the  Superior  Court  suit  until  the  determina- 
tion of  the  foreclosure  suit.* 

§  II.  Results  of  foreclosure. — Two  purposes  are  now 
generally  sought  to  be  accomplished  in  foreclosures ;  first, 
the  extinguishment  of  the  title  in  the  mortgagee  and  the 
mortgagor,  and  those  claiming  under  them,  so  as  to  offer  a 
perfect  title  at  the  sale,  or  such  a  title  as  a  court  will  compel 
a  bidder  to  accept ;  this  purpose  aims  at  exhausting  every 
remedy  against  the  land  for  collecting  the  mortgage  debt, 
and  when  foreclosures  were  merely  actions  in  rem,  as  origin- 
ally, they  had  no  other  purpose  or  result ;  second,  the 
recovery  of  a  personal  judgment,  for  any  deficiency  that  may 
remain  after  the  proceeds  of  a  sale  are  applied  to  the  pay- 
ment of  the  mortgage  debt,  against  all  who  have  in  any  way 
become  liable  for  the  money  secured  by  the  mortgage, — a 
purpose  accomplished  originally  only  in  actions  in  personam. 
The  union  of  these  two  results  in  one  judgment  is  quite 


9  Paige  Ch.   (  N.  T. )  294  (1841) ;  137  (1841) ;  s.  c.  37  Am.  Dec.  881 ; 

Williamson  v.  Champlin,   8   Paige  Williamson  v.  Champlin,    8  Paige 

Ch.  (N.  Y.)  70  (1839)  ;  s.  c.  1  Clarke  Ch.  (N.  Y.)  70  (1839) ;  s.  c.  1  Clarke 

Ch.  (N.  Y.)  9 ;  Marx  v.  Davis,  56  Ch.  (N.  Y.)  9  (1839) ;   Pattison  v. 

Miss.  745  (1879).  Powers,  4  Paige    Ch.  (N.  Y.)  549 

1  See  Engle  v.  Underhill,  3  Edw.  (1834). 

Ch.  249  (1838);  Suydam  v.  Bartle,  9  *  Cushman  v.  Leland,  93  N.  T. 

Paige  Ch.  (N.  Y.)  294  (1841) ;  Shu-  652  (1883). 
felt  V.  Shufelt,  9  Paige  Ch.  (N.  Y.) 


10  EFFECTS    OF    FORECLOSURE   ON   TITLE.  [§  12. 

recent,  and  is  allowed  only  by  special  statute.  The  effect  ol 
the  first  purpose  is  declared  in  most  states  by  statute.  In 
New  York  it  is  provided  that  "  a  conveyance  upon  a  sale,  made 
pursuant  to  a  final  judgment,  in  an  action  to  foreclose  a 
mortgage  upon  real  property,  vests  in  the  purchaser  the  same 
estate  only,  that  would  have  vested  in  the  mortgagee,  if  the 
equity  of  redemption  had  been  foreclosed.  Such  a  conveyance 
is  as  valid  as  if  it  was  executed  by  the  mortgagor  and  mort- 
gagee, and  is  an  entire  bar  against  each  of  them,  and  against 
each  party  to  the  action  who  was  duly  summoned,  and  every 
person  claiming  from,  through  or  under  a  party,  by  title 
accruing  after  the  filing  of  the  notice  of  the  pendency  of  the 
action,  as  prescribed  in  the  last  section." ' 

The  title  and  possession  remain  in  the  mortgagor  until 
such  conveyance  upon  sale ;  the  interest  of  the  mortgagee 
remains  until  then  that  of  a  mere  lienor.  The  commence- 
ment of  a  foreclosure  gives  him  no  title,  as  his  mortgage  is 
only  a  security  for  a  debt ;  the  title  and  seizure  remain  in  the 
mortgagor  until  the  referee's  deed  upon  sale  is  actually 
delivered  to  the  purchaser.' 

§  12.  Effects  of  foreclosure  and  sale  on  title. — The 
effect  of  a  foreclosure  by  an  equitable  action  and  the  sale  of 
the  premises  is  to  bar  the  equity  of  redemption.*  The  deed 
passes  to  and  vests  in  the  purchaser  the  estate  which  would 
have  passed  to  and  vested  in  the  mortgagee  if  there  had 
been  a  strict  foreclosure,  no  more  and  no  less  ;*  and  a  sale 
made  pursuant  to  a  decree  or  judgment  of  a  competent  court 
having  jurisdiction  of  the  subject-matter  and  of  the  parties, 
passes  title  to  the  purchaser  even  though  the  judgment 
should  afterwards,  on  appeal,  be  set  aside  for  error  or 
irregularity.*     The  deed  of  the  officer  of  the  court  conveying 


»  N.  Y.  Code  Civ.  Proc.  §  1633.  »  See  Palmer  v.  Mead,  7  Conn.  149 

»  Gardner  v.  Ileartt,  3  Den.   (N.  (1828);  Broome  v.  Beers,  6  Conn.  198 

T.)  232  (1846) ;  Hubbell  v.  Moulson,  (1826) ;  Anonymous,  2  Cas.  in  Ch.  24 

53  N.  Y.  225  (1873) ;  s.  C.  18  Am.  (1679). 

Rep.  519  ;  Bryan  v.  Butts,  27  Barb.  *  Lawrence  v.   Delano,   3    Sandf. 

(N.  Y.)  503  (1857) ;  National  Fire  (N.  Y.)  333  (1849). 

Ins.  Co.  V.  McKay,  5  Abb.  (N.  Y.)  "  See  Blakeley  v.  Calder,  16  N.  Y. 

Pr.  N.  S.  445  (18G7).  617  (1857) ;  Holden  v.   Sackett,   IS 


§  13. J  WHO  BAREED  BY  FOEEOLOSUBE.  11 

the  property  will  be  as  valid  as  if  it  had  been  executed  by 
the  mortgagor  and  mortgagee,  and  will  be  an  entire  bar 
against  each  of  them,  and  against  all  parties  to  the  suit  in 
which  the  decree  for  such  sale  was  made,  and  against  their 
heirs  and  representatives,  and  all  parties  claiming  under  them 
or  their  heirs,*  as  well  as  against  an  assignee  in  bankruptcy," 
who  has  notice  of  a  suit  pending  against  the  bankrupt  to 
foreclose  the  mortgage,  although  he  was  not  made  a  party 
to  the  action  ;*  and  such  a  deed  will  be  a  complete  bar  to 
the  equity  of  redemption  where  the  mortgagee  becomes  the 
purchaser  the  same  as  where  the  property  is  purchased  by  a 
stranger.* 

§  13.  Who  barred  by  foreclosure.— The  forclosure  and 
sale  will  be  a  bar  under  the  statute  against  those  persons 
who  were  properly  made  parties  to  the  action,  that  is,  the 
mortgagor  and  the  mortgagee,  and  all  subsequent  incumbran- 
cers, and  against  such  rights  as  were  properly  the  subject  of 
litigation  in  the  action.  It  will  not  bar  the  rights  of  persons 
who  were  not  properly  made  parties  to  the  litigation,  and 
whose  rights  are  paramount  to  those  of  the  mortgagor 
and  mortgagee.*  Thus  a  claim  of  dower  in  the  premises  was 
not  barred  by  a  foreclosure  and  sale  under  a  mortgage  executed 
by  the  husband  alone  during  coveture,  although  the  widow 
was  made  a  party  to  the  foreclosure  suit,  and  the  bill,  which 
was  taken  as  confessed  against  her,  alleged  that  she  claimed 


Abb.  (N.  T.)  Pr.  473  (1861);  Lewis  v.  (1854) ;  Wood  v.  Jackson,  8  Wend. 

Smith,  11  Barb.  (N.  Y.)  152  (1851) ;  (N.  Y.)  9  (1831) ;  s.  c.  23  Am.  Dec. 

LeGuen  v.   Gouverneur,  1  Johns.  603 ;  Buckmaster  v.   Carlin,  4  OL 

Cas.  (N.   Y.)  436  (1800) ;  Breese  v.  (3  Scam.)  104  (1841);  Bank  of  United 

Bangs,  2  E.  D.  Smith  (isT.  Y.)  474  States  v.  Voorhees,  1  McL.  C.  0., 

(1854);  Wood  v.  Jackson,  8  Wend.  221  (1834);  3  N.  Y.  Rev.  Stat.  193, 

(N.  Y.)  9  (1831)  ;  a  c.  22  Am.  Dec.  §  158. 

603  ;  Buckmaster  v.  Carlin,  4   HI.  »  Under  Acts  of  Congress,  1841 ;  9 

(8  Scam.)  104  (1841);  Bank  of  United  Stat,  at  Large,  446. 

States  V.  Voorhees,  1  McL.  C.  C,  *  Cleveland  v.  Boerum,  24  N.  T. 

221  (1834).  613  (1862). 

'  Blakeley  v.  Calder,  15  N.  Y.  617  *  Lansing  v.  Goelet,  9  Cow.  (N. 

(1857) ;  Holden  v.  Sackett,  12  Abb.  Y.)  346  (1827). 

(N.  Y.)  Pr.  473  (1861) ;  Breese  v.  »  Lewis  v.   Smith,  9   N.   Y.  609 

Bangs,  2  E.  D.  Smith  (N.  Y.)  474  (1854) ;  s.  c.  41  Am.  Dec.  706. 


12  FOEECLOSUEE  AS  PAYIMEIST  OF  DEBT.   [§§  14-15. 

some  interest  in  the  premises  "  as  subsequent  purchaser,  or 
incumbrancer,  or  otherwise."  * 

§  14.  Subsequent  incumbrancers. — The  decree  of  fore- 
closure and  the  sale  thereunder,  are  a  bar  only  against 
persons  who  were  made  parties  to  the  action,  their  heirs  and 
assigns,  and  those  claiming  under  them ;"  consequently 
where  the  mortgage  is  foreclosed  without  joining  the  holder 
of  a  subsequent  incumbrance  upon  or  interest  in  the  premises, 
whose  title  appears  of  record,  the  decree  will  not  be  binding 
upon  such  incumbrancer.* 

§  15.  Foreclosure  as  payment  of  debt. — The  principle 
is  well  settled  that  the  foreclosure  of  a  mortgage,  by  what- 
ever method,  operates  as  a  payment  of  the  mortgage  debt, 
to  the  extent  of  the  value  of  the  property  ;*  and  this  is  true 
even  though  the  foreclosure  is  brought  by  an  assignee,  hold- 
ing only  a  part  of  the  mortgage  debt  ;*  therefore,  where  a 
mortgagee  forecloses  his  mortgage  his  debt  becomes  by  that 
act  extinguished  to  the  extent  of  the  value  of  the  land  at  the 
time  of  the  foreclosure,  and  whatever  he  may  hold  as  collat- 
eral security  for  the  debt  in  addition  to  the  mortgage  on  the 
land,  will  thereby  become  discharged  to  the  same  extent.* 
Where  the  property  is  not  sufficient  to  discharge  the  mort- 
gage debt,  the  mortgagee  may  maintain  an  action  at  law 


>  Lewis   V.   Smith,   9  N.  T.  502  309  (1856) ;  Hurd   v.   Coleman,   43 

(1854) ;  8.  c.  41  Am.  Dec.  706.     See  Me.  182  (1856) ;  Southard  v.  Wilson, 

Banks  v.   Walker,  3  Barb.  Ch.  (N.  29  Me.  56  (1848) ;  Briggs  v.  Rich- 

T.)  438  (1848);  Hallett  v.  Hallett,  2  mond,  27  Mass.  (10  Pick.) 391  (1830); 

Paige  Ch.  (N.  Y.)  15(1829);   Devon-  8.    c.   20   Am.    Dec.   526 ;  Hunt  v. 

sher  V.   Newenham,   2  Schoales  &  Stiles,  10  N.  H.  466  (1839) ;  Paris  v. 

Lef .  199  (1804).  Hulett,  26  Vt.  308  (1854) ;  Lovell  v. 

«  2  N.  Y.  Rev.  Stat.  192,  §  138  ;  Leland,   3  Vt.  581  (1831).     Contra 

N.  Y.  Code  Civ.  Proc.  §  1632  Strong  v.  Strong,  2  Aik.  (Vt.)  373 

»  Walsh  V.  Rutgers  Fire  Ins.  Co.,  (1827). 
13  Abb.  (N.  Y.)  Pr.  33  (1861).     See         »  Johnson  v.  Candage,  31  Me.  28 

Vandcrkemp  v.    Shelton,  11  Paige  (1849).  See  Brown  v.  Tyler,  74  Mass. 

Ch.  (N.  Y.)  28  (1844) ;  Slee  v.  Man-  (8  Gray)  135  (1857) ;  s.  c.  69  Am. 

hattan  Co.,  1  Paige  Ch.  (N.  Y.)  48  Dec.  239. 
(1828).  "  Smith  v.  Packard,  19  N.  H.  675 

*  See  Vansant  v.   Allmon,  23  111.  (1849). 
80  (1859),  Wilson  v.  Wilson,  4  Iowa 


§15.] 


FOEECLOSURE  AS  PAYMEISTT  OF  DEBT. 


13 


for  the  debt  after  deducting  the  value  of  the  premises 
or  the  amount  for  which  they  were  sold ;'  because  in  such  a 
case  the  foreclosure  only  extinguishes  the  debt  to  the  extent 
of  the  money  produced  by  the  sale.*  The  reason  is  said  to 
be  the  fact  that  the  mortgage  is  but  a  mere  security  for  the 
debt  and  collateral  to  it ;  that  the  debt  has  an  independent 
existence  and  remains  with  all  its  original  validity,  notwith- 
standing a  release  of  the  mortgage ;  that  the  former  is  the 
principal  and  the  latter  an  incident,  though  not  an  indispens- 
able incident.*  But  where  the  value  of  the  property  mort- 
gaged exceeds  the  amount  of  the  debt,  foreclosure  will 
operate  as  full  payment  even  at  law.* 


'  Globe  Ins.  Co.  v.  Lansing,  5  Cow. 
(N.  T.)  880  (1826) ;  s.  o.  15  Am, 
Dec.  474 ;  Porter  v.  Pillsbury,  36 
Me.  278  (1853) ;  Andrews  v.  Scotton, 
2  Bland.  Cli.(Md.)  629  (1830);  Amoiy 
V.  Fairbanks,  3  Mass.  562  (1793) ; 
Hatch  V.  White,  2  Gall.  C.  C.  154 
(1814) ;  Omaly  v.  Swan,  3  Mason  C. 
C.  474  (1824) ;  Briggs  v.  Richmond, 
27  Mass.  (10  Pick.)  391,  396  (1830) ; 
West  V.  Chamberlin,  25  Mass.  (8 
Pick.)  836(1829) ;  Lansing  v.  Goelet, 
«  Cow.  (N.  Y.)  346  (1827) ;  Case  v. 
Boughton,  11  Wend.  (N.  Y.)  106, 
109  (1833);  Morgan  v.  Plumb.  9 
Wend.  (N.  Y.)  287,  292  (1832); 
Spencer  v.  Hartford,  4  Wend.  (N. 
Y.)  884,  886   (1830);   Hughes  v. 


Edwards,  22  U.  S.  (9  Wheat.)  489 
(1824) ;  bk.  6  L.  ed.  142 ;  Aylet  T. 
HiU,  2  Dick.  551  (1779) ;  Took  r. 

,  2  Dick.  785  (1784) ;  8.  o.  ««4 

nom.  Tooke  v.  Hartley,  2  Bro.  0. 0. 
125  (1786) ;  Perry  v.  Barker,  13  Ves. 
198,  204  (1806) ;  Dashwood  v.  Blyth- 
way,  1  Eq.  Cas.  Ab.  317  (1729); 
4  Kent  Com.  183. 

•  Globe  Ins.  Co.  r.  Lansing,  6 
Cow.  (N.  Y.)  380  (1826) ;  s.  o.  15 
Am.  Dec.  474;  Dunkley  v.  Van 
Buren,  8  Johns.  Ch.  831  (1818). 

»  Hatch  V.  White,  2  Gall.  0.  0. 
152, 154  (1814). 

*  Bassett  y.  Mason,  18  Ccmn.  181 
(1846). 


t 


CHAPTER  IL 


COURTS.  JURISDICTION  AND  VENUE. 


16.  In  General — Courts  of  equity. 

17.  Foreclosure — Trial  by  jury. 

18.  Decree  in  chancery — Fraudu- 

lent. 

19.  Jurisdiction  of  State  Courts- 

Supreme  Court. 

20.  County  Courts. 

21.  City  Courts. 

22.  Terms   of   New   York   City 

Courts. 

23.  In  Missouri. 

24.  Jurisdiction  of  Federal  Courts. 


§  25.  Venue — Provisions  of  the  New 
York  Code  where  the  land 
lies  within  the  state. 

26.  Debt  payable  in  one  coimty; 

land  in  another. 
87.  Action  brought  in  improper 

county. 

28.  Motion  for  change  of  venue. 

29.  Where  property   situated  in 

two  states. 

80.  Where  the  land  lies  out  of  the 

state. 

81.  Where  the  parties  reside  ta 

another  state. 

82.  Transitory  action. 


§  i6.  In  General. — Courts  of  Equity. — Courts  of  equity 
have  inherent  original  jurisdiction  of  actions  to  foreclose 
mortgages,  and  authority  to  render  such  judgment  or 
decree  as  substantial  justice  between  the  parties  may  require. 
And  although  this  power  is  conferred  by  statute  upon  courts 
of  law  in  several  states,*  yet  courts  of  equity,  where  they 
have  not  been  suspended  by  codes  of  practice,  doing  away 
with  all  distinctions  between  actions  at  law  and  actions  in 
equity,  still  have  concurrent  jurisdiction  of  the  foreclosure  of 
mortgages  and  are  frequently  resorted  to  in  particular  cases 
because,  it  is  said,  they  afford  a  more  complete  and  certain 
remedy.* 


'  Statutes  regulating  mortgage 
foreclosures  have  been  enacted  in 
California,  Florida,  Indiana,  Iowa, 
Kansas,  Kentucky,  Minnesota,  Mis- 
souri, Nebraska,  Nevada,  North 
Carolina,  Ohio,  Oregon,  South  Caro- 
hna  and  Wisconsin.  And  see  State 
Bank  of  Illinois  v.  Wilson,  9  111.  57 
(1847);   Warehime  v.  Carroll   Co. 


Building  Assoc,  44  Md.  612  (1876) ; 
Chouteau  v.  Allen,  70  Mo.  290 
(1879);  Byron  v.  May,  2  Chand. 
(Wis.)  103  (1850). 

«  Shaw  v.  Norfolk  Co.  R.  R.  Co.,  71 
Mass.  (5  Gray)  162  (1855) ;  McEh-ath 
V.  Pittsburgh  &  S.  R.  R.0o.,  66  Pa. 
St  189  (1867). 


U 


§  17. J  TRIAL   BT   JUBT.  15 

Where  a  mortgage  contains  a  power  of  sale,  such  power 
will  not  deprive  courts  of  equity  of  their  jurisdiction  to 
foreclose.'  It  is  said  that  the  reason  for  retaining  jurisdic- 
tion in  a  court  of  equity  is,  that  the  mortgagee  is  incapable 
of  purchasing  at  his  own  sale  under  a  power  in  the  mortgage," 
but  that  at  a  sale  made  by  an  officer  under  a  decree  of 
foreclosure  the  mortgagee  may  become  a  purchaser." 

§  17.  Foreclosure — Trial  by  jury. — In  an  action  to  fore- 
close a  mortgage  brought  under  a  statute  providing  for  such 
proceedings,  the  court  may,  in  its  discretion,  direct  a  refer- 
ence, or  ask  the  aid  of  a  jury  to  inform  its  conscience,  or  it 
may  decide  the  case  without  such  aid;  but  the  defendant 
can  not  ask  as  a  matter  of  right  to  have  the  issues  framed 
and  tried  at  law.*  And  a  jury  trial  can  not  be  demanded  as 
a  matter  of  right  in  an  action  to  recover  upon  a  promissory 
note,  and  to  foreclose  a  mortgage  executed  to  secure  the 
same,  where  the  pleadings  admit  the  right  to  recover  the 
amount  due  upon  the  note,  and  nothing  is  left  in  controversy 
but  the  right  to  foreclose  the  mortgage,  and  to  subject  the 
property  mortgaged  to  the  payment  of  the  amount  admitted 
to  be  due.* 

The  fact  that  in  an  action  to  foreclose  a  mortgage,  the  sale 
of  the  mortgaged  premises  may  result  in  a  deficiency,  for 
which  a  money  judgment  may  be  docketed  against  the 
defendant  liable  for  such  deficiency,  does  not  entitle  him,  as 
a  matter  of  right,  to  a  jury  trial ;  the  action  is  in  equity  and 
is  triable  by  the  court.' 

Should  the  court  in  such  a  case  direct  any  matter  of  fact  to 
be  tried  by  a  jury  as  authorized  by  the  New  York  Code 


*  Alabama  Life  Ins.  &  T.  Co.  v.  •  Benjamin  v.  Cavaroc,  3  Wood, 

Pettway.  24  Ala.  544  (1854) ;   Carra-  C.  C.  168  (1875). 

dine  V.  O'Connor,  21  Ala.  573  (1852) ;  *  Knickerbocker  Life  Ins.  Co.  ▼. 

"Warehime  v.  Carroll  Co.  Building  Nelson,    8  Hun  (N.  Y.)  31  (1876) ; 

Assoc,  44  Md.  512(1876);  Morrisson  Carmichael  v.  Adams,  91  Ind.  526 

T.  Bean,  15  Tex.  267  (1855) ;  Walton  (1883) ;  N.  Y.  Code  Civ.  Proc.  §§  968, 

▼.  Cody,  1  Wis.  420  (1853) ;  Byron  969. 

V.  May,  2  Chand.  (Wis.)  103  (1850).  »  Morgan  v.  Field,  35  Kan.  163 

» Marriott  v.   Givens,  8  Ala.   694  (1886). 

(1845) ;  McGowan  v.  Branch  Bank  •  Carroll  v.  Delmel,  95  N.  Y.  363 

of  MobUe,  7  Ala.  823  (1845).  (1884). 


16  JUEISDICTIOIS"    OF   SUPEEIME    COUET.    [§§  18-19. 

of  Civil  Procedure/  and  after  such  trial  disregard  the  verdict 
and  make  its  own  findings,  the  case  may  be  reviewed  on 
appeal,  on  the  findings  and  decisions  of  the  court,  the  same 
as  if  there  had  been  no  submission  of  any  fact  to  the  jury.* 

But  it  seems  that  where  a  mortgagee  brings  an  action  under 
theNew  York  Code  of  Civil  Procedure  upon  a  covenant  in  a 
deed  against  the  grantees  of  the  mortgagor  to  recover  the  defi- 
ciency arising  on  the  foreclosure  of  the  mortgage,  which  they 
had  in  their  deed  covenanted  to  repay  as  a  part  of  the 
purchase  price,  and  demands  a  money  judgment  against 
them,  the  action  is  triable  by  a  jury.* 

§  i8.  Decree  in  Chancery.  —  Fraudulent.  — Where  a 
mortgage  is  foreclosed  in  a  court  of  equity  the  decree  should 
determine  the  rights  and  liabilities  of  all  the  parties  to  the 
action.*  And  where  a  decree  in  chancery  foreclosing  a 
mortgage  is  obtained  by  fraud,  it  is  void  and  will  be  so 
declared  on  a  bill  filed  by  the  party  whose  rights  are  injur- 
iously affected  by  it ;  a  title  founded  upon  such  sale  is  also 
void.* 

§  19.    Jurisdiction  of  State  Courts. — Supreme  Court. — 

The  New  York  Constitution  as  amended  in  1869,*  vests  the 
supreme  court  with  general  jurisdiction  both  in  law  and  in 
equity  ;  and  this  court  thereby  succeeded  to  the  old  chancery 
powers  and  therefore  has  jurisdiction  in  all  actions  for  the 
foreclosure  of  mortgages.  The  Code  of  Civil  Procedure' 
provides  that  the  general  jurisdiction  in  law  and  in  equity 
which  the  supreme  court  possessed  under  the  provisions  of 


>  §§  823,  971,  1003,  *  Thus  where  a  bill  was  filed  to 

'  Carroll  v.  Deimel,  95  N.  Y.  252  foreclose  a  mortgage  executed  by  A. 

(1884).     Where,  therefore,   in  such  and  wife  and  B.   and  wife,  all  of 

a  case,  upon  the  trial  before  the  jury  whom  were  made  parties'  defendant, 

on  which  trial  the  pame  judge  who  a  decree  directing  the  sale  of  the 

made  the  findings  presided,  improper  interest  of  A.  alone  was  held  erron- 

evidence  was  received  under  objec-  eous.     Hurtt  v.  Crane,  36  Md.  29 

tion  and  exception,  the  appellant  will  (1873).     See  Contee  v.   Dawson,  3 

be  entitled  to  the  benefit  of  the  excep-  Bland.  Ch  (Md.)  264,  292  (1832). 

tion.    Id.  »  Eslava  v.  Eslava,  50  Ala.  81,  83 

«  Hand  v.  Kennedy,  83  N.  T.  149  (1873). 

(1880) ;  aff'g  s.  c.  45  N.  Y.  Super.  «  Article  6,  §  6. 

Ct.  (13  J.  &  S.)  385  (1879).  '  §  217. 


§  20.]  SUPEEME   AND   COUNTY   COUUTS.  17 

the  constitution,  including  all  the  jurisdiction  which  was 
possessed  and  exercised  by  the  supreme  court  of  the  colony 
of  New  York  at  any  time,  and  by  the  court  of  chancery  in 
England  on  the  4th  day  of  July,  1776,  with  the  exceptions, 
additions,  and  limitations,  created  and  imposed  by  the 
constitution  and  laws  of  the  state  shall  be  possessed  and 
exercised  by  that  court  under  the  Code. 

It  was  recently  held  by  the  supreme  court  of  New  York, 
as  regards  mortgaged  property  situated  within  the  state  and 
subject  to  the  jurisdiction  of  its  courts,  that  the  parties  to 
the  mortgage  can  not,  by  their  agreement,  deprive  the  courts 
of  the  jurisdiction,  which  they  would  otherwise  have,  to 
enforce  the  rights  acquired  under  the  mortgage ;  but  that 
they  can  by  such  agreement  provide  the  method  for  the 
enforcement  of  their  rights  in  those  cases  where  the  property 
mortgaged  is  situated  out  of  the  state  and  beyond  the 
jurisdiction  of  its  courts,  unless  such  agreement  is  contrary 
to  some  statutory  regulation  upon  the  subject.* 

§  20.  County  Courts. — By  the  provisions  of  the  New  York 
Code  of  Civil  Procedure,"  the  county  courts  are  given  juris- 
diction of  actions  for  the  foreclosure  of  mortgages,  and  for 
the  collection  of  any  deficiency  on  the  mortgage  which  may 
remain  unpaid  after  the  sale  of  the  premises  has  been  made, 
where  such  mortgaged  premises  are  situated  in  the  county. 
County  courts  are  not  courts  of  general  jurisdiction,  but  of 
limited  statutory  jurisdiction,  and  it  must  appear  upon  the 
face  of  the  pleadings  that  the  action  is  within  their  jurisdic- 
tion.* 

But  it  has  been  held  that  where  by  mistake  the  land 
intended  to  be  covered  by  the  mortgage,  is  described  so 
vaguely  and  uncertainly  as  to  render  it  impossible  to  identify 
and  locate  it,  a  county  court  will  not  have  jurisdiction  of  an 


>  Farmers'  Loan  &  Trust  Co.  v.  ruling  Hall   v.  Nelson,   23  Barb. 

Bankers'  &  M.  Telegraph  Co.,  44  (N.  Y.)  88  (1856). 

HunCN".  Y.)  400  (1887).  «  Kundolf  v.  Thalheimer,   13  N. 

«  §  340.     See  also  Code  Proc.  §  30  ;  Y.  593  (1855) ;  aff'g  s.  0.  17  Barb. 

Code  of    Rum.    Just.   ^  340.      See  (N.  Y.)  506  ;  Frees  v.  Ford.  6  N. 

Arnold  v.  Reese,  18  N.  Y.  57  (1858) ;  Y.  176  (1852).    See  VanDeusen  v. 

B.  c.  17  How.  (N.  Y.)  Pr.  35 ;  over-  Sweet,  51  N.  Y.  378  (1873). 

(2) 


18  JTJRISDICTIOT^^   OF    CITY   COURTS.        [§§  21-23. 

action  to  reform  the  mortgage  by  correcting  the  error  in  the 
description  and  to  foreclose  the  mortgage  as  thus  reformed, 
because  such  court  has  no  jurisdiction  of  an  action  to  reform 
a  mortgage.* 

§  21.  City  Courts. — The  Code  also  provides  for  the 
foreclosure  of  mortgages  on  real  property  situated  within 
their  respective  jurisdictions  by  the  Court  of  Common  Pleas  of 
the  City  and  County  of  New  York,"  the  Superior  Court  of  the 
City  of  New  York,"  the  Superior  Court  of  Buffalo,*  the  City 
Court  of  Brooklyn,'  the  Mayor's  Court  of  the  City  of  Hudson 
and  the  Recorder's  Courts  of  Utica  and  Oswego.* 

§  22.  Terms  of  New  York  City  Courts. — It  is  provided 
by  the  rules  of  the  Superior  Court  of  New  York  City  that 
there  shall  be  a  special  term  of  that  court  for  the  trial  of 
issues  of  law  and  of  issues  of  fact  without  a  jury,  in  actions 
for  the  foreclosure  of  mortgages,  and  for  the  hearing  of 
motions  and  the  granting  of  ex  parte  orders,  held  during  each 
month  of  the  year,  commencing  on  the  first  Monday  of 
each  month  and  terminating  on  the  Saturday  immediately 
preceding  the  first  Monday  of  the  succeeding  month. 
During  the  months  of  July,  August  and  September,  no  trial 
shall  be  had  unless  ordered  by  the  presiding  judge.'  And  a 
similar  rule  of  the  Court  of  Common  Pleas  of  the  City  of  New 
York  provides  that  there  shall  be  a  special  term  of  that  court 
for  the  trial  of  actions  for  the  foreclosure  of  mortgages  and  for 
the  hearing  of  motions  and  the  granting  of  ex  parte  orders, 
held  during  each  month,  commencing  on  the  first  Monday  of 


>  Avery  v.  Willis,  24  Hun  (N.  T.)  »  Code  Civ.  Proc.  §  263  ;  Code  of 

548  (1881)  ;  Thomas  v.  Harmon,  46  Rem.  Just.  §  263. 

Hun  (N.  Y.)  75  (1887).    See  Crosby  «  Code  Civ.  Proc.  §  263  ;  Code  of 

v.  Dowd,  61  Cal.  603  (1882).  Rem.  Just.  §  263. 

County  courts  have  original  ju-  *  Laws  of  1873,  Ch.  239  ;  Code  of 

risdiction  only  in  certain  specified  Rem.  Just.  §  263. 

cases.    Constitution,  article  6,  §  15  ;  »  Laws  of  1873,  Ch.  239 ;  Code  of 

Code  Civ.  Proc.  ^  340.     An  action  Rem.  Just.  §  263. 

or  proceeding  to  obtain  the  reforma-  •  Code  Civ.  Proc.  §  263 ;  Code  of 

tion  of  a  defective  deed,  mortgage.  Rem.  Just.  §  263. 

or  other  instrument,  is  not  among  '  Rule  12,  New   York   Sux>erior 

these  specified  cases,  and  the  Code  Court, 
of  Civ.  Proc.  §  348  d-es  not  cover  it 


§§  23-24.]    JXJEISDICTIOTT  OF  FEDERAL  COUBTS.  19 

each  month  and  terminating  on  the  Saturday  immediately 
preceding  the  first  Monday  of  the  succeeding  month.* 

§  23.  In  Missouri. — In  Missouri  the  circuit  court  has 
general  jurisdiction  over  the  foreclosure  of  mortgages,  and 
objection  to  the  jurisdiction  of  the  court  in  any  given  action, 
based  upon  the  fact  that  the  mortgaged  premises  are  not 
situated  in  the  county  where  the  suit  is  brought,  must  be 
taken  by  the  proper  plea,  and  will  be  waived  by  pleading  to 
the  merits.' 

§24.  Jurisdiction  of  Federal  Courts — The  circuit 
courts  of  the  United  States  have  concurrent  jurisdiction 
with  the  state  courts  over  all  suits  of  a  civil  nature  in  law  or 
in  equity  where  the  United  States  is  a  party  and  the  matter 
in  dispute,  exclusive  of  costs,  exceeds  the  sum  of  $500,  or 
where  the  parties  to  the  suit  are  citizens  of  different  states ; 
and  over  all  actions  where  an  officer  of  the  United  States 
brings  suit  under  an  act  of  Congress.  They  have  jurisdiction 
of  all  suits  in  equity  to  enforce  a  mortgage  or  other  equitable 
lien  or  claim  against  real  or  personal  property  within  the 
district  where  the  suit  is  brought  when  any  defendant  is 
not  a  resident  of  or  found  within  such  district.*  And  circuit 
courts  of  the  United  States  have  jurisdiction  to  foreclose 
mortgages  where  the  mortgaged  premises  lie  within  the 
jurisdiction  of  the  court  and  one  of  the  parties  to  the  action 
does  not  reside  in  the  state.*  This  equity  jurisdiction  of  the 
circuit  courts  of  the  United  States  to  foreclose  mortgages  on 
lands  lying  within  the  district  where  the  suit  is  brought  will 
not  be  affected  by  the  fact  that  the  state  legislature  has 
conferred  upon  the  courts  of  law  of  the  state  authority 
to  enforce  equitable  rights  by  statutory  proceedings,  because 
the  federal  courts  can  not  be  interfered  with  in  any  degree 
by  state  legislation.'     The  constitution  of  the  United  States 


» Rule  31.  N.  T.  Common  Pleas.  mb   nam.   Kelly  v.  McGlynn,  bk. 

•  Chouteau  v.  AUen,  70  Mo.  290  22  L.  ed.  599  ;  Thompson  v.  Central 
(1879).  Ohio  R.  R.  Co.,  73  U.  S.  (6  Wall.) 

» 17  U.  8.  Stat.  193.  134,  137  (1867)  ;  bk.  1  L.  ed.  765  ; 

•  Benjamin  v.  Caveroc,  2  Woods  Bennett  v.   Butterworth,  52  U.   S. 
0.  C.  168  (1875).  (11  How.)  669,  674,  675  (1850) ;  bk. 

•  Case  of  Broderick's  Will,  88  U.  13  L.  ed.  859;  Benjamin  v.  Cavaroc, 
&  (21  Wall.)  503,  530  (1874) ;  a  a  2  Woods  C.  C.  168  (1875). 


20  JURISDICTION    OF    FEDERAL    COURTS.  [§  24. 

and  the  acts  of  Congress  recognize  and  establish  the  dis- 
tinction between  law  and  equity ;  and  the  remedies  in  the 
United  States  courts  are  at  law  or  in  equity  in  accordance 
with  the  practice  of  the  state  courts  and  according  to  the  prin- 
ciples of  common  law  and  equity  as  distinguished  and  defined 
in  the  country  from  which  we  derive  our  knowledge  of  these 
principles.*  And  although  the  state  forms  of  practice  may- 
have  been  adopted  in  the  circuit  courts  of  the  United  States 
for  the  jurisdiction  in  which  the  states  lie,  yet  this  adoption 
of  the  state  practice  does  not  confound  the  principles  of  law 
and  equity  as  established  in  such  courts."  The  equity 
jurisdiction  of  the  federal  courts  is  the  same  in  all  states  and 
the  rule  of  decision  is  the  same  in  all ;  their  remedies  are  not 
regulated  by  the  state  practice,  for  they  are  independent  of 
the  local  law  of  any  state.' 

After  the  commencement  of  an  action  in  a  United  States 
court  to  foreclose  a  mortgage,  and  the  acquiring  of 
jurisdiction  by  that  court  of  the  subject  and  parties,  an 
action  can  not  subsequently  be  commenced  in  a  state  court 
to  foreclose  the  same  mortgage.*  The  attachment  of  a  bond 
and  mortgage,  assigned  during  the  pendency  of  an  action 
in   the  United    States   court   from   which   the   warrant  of 


»  Thompson  v.  Central  Ohio  R.  R.  mortgage,  has  gone  into  the  United 

Co.,73U.S.  (6  Wall.)  134, 137(1867);  States  district  court  as  a  court  of 

bk.  18    L.    ed.    765 ;    Robinson   v.  bankruptcy,   proved  his  claim  and 

Campbell,  16  U.  S.  (3  Wheat.)  213  subjected  it  to  the  jurisdiction  of 

(1818) ;  bk.  4  L.  ed.  372.  that  court  ;    and   the   bankruptcy 

*  Bennett  v.  Butterworth,  52  U.  S.  court  has,  by  an  order  to  which  the 
(11  How.)  669,  674  (1850) ;  bk.  13  L.  creditor  was  a  party,  made  on  appli- 
ed. 859.  cation  of  another  creditor  having  a 

2  Barber  v.  Barber,  62  U.  S,  (21  prior  lien  on  the  mortgaged  prem- 

How.)  582  (1858) ;  bk.  16  L.  ed.  226;  ises,  directed  a  sale  of  the  premises. 

Dodge  V.   Woolsey,  59  U.   S.   (18  the   proceeds   thereof,   beyond  the 

How.)  331,  347  (1855) ;  bk.  15  L.  ed.  sum  admitted  to  be  secured  by  the 

401  ;  United  States  v.  Rowland,  17  prior  lien,  "  to  abide  a  further  hear- 

U.  S.  (4  Wheat.)  108  (1819) ;  bk.  4  ing"  between  the  two  claimants  ;  the 

L.  ed.   526  ;  Cropper  v.  Coburn,  3  mortgagee  can  not,  after  the  sale. 

Curt.  C.  C.  465  (1855) ;  Gordon  v.  foreclose  his  mortgage  in  a  district 

Hobart,  2  Sumn.  C.  C.  401  (1825).  court  of  the  state,  while  the  pro- 

*  Levy  V.  Haake,53  Cal.  267  (1878).  ceedings  in  respect  to  the  disposition 
Thus  where  a  creditor  of  a  bank-  of  the  proceeds  of  the  sale  are  still 

rupt,  whose  claim  is  secured  by  a  pending  in  the  bankruptcy  court. 


§  25.]  VENTJE   OF   ACTION.  21 

attachment  was  issued,  will  not  prevent  the  foreclosure 
of  the  mortgage  by  the  assignee  thereof  in  a  state 
court.*  Thus  after  the  commencement  of  an  action  by 
the  United  States  in  a  United  States  circuit  court,  the 
defendant  therein  executed  an  assignment  of  a  bond 
and  mortgage  which  was  recorded ;  an  attachment  was  there- 
after levied  on  the  mortgage  debt,  plaintiff  claiming  that  the 
assignment  was  fraudulent  and  void.  An  action  was  then 
brought  by  the  assignee  to  foreclose  the  mortgage.  Upon 
application  of  the  owners  of  the  equity  of  redemption  the 
United  States  circuit  court  directed  the  levy  to  be 
discharged,  unless  the  United  States  consented  to  appear 
and  submit  to  the  jurisdiction  of  the  state  court.  Upon 
motion  thereupon  made  in  the  foreclosure  suit  an  order  was 
granted  substituting  the  United  States  as  defendant,  dis- 
charging the  original  defendant  from  liability,  and  directing 
the  plaintiff  to  satisfy  the  mortgage,  upon  payment  into 
court  of  the  amount  due  with  costs^  with  provision  for 
the  appearance  of  the  United  States,  its  submission  to  the 
jurisdiction  of  the  court,  and  consent  that  the  title  to  the  mort- 
gage debt  be  determined  in  the  action ;  on  default  of 
such  appearance  and  submission,  the  money  so  paid  in  was 
directed  to  be  paid  to  the  plaintiff.  The  court  held  that  the 
order  was  proper  because  the  United  States  had  no  judgment 
against  the  defendant,  and  might  never  have.' 

§  25.  Venue.  —  Provisions  of  the  New  York  Code 
where  the  land  lies  within  the  state. — Under  the 
provisions  of  the  New  York  Code  of  Civil  Procedure,  where 
the  land  lies  within  the  state,  an  action  to  foreclose  a 
mortgage  on  real  property  must  be  brought  and  tried 
in  the  county  in  which  the  land  is  situated,*  subject 
to  the  power  of  the  court  to  change  the  place  of  trialin 
the  cases  provided  for  in  the  Code.*   And  this  is  true  although 


'SeeJohnsonv.  Stimmel,  89N.Y.  »  N.  Y.   Code  Civ.   Proc.   §983. 

117  (1882) ;  Thurber  v.  Blanck,  50  See  also  Gould  v.  Bennett,  59  N.  Y. 

N.  Y.  80  (1872).  124  (1874) ;    8.  c.  -49  How.  (N.  Y.) 

^  Johnson  v.   Stimmel,  89  N.  Y.  Pr.  57, 

117  (1882).    See  Thurber  v.  Blanck,  *  N.  Y.  Code  Civ.  Vroc.  §  987. 
60  N.  Y.  80  (1872). 


22  VENTIE LOCATIOIT   OF   LAND.  [§  26. 

the  money  may  have  been  loaned  and  the  mortgage  executed 
in  a  county  other  than  that  in  which  the  mortgaged  premises 
are  situated.'  The  appointment  of  a  referee  residing  in  a 
difTerent  county  from  that  in  which  the  venue  is  laid,  will 
rot  necessarily  change  the  place  of  trial;  but  the  referee 
can  not,  without  the  consent  of  the  parties,  try  the  case 
elsewhere  than  in  the  county  where  the  mortgaged  premises 
are  situated.' 

§  26.  Debt  payable  in  one  county ;  land  in  another. — In 
Iowa  where  a  note  made  payable  in  one  county  is  secured 
by  a  mortgage  on  land  located  in  another  county,  the  court 
of  the  county  where  the  note  is  payable  has  no  jurisdiction  of 
an  action  to  foreclose  a  mortgage  where  the  notice  to  the 
m  aker  is  served  by  publication  only.  The  action  in  such  a  case 
is  strictly  in  rem  and  must  be  brought  in  the  county  where 
the  land  lies  ;  but  if  such  service  is  had  upon  the  maker  of  the 
rote  and  the  action  is  so  brought,  as  to  enable  the  court  of 
the  county  where  the  note  is  payable,  to  render  a  personal 
judgment  against  the  maker  thereof,  under  the  Code,*  then 
that  court  may  also  render  a  decree  foreclosing  the  mort- 
gage, although  the  land  lies  in  another  county.*  This  right, 
however,  depends  upon  the  particular  provisions  of  the  Code, 
and  until  its  passage  a  different  rule  prevailed.* 


'  Miller  v.  Hull,  3  How.  (N.  Y.)  foreclosure  of  a  mortgage  upon  real 

Pr.  325  (1848) ;  s.  c.  1   Code  Rep.  estate,  situated  in  that  county  was 

113;  Vallejo  V.  Randall,  5  Cal.  461  upon  the  calendar,  adjourned   the 

(1 855) ;  HackenhuU   v.   Westbrook,  term  to  his  chambers  in  the  county 

53  Ga.  285  (1876) ;  Owings  v.  Beall,  of  Kings,  and  proceeded  to  try  the 

8  Litt.  (Ky.)  103  (1823),     Compare  action  at  the  adjourned  term  against 

Broome  V.  Beers,  0  Conn.  198(1836) ;  the    objections  of    the    defendant, 

f'aufman  v.  Sayre,  3  B.  Mon.  (Ky.)  This  was  held  to  be  error. 

202  (1841).  3  lo^a  Code,  §  2581. 

*  Brush  V.  Mullany,  12  Abb.  (N.  ••  Iowa  L.)an  &  Trust  Co.  v.  Day, 

Y.)  Pr.  344  (1861) ;  Wheeler  v.  IMait-  63  Iowa,  459  (1884) ;  Equitable  Life 

land,  12  How.  (N.Y.")Pr.  35(1855);  Ins.   Co.   v.    Gleason,   56  Iowa,  47 

Gould  V.   Bennett,    59    N.    Y.    124  (1881). 

(1874) ;  s.  c.  49  How.  (N.  Y.)  Pr.  57.  ^  i^^a  Loan  &  Trust  Co.  v.  Day, 

In  this  case,  a  justice  holding  a  63  Iowa,  459  (1884);  Chadboume  T. 

special  term  in  the  county  of  West-  Oilman,  29  Iowa,  181  (1870). 
Chester,  at  which  an  action  for  the 


§§  27-28.]  OHAFGIN-G   VENTTE.  23 

§  27.  Action  brought  in  improper  county. — Placfng  the 
venue  and  having  the  trial  in  a  county  different  from  that  in 
which  the  property  is  situated,  is  not  an  irregularity/  because 
where  the  county  designated  in  the  complaint  as  the  place 
of  trial  is  not  the  proper  county,  the  action  may,  not- 
withstanding, be  tried  therein  unless  the  place  of  trial  is 
changed  to  the  proper  county,  upon  the  demand  of  the 
defendant,  followed  by  the  consent  of  the  plaintiff  or  by 
the  order  of  the  court.'  But  where  the  county  designated 
in  the  complaint  as  the  place  of  trial  is  not  the  proper  county, 
the  defendant  may  demand,  as  a  matter  of  right,  that  the 
trial  be  had  in  the  proper  county.* 

Where  the  defendant  demands  that  the  action  be  tried  in 
the  proper  county,  his  attorney  must  serve  upon  the  plain- 
tiff's attorney,  with  the  answer,  or  before  service  of  the 
answer,  a  written  demand  accordingly,  which  must 
specify  the  county  where  the  defendant  requires  the  action 
to  be  tried.  If  the  plaintiff's  attorney  does  not  serve  his 
written  consent  to  the  change,  as  requested  by  the  defendant, 
within  five  days  after  service  of  demand,  the  defendant's 
attorney  may,  within  ten  days  thereafter,  serve  notice  of  a 
motion  to  change  the  place  of  trial.* 

§  28.  Motion  for  change  of  venue. — Before  a  motion 
can  be  made  for  changing  the  place  of  trial,  on  the 
ground  that  neither  the  plaintiff  nor  the  defendant  resides  in 
the  county  where  the  venue  is  laid,  a  demand  must  be  made 
therefor  upon  the  attorney  who  has  appeared  in  the  action 
as  provided  for  by  the  Code.*  Where  the  plaintiff's  attorney 
fails  to  consent  to  the  change  demanded,  an  application  to 
the  court  by  motion  must  be  made  by  the  defendant  within 


»  Brush  V.  MuUany,  13  Abb.  (N.  Abb.  (N.  T.)  Pr.  IT.  S.  27  (1871) : 

T.)  Pr.  344  (1861) ;  Marsh  v.  Lowry,  Stark  v.  Bates,  13  How.  (N.  Y.)  Pr. 

36  Barb.  (N.  Y.)  197  (1857);  s.  c.  sub  465  (1854) ;  K  Y.  Code  Civ   Proa 

nom.  March  v.  Lowiy,  16  How.  (N.  g  986. 

Y.)  Pr.  41  (1857).  *  N.  Y.  Code  Civ.  Proc.  §  986. 

»  N.  Y.  Code  Civ.  Proc.  §  985.  »  VanDyck  v.  McQuade,  18  Hut 

»  Leland  v.  Hathorne,  42  N.  Y.  (N.  Y.)  376  (1879) ;  N.  Y.  Code  Oir 

547  (1870) ;  s.  0.  9  Abb.  (N.  Y.)  Pr.  Proc.  §  421. 

N.  S.    97;  Bush  v.   TreadweU,   11 


24  MOTION  TO    CHANGE   VENUE.  [§28. 

ten  days  after  the  expiration  of  the  five  days  given  to  the 
plaintiff  to  consent  to  the  change,  or  within  fifteen  days 
after  the  demand  has  been  made  by  the  defendant  ;  other- 
wise the  right  to  the  change  will  be  waived.*  But  it  seems 
that  under  the  Code,'  the  court  has  power  to  change  the  place 
of  trial,  on  the  ground  that  the  county  where  the  venue  is  laid 
is  not  the  proper  county,  to  the  proper  county  upon  applica- 
tion of  the  defendant,  although  he  may  have  lost  the  right 
bv  laches.* 

A  motion  for  a  change  of  the  place  of  trial  to  the  proper 
county  made  by  the  defendant  before  answer,  can  not  be 
opposed  by  the  plaintiff  on  the  ground  that  he  has  witnesses 
in  the  county  named  in  the  complaint  and  that  a  change  of 
the  place  of  trial  will  greatly  inconvenience  them,*  because 
the  place  of  trial  must  be  located  in  the  proper  county 
irrespective  of  the  convenience  of  witnesses,'  and  where  it 
is  not  so  laid  the  right  of  the  defendant  to  have  the  place  of 
trial  changed  to  the  proper  county  is  an  absolute  one.* 
Where  the  convenience  of  witnesses  requires  a  change  of  the 
place  of  trial,  the  proper  practice  is  first  to  order  a  change  to 
the  proper  county  upon  the  defendant's  motion,  and  then  if 
the  plaintiff  desires  a  change  to  any  other  county  on  the 


»  Duche  V.  Buffalo  Grape  Sugar  «  N.  T.  Code  Civ.  Proc.  §  987. 

Co.,  63  How.  (N.  Y.)  Pr.  516  (1882).  »  Clark  v.  Campbell,  54  How.  (IT. 

Under  the  Code,  (§  126  of  the  orig-  Y.)  Pr.  166  (1877). 

inal  Code),  there  was  no  limitation  *  Veeder  v.  Baker,  83  N.  Y.  156 

of  the  time  in  which  the  motion  to  (1880)  ;Giffordv,  Town  of  Gravesend, 

Change  the  place  of    trial    to    the  8  Abb.  (N.  Y.)  N.  C.   246  (1879); 

proper  county  could  be  made,  and  Wood  v.  Hollister,  3  Abb.  (N.  Y.) 

accordingly  it  was  held  under  that  Pr.    14  (1856)  ;   Starks  v.  Bates,  13 

statute  that  such  a  motion  could  be  How.    (N.    Y. )    Pr.    465  (1854); 

made  at  any  time  before  trial.  Hubbard  v.  National  Protection  Ins. 

Hubbard  v.  National  Protection  Co.,  11  How.  (N.  Y.)  Pr.  149  (1855); 

Ins.  Co.,  11  How.  (N.  Y.)  Pr.  149  Moore  v.  Gardner.  5  How.  (N.  Y.) 

(1855);  (Monroe  v.  National  Protec-  Pr.  243(1851).     See  Supreme  Court 

tion  Ids.  Co.,  10  How.  (N.  Y.)  Pr.  Rule  48. 

403  (1855).     But  a  change  was  made  '  Gifford  v.  Town  of  Gravesend, 

by  the  new  section  (986)  requiring  8  Abb.  (N.  Y.)  N.   C.   246  (1879) ; 

the  service  of  notice  of  motion  to  Moore  v.  Gardner,  5  How.  (N.  Y.) 

compel  the  change  to  be  made  with-  Pr.  243  (1851). 

in  ten  days  after  the  expiration  of  ^  Veeder  v.  Baker,  83  N.  Y.  156, 

the  five  days.  162  (1880). 


§§  29-30.]  PEOPERTT  OR  PAETTES  OUT  OF  STATE.  25 

grounds  stated  in  the  Code/  he  must  make  his  motion  upon 
affidavits,  which  the  defendant  may  prepare  to  oppose.* 
The  motion  for  a  change  of  venue  on  the  ground  that  the 
plaintiff  laid  his  action  originally  in  the  wrong  county 
should  be  made  before  issue  is  joined  ;*  but  a  motion  for  a 
change  of  venue  based  on  the  convenience  of  the  witnesses 
should  not  be  made  before  issue  has  been  joined.* 

§  29.  Where  property  situated  in  two  states. — It  has 
been  said  that  where  mortgaged  property  is  situated  partly 
in  one  state  and  partly  in  another,  that  a  court  possessing 
equity  jurisdiction  may  entertain  a  suit  to  foreclose  the 
mortgage  as  to  the  whole  of  the  property.'  It  seems, 
however,  that  the  better  practice  is  to  bring  a  separate  suit 
in  each  state  for  the  foreclosure  of  the  mortgage  on  the 
portion  of  the  property  located  in  that  state.* 

§  30.  Where  the  land  lies  out  of  the  state. — Where  all 
the  real  property  to  which  an  action  relates  is  situated 
without  the  state  the  action  must  be  tried  in  the  county  in 
which  one  of  the  parties  resides  at  the  commencement 
thereof.  If  none  of  the  parties  reside  in  the  state  it  may 
be  tried  in  any  county  which  the  plaintiff  designates  for 
that  purpose  in  the  title  of  the  complaint.' 


»  N.  T.  Code  Civ.  Proc.  §  987.  (1852) ;  Lynch  v.  Mosher,  4  How. 

« Veeder  v.  Baker,  83  N.  Y.  156  (N.  Y.)  Pr.  86  (1849).  See  also 
(1880).  See  also  International  Life  Hartman  v.  Spencer,  5  How.  (N. 
Assurance  Co.  v.  Sweetland,  14  Abb.  Y.)  Pr.  135  (1850) ;  Mixer  v.  Kuhn, 
(N.  Y.)  Pr.  240  (1862) ;  Hubbard  v.  4  How.  (N.Y.)  Pr.  409  (1850);  Beards- 
National  Protection  Ins.  Co.,  11  ley  V.  Dickerson,  4How.  (N.  Y.)Pr. 
How.  (N.  Y.)  Pr.  149  (1855) ;  Park  81  (1848). 

V.  Camley,  7  How.  (N.  Y.)  Pr.  355  »  Mead  v.  New  York  H.  &  N.  R. 

(1852).  R.  Co.,  45  Conn.  199,   223  (1877). 

«  See  Wood  v.  HoUister,  3  Abb.  See  Toller  v.  Carteret,  2  Vern.  494 

(N.  Y.)  Pr.   14  (1856);    Toll    v.  (1705);   Penn  v.  Baltimore,  1  Ves. 

Cromwell,  12  How.  (N.  Y.)  Pr.  79  Sr.  444  (1750). 

(1855) ;  Hubbard  v.  National  Pro-  « In  re  U.  S.  Rolling  Stock  Co.,  55 

tection  Ins.  Co.,  11  How.  (N.  Y.)Pi.  How.  (N.  Y.)  Pr.  886  (1878).    See 

149  (1855) ;   Schenck  v.   McKie,  4  Farmers'  L.  &  T.  Co.  v.  B.  &  M.  T. 

How.  (N.  Y.)  Pr.  245  (1849).  Co.  44  Hun  (N.  Y.)  400  (1887). 

*  Merrill  v.  Grinnell,  10  How.  (N.  '  N.  Y.  Code  Civ.  Proc.  §§  982, 

Y.)  Pr.   32    (1854) ;    Hinchman   v.  984.    See  House  v.  Lockwood,  40 

Butler,   7   How.  (N    Y.)  Pr.    463  Hun  (N.  Y.)  532  (1886). 


26  FORECLOSURES   TRAlSrSITOEY.  [§§31-32. 

§  31.    Where  the  parties  reside  in  another  state, — 

Some  courts  have  held  that  equity  acts  only  in  personam  and 
not  ill  rem,  and  that  if  a  bill  to  foreclose  be  filed  in  the  state 
and  county  where  the  mortgaged  lands  are  situated,  all 
the  parties  being  citizens  of  another  state,  jurisdiction  of 
the  action  can  be  acquired  by  proper  personal  service  of  the 
process ;'  but  the  better  doctrine  would  seem  to  be  that  an 
action  to  foreclose  is  an  action  purely  in  rem  and  not  in 
personam,  and  that  the  mortgage  may  be  foreclosed  and  the 
property  sold  to  satisfy  the  mortgage  debt  without  personal 
service  of  process  on  the  defendant  or  his  appearance  in 
court  regardless  of  the  residence  of  the  parties.  If,  however, 
there  has  been  no  personal  service  within  the  jurisdiction  of 
the  court  and  no  appearance,  the  court  will  have  no  jurisdic- 
tion over  the  person  of  the  defendant,  and  a  judgment  for 
deficiency  can  not,  for  that  reason,  be  entered," 

§  32.  Transitory  action. — Aside  from  statutory  require- 
ments an  action  to  foreclose  a  mortgage  is  not  a  local  but  a 
transitory  action,  and  a  bill  may  be  brought  or  a  complaint 
filed  wherever  jurisdiction  of  the  parties  can  be  acquired.'  And 
it  has  been  said  that  a  complaint  for  foreclosure  of  the  equity 
of  redemption  in  mortgaged  lands,  is  transitory  and  that  any 
court  where  a  necessary  defendant  is  served  with  process, 
has  jurisdiction  ;*  but  that  if  a  decree  for  sale  only  is  asked 


«  Grace  v.  Hunt,   Cooke  (Tenn.)  4  Duer  (N.  Y.)  682  (1856) ;  Variaa 

841(1813).  V.   Stevens,    3  Duer  (N.    Y.)   635 

«  Ewer    V.    Coffin,   55    Mass.    (1  (1853).   Sec  Broome  v.  Beers,  6  Conn. 

Cush.)  23  (1848) ;  Phelps  v.  Holker,  198  (1826) ;  Finneganv.  Manchester, 

1  U.  S.  (1  Ball.)  261  (1788) ;  bk.   1  12  Iowa,  521  (1861) ;  Cole  v.  Connor, 

L.  ed.  128  ;  Kilburn  v.  Woodworth,  10  Iowa,  299  (1860) ;    Caufman  v. 

5  Johns.  (N.  Y.)  37  (1809);  Robinson  Sayre,  2  B.  Mon.  (Ky.)  202  (1841) ; 

V.  Exrs.  of  Ward,  8  Johns.  (N.  Y.)  Newman  v.  Stuart,  Cooke  (Tenn.) 

86(1811);  Bisscll  V.  Briggs,  9  Mass.  339  (1813);  Kinney  v.   McLeod,  8 

461,  468  (1813) ;  Ocean  Ins.  Co.  v.  Tex.  78  (1852) ;  Paget  v.  Ede.  L,  R. 

Portsmouth    Marine    Ry.     Co.    44  18  Eq.  118  (1874) ;  Toller  v.  Carteret, 

Mass.  (3  Mete.)  420  (1841)  ;  Danforth  2  Vera.  494  (1705). 
V.   Penny,   44  Mass.  (3  Mete.)  564         *  Caufman  v.   Sayre,   2  B.  Men. 

(1842).  (Ky.)  202  (1841).     See  also  Paget  v. 

»  Bates    V.    Reynolds,    7    Bosw.  Ede,  L,  R,  18  Eq.  118  (1874). 
(N.  Y.)  685  (1860) ;  Porter  v.  Lord, 


§  32.]  FOREOLOSITEES   TRANSTTOKT.  27 

the  court  of  the  county  where  the  land  lies  is  the  only  court 
that  has  jurisdiction.*  Thus  where  six  different  mortgages 
were  given  upon  distinct  parcels  of  land  laying  in  six 
different  counties,  to  secure  a  distinct  portion  of  a  promissory 
note  therein  described,  and  an  action  was  brought  in  a 
county  where  one  of  the  mortgaged  tracts  was  located  to 
forclose  all  six  of  the  mortgages,  it  was  held  that  as  to  the 
five  mortgages  on  the  lands  lying  in  the  counties  other  than 
that  in  which  the  action  was  commenced,  the  venue  was 
wrong  and  that  the  court  had  no  jurisdiction  to  try  the 
issues  arising  thereon."  But  in  those  cases  where  the  land 
mortgaged  consists  of  one  tract  laying  in  two  or  more 
different  counties,  a  suit  may  be  brought  to  foreclose  in 
either  of  the  counties  in  which  the  land  is  partly  situated.* 
It  is  held  in  Connecticut,  however,  that  a  bill  to  foreclose 
a  mortgage  need  not  be  brought  in  the  county  where  the 
land  lies,  the  title  of  the  mortgagee  not  being  in  question.* 


*  Chadboume  v.  Gilman,  29  Iowa,  question  under  the  plaintiff's  bUl  of 
181  (1870) :  Owings  v.  Beall,  8  Litt.  foreclosure ;  and  such  suits  have 
(Ky.)  104  (1823) ;  Caufman  v.  Sayre,  always  been  considered  transitory, 
2  B.  Mon.  (Ky.)  202  (1841).  citing  Austin  v.  Burbank,  3  Day 

«  Chadboume  v.  Gilman,  29  Iowa,  (Conn.)  474,  477  (1807) ;  s.  c.  2  Am. 

181  (1870).  Dec.  119  ;  Owen  v.  Walter,  Superior 

«  Owings  V.  BeaU,  3  Litt  (Ky.)  103  Court  Hartford  County  (1816);  Owen 

(1823).  T.  Granger,  Superior  Court  Hartford 

*  Broome  v.  Beers,  6  Conn.  198  County  (1802) ;  Anon.  2  Chan.  Cao. 
(1826).  In  this  case  the  court  say  :  244  (1679) ;  Pow.  Mort.  1043 ;  S 
The  title  to  the  land  was  not  in  Swift's  Dig.  197. 


CHAPTEK    m. 


WHEN  FORECLOSURE  MAY  BE  COMMENCED. 


§  83.  Right  to  foreclose. 

84.  When  right  to  foreclose  ac- 

crues. 

85.  When  previous    demand  not 

necessary. 

86.  Interest   clause — Breach  mak- 

ing mortgage  due. 

87.  Effect  of  such  a  condition. 

88.  Stipulation  against  forfeiture. 

89.  Note  payable  on  demand. 

40.  Where  the  time  of  payment  is 

not  specified. 

41.  Mortgage  payable  in  install- 

ments. 

42.  Failure  to  pay  interest. 

43.  Failure  to  pay  taxes. 

44.  Election   of    mortgagee    that 

debt  become  due. 


§  45.  Notice  of  election. 

46.  Who  may  exercise  option  to 

declare  the  debt  due. 

47.  Power  of  court  to  relieve  from 

forfeitm-e. 

48.  Where  mortgagee  holds  one 

mortgage  securing  several 
notes. 

49.  Where  mortgagee  holds  more 

than  one  mortgage  on  the 
same  property  securing  dif- 
ferent debts. 

60.  Indemnity  mortgage. 

61.  Parol  agreement  as  to  time  of 

payment. 
63.  Agreement    not    to    enforce 
mortgage. 

63.  Extension  of  time  of  payment, 

64.  Extension  of  time  by  parol. 


§  33«  Right  to  foreclose. — With  every  mortgage  there 
exists  an  inherent  right  of  foreclosure,  whether  the  fore- 
closure results  in  vesting  an  absolute  title  to  the  property  in 
the  mortgagee,  as  was  formerly  the  case  in  England,  or  in  a 
judicial  sale  of  the  premises,  as  is  now  the  case  in  most  of 
our  states.'  Such  right  of  foreclosure  is  not  an  unrestrained 
one,  for  as  long  as  the  mortgagor  keeps  his  covenants,  the 
mortgagee  can  have  no  grievance  to  redress,  and  the  mor^ 
gagor  will  be  entitled  to  the  undisturbed  possession  of  the 
mortgaged  premises ;  the  right  to  foreclose  arises  only  where 
the  condition  of  the  mortgage  has  been  forfeited  by  failure 
to  pay  the  principal  or  interest  when  due,  or  by  some 
similar  breach  of  contract.'     The  lapse  of  time,  however, 


>  Koch  V.  Briggs,  14  Cal.  256,  262      78  ;  James  v.  Fisk,  17  Miss.  (9  Smed. 
(1859) ;  s.  0.  73  Am   Dec.  651.  &  M.)  144,  150  (1847) ;  s.  c.  47  Am. 

»  Wilkinson  v.  Flowers,  37  Miss.       Dec.  Ill  ;  Gladwyn  v.  Hitchman,  9 
679,  584  (1859) ;  s.  c.  75  Am.  Dec.       Vern.  135  (1689). 

28 


§  34.]  EIGHT  TO   FORECLOSE.  29 

which  usually  determines  the  right  to  institute  an  action  for 
foreclosure,  is  not  always  the  criterion  by  which  the  com- 
plainant is  to  be  governed,  for  that  right  may  be  made  to 
depend  upon  other  events  or  contingencies.  This  is 
especially  the  case  where  the  mortgage  declared  upon  is  an 
indemnity  mortgage,  conditioned  to  protect  the  mortgagee 
against  liability  and  to  save  him  harmless  from  loss.*  As  a 
rule,  however,  the  right  of  action  does  not  accrue  upon  an 
indemnity  mortgage  until  the  mortgagee  has  paid  the  whole 
or  a  part  of  the  debt,  or  his  principal  has  defaulted  upon  the 
debt  which  the  mortgage  was  given  to  secure.*  This  is 
particularly  true  where  the  condition  of  the  covenant  is 
simply  to  pay  the  obligation.' 

The  nature  of  the  security  may  be  such  that  an  event  not 
contemplated  by  the  parties,  nor  provided  for  in  their 
agreement,  may  render  it  impossible  for  the  mortgagor  to 
comply  with  the  conditions  of  his  mortgage.  In  such  an 
event  a  right  of  action  will  accrue  at  once.  Thus  it  has  been 
held  that  where  a  mortgage  was  given  by  a  manufacturing 
company  to  secure  an  executory  contract  running  through  a 
term  of  years,  and  the  company  subsequently  failed  and 
became  wholly  insolvent,  a  right  of  action  accrued  upon  the 
mortgage  forthwith,  because  it  was  evident  that  it  would  be 
impossible  for  the  company  to  keep  its  engagements.* 

§  34.  When  right  to  foreclose  accrues. — ^An  action  to 
foreclose  a  mortgage  will  not  lie  until  the  debt  secured  has 


»  Bee  Ellis  v.  Martin,  7  Ind.  652  (1842) ;  Pond  v.  Clarke,  14  Conn. 

(1856) ;  Francis  v.  Porter,  7  Ind.  213  834  (1841) ;  Shepard  v.  Shepard,  6 

(185£0 ;  Lewis  v.  Richey,  5  Ind.  152  Conn.  37  (1825) ;  Francis  v.  Porter, 

(1854) ;  Butler  v.  Ladue,  12  Mich.  7  Ind.  218  (1855) ;  McLean  v.  Rags- 

173  (1868) ;  Dye  v.  Mann,  10  Mich,  dale,  81  Miss.  701  (1856) ;  Ohio  Life 

291  (1862) ;  Thurston  v.  Prentiss,  1  Ins.  «fe  Trust  Co.  v.  Reeder,  18  Ohio. 

Mich.  193  (1849).  85  (1849) ;  McConnell  v.  Scott,  15 

» Piatt  V.  Smith,  14  Johns.  (N.  Y.)  Ohio,  401  (1846) ;  s.  c.  45  Am.  Dec. 
868  (1817) ;  Powell  v.  Smith,  8  683 ;  Kramer  v.  Trustees  of  Farm- 
Johns.  (N.  Y.)  249  (1811) ;  Rodman  ers'  &  Mechanics'  Bank  of  Steuben- 
▼.  Hedden,  10  Wend.  (N.  Y.)  500  ville,  15  Ohio,  254  (1846). 
(1833)  ;  Ketchum  v.  Jauncey,  23  *  See  post  %  50. 
Conn.  126  (1854) ;  Beckwith  v.  *  Harding  v.  Mill  River  Woolen 
Windsor  Manuf.  Co.,  14  Conn.  594  Manuf.  Co.,  34  Conn.  458, 461(1867). 


30  PREVIOUS    DEMAND    NOT    NECESSAEY.  [§  35. 

matured,'  or  its  conditions  have  in  some  way  been  broken,  or 
their  performance  by  the  mortgagor  or  other  party  liable 
has  been  rendered  impossible.  Even  where  a  mortgagee 
whose  debt  is  not  due,  is  made  a  defendant  in  the  foreclosure 
of  a  subsequent  mortgage  securing  a  debt  which  is  due,  and 
files  a  cross-complaint  setting  up  such  prior  mortgage 
and  asking  its  foreclosure,  the  court  will  decree  the  fore- 
closure of  the  subsequent  mortgage  alone,  and  order  the 
property  to  be  sold  subject  to  the  lien  of  the  prior  mortgage ; 
it  seems  that  the  court  can  not  foreclose  the  prior  mortgage 
nor  order  a  sale  to  satisfy  it  under  such  cross-complaint." 

§  35'    When  previous  demand  not  necessary. — In  the 

foreclosure  of  a  mortgage  given  to  secure  a  note  payable  on 
demand  and  not  at  a  particular  time  or  place,  a  demand  of 
payment  is  not  necessary  before  the  commencement  of  the 
action.*  Nor  is  it  necessary  to  make  a  demand  before 
bringing  a  suit  to  foreclose,  where  the  note  is  payable  on 
demand  at  a  particular  place  ;  but  if,  in  such  a  case,  the 
defendant  shows  that  he  was  ready  at  the  appointed  place 
to  make  payment,  and  brings  the  money  into  court,  he  will 
be  relieved  from  interest  and  costs.*     Where  a  mortgage  was 


»  KeUy  V.  Bogardus,  51  Mich.  623  67  Mass.  (1  Gray)  496  (1854) ;  Wat- 

(1883).  kins  v.  Crouch,  5  Leigh  (Va.)  52» 

» Trayser  v.  Trustees  of  Indiana  (1834) ;   Rumball  v.  Ball,  10  Mod- 

Asbury    University,    39    Ind.    556  38(1712). 

(1872).  *  Green  v.  Goings,  7  Barb.  (N.  Y.) 

'  Locklin  v.  Moore,  57  N.  Y.  362  653,  655(1850) ;  CaldweU  v.  Cassidy, 

(1874) ;  Hills  v.  Place,  48  N.  Y.  520  8  Cow.  (N.  Y.)  271  (1828) ;  Place  v. 

(1872);   s.  c.  8  Am.  Rep.  568;  36  Union  Express  Co.,  2  Hilt.  (N.  Y.) 

How.  (N.  Y.)  Pr.  26  ;  Pusey  v.  New  19,  31  (1858) ;  Gay  v.  Paine,  5  How. 

Jersey  &  W.  L.  R.  R.  Co.,  14  Abb.  (N.  Y.)  Pr.  108  (1850) ;  Wolcott  v. 

(N.  Y.)  Pr.  N.  S.  434,  439  (1873) ;  VanSantvoord,  17  Johns.   (N.   Y.) 

Hirst  V.  Brooks,  50  Barb.  (N.  Y.)  248  (1819) ;  s.  c.  8  Am.  Dec.  396 ; 

334(1867);  Gillettv.Balcom,  6  Barb.  Foden  v.  Sharp,  4  Johns.  (N.  Y.) 

(N.   Y.)  370   (1849) ;    Caldwell    v.  183  (1809) ;  Locklin    v.    Moore,    5 

Cassidy,  8  C(.w.  (N.  Y.)  271  (1828) ;  Lans.  (N.  Y.)  308  (1871) ;  Nazro  v. 

Nelson  v.  Bostwick,  5  Hill  (N.  Y.)  Fuller.  24  Wend.  (N.  Y.)  376  (1840); 

87  (1848) ;  s.  c.  40  Am.  Dec.  310  ;  Haxtun  v.  Bishop,  3  Wend.  (N.  Y.) 

Wolcott  V.  VanSantvoord,  17  Johns.  13  (1829) ;  Carley  v.  Vance,  17  Mass. 

(N.  Y.)  248  (1819) ;  s.  c.  8  Am.  Dec.  389  (1821) ;   Fullerton  v.  Bank  of 

396 ;  Haxtun  v.  Bishop,   3  Wend.  United  States,  26  U.  S.  (1  Pet.)  604 

(N.  Y.)  13  (1829)  ;Burnham  V.Allen,  (1828);  bk.  7  L.  ed.  28;  Bank  of 


§  3  6. J  DEFAULT   ON   INTEEEST   CLAUSE.  31 

given  as  collateral  security  for  a  bond  to  the  treasurer  of  a 
state,  payable  on  demand  with  annual  interest  at  a  specified 
date,  it  was  held  that  a  failure  to  pay  the  interest  as  stipu- 
lated was  a  breach  of  the  bond,  and  that  the  mortgagee, 
or  his  assignee,  could  maintain  a  suit  for  the  foreclosure 
thereof  without  pleading  or  proving  a  demand.* 

§  36.  Interest  clause — Breach  making  mortgage  due. 
— In  the  form  of  mortgage  generally  used  in  the  various 
states,  there  are  provisions  under  which  the  mortgage  may 
be  foreclosed  for  the  whole  debt  on  the  breach  of  a  single 
condition  or  covenant.'  The  parties  to  a  mortgage  can 
lawfully  agree  to  such  conditions  ;  and  when  they  do  so  the 
conditions  will  be  enforced  by  courts  of  equity.*  The  right 
to  foreclose,  upon  failure  to  perform  any  of  the  conditions 
of  a  mortgage,  need  not  be  formally  set  forth  in  exact 
words,  but  may  be  gathered  from  the  intention  of  the 
parties,  as  expressed  in  the  instrument.  Thus  where  it 
appears  from  the  mortgage,  that  it  was  the  intention  of  the 
parties  that  the  mortgagee  should  have  the  right  to  foreclose 
for  the  whole  debt  on  failure  to  pay  an  installment  thereof 
or  the  interest  when  due,  such  intention  will  be  upheld  by 
the  courts.*  But  where  a  mortgage  payable  in  installments 
contained  a  power  of  sale  conditioned  that  if  any  install- 
ment of  principal  or  interest  should  remain  unpaid  for  thirty 
days  after  it  became  due,  the  premises  should  be  sold  and 
the  surplus,  if  any,  arising  from  such  sale  should  be  paid 
to  the  mortgagor  after  deducting  the  interest  and  costs 
and  the  whole  debt  secured  by  the  mortgage,  the  court 
held  that  such  a  condition  was  only  intended  to  authorize  a 


United  States  v.  Smith,  24  U.  S.  (11  Bushfleld  v.  Meyer,  10  Ohio  St.  334 

Wheat.)  171  (1826) ;  bk.  6  L.  ed.  (1859) ;  Hosie  v.  Gray,  71  Pa.  St 

443  ;  Fenton  v.  Goundry,  13  East.  198  (1872). 

459  (1811).  »  Richards  v.  Hohnes,  59  U.   S. 

>  Austin  V.  Burbank,  2  Day  (Conn.)  (18  How.)  143  (1855)  ;  bk.  15  L.  ed. 

474  (1807)  :  s.  c.  2  Am.  Dec.  119.  304. 

»  See  Holden  v.  Gilbert,  7  Paige  *  Holden  v.  Gilbert,  7  Paige  Ch. 

Ch.  (N.  Y.)  208  (1838) ;  McLean  v.  (N.  Y.)  208  (1838) ;  Pope  v.  Durant, 

Pressley,  Adm'rs,  56  Ala.  211  (1876);  26  Iowa,  233  (1868). 
Pope  V.  Durant,  26  Iowa,  233  (1868); 


32  INTEEEST  CLAUSE EFFECT  OF.        [§  37. 

foreclosure  in  case  of  the  non-payment  of  the  interest  or 
installment  within  the  time  prescribed,  with  the  right  to 
retain  the  whole  debt  in  case  such  interest  or  installment 
and  costs  were  not  paid  before  the  sale  ;  but  that  mere 
failure  to  pay  the  interest  or  installment  within  the  pre- 
scribed time  did  not  of  itself  make  the  whole  mortgage  debt 
due  and  payable.* 

§  37.  Effect  of  such  a  condition. — Such  a  stipulation  in 
the  mortgage  is  not  regarded  as  a  penalty,  but  as  a  provision 
for  the  earlier  maturing  of  the  debt  upon  the  happening  of 
certain  contingencies.*  If  the  mortgage  does  not  contain 
such  a  stipulation  in  the  form  of  an  interest  clause,  the  decree 
of  foreclosure  can  direct  the  payment  of  such  part  of  the 
debt  only  as  is  due  at  the  time  of  the  commencement  of 
the  action,  or  as  may  become  due  before  the  final  hearing,  and 
to  effect  that  purpose,  direct  the  sale  of  such  part  only  of  the 
mortgaged  premises  as  may  be  necessary  to  pay  that  portion 
of  the  debt  which  has  matured.*  The  reason  for  this  is  that  a 
mortgage  is  merely  a  collateral  security,  and  being,  moreover, 
entitled  to  no  other  effect  in  equity,  should  not,  as  a  matter 
of  election  by  the  mortgagee,  be  enforced  by  a  court  of 
equity  for  any  other  purpose  than  that  of  paying  the  debt. 


»  Holden  v.  Gilbert,  7  Paige  Ch.  (1828) ;  Magruder  v.  Eggleston,  41 

(N.  Y.)  208  (1838).  Miss.  284  (1866) ;  Goodman  v.  Cin- 

•  Stillwell  V.  Adams,  29  Ark.  346  cinnati  &  C.  R.  R.  Co.,  2  Disney 

(1874) ;  Grattan  v.  Wiggins,  23  Cal.  (Ohio)  176  (1858) ;  Baker  v.  Lehman, 

16  (1863) ;   Jones  v.   Lawrence,  18  Wright  (Ohio)  522  (1834) ;  Richards 

Ga.    277    (1855) ;    Morgenstern   v.  v.  Holmes,  59  U.  S.  (18  How.)  14S 

Klees,  30  111.  422  (1863) ;  Taber  v.  (1855) ;  bk.  15  L.  ed.  304. 
Cincinnati  L.  &  C.  R.  Co.,  15  Lid.  *  Suffern  v.  Johnson,  1  Paige  Ch. 

459  (1860) ;  Hunt  v.  Harding,  11  Ind.  (N.  T.)  450  (1829) ;  B.  c.  19  Am.  Dec. 

245  (1858);  Smart  v.  McKay,  16  Lid.  440  ;   Mussina  v.   Bartlett,  8  Port. 

45  (1861).   See  Cecil  v.  Dynes,  2  Lid.  (Ala.)  277,  284  (1839) ;  Greenman  v. 

266    (1850) ;    Hough   v.    Doyle,    8  Pattison,  8  Blackf.  (Ind.)  465  (1847); 

Blackf.  (Ind.)  300  (1846) ;  Greenman  Adams  v.  Essex,  1  Bibb.  (Ky.)  149 

V.   Pattison,   8    Blackf.   (Ind.)   465  (1808);    8.    c.    4   Am.    Dec.    623; 

(1847) ;  Andrews  v.  Jones,  3  Blackf.  Caufman  v.  Sayre,  2  B.  Mon.  (Ky.) 

(Ind.)  440  (1834) ;  Mobray  v.  Leckie,  202  (1841) ;  Magruder  v.  Eggleston, 

42   Md.    474   (1875) ;    Schooley   v.  41  Miss.  284  (1866) ;  James  v.  Fisk, 

Remain,  31  Md.  575  (1869) ;  Salmon  17  Miss.  (9  Smed.   &  M.)  144,  153 

T.  Clagett,  3  Bland.  Ch.  (Md.)  125  (1847) ;  8.  0.  47  Am.  Dec.  111. 


§  37.]  DEFAULT   CLAUSES — COKDITIONS.  33 

or  so  much  thereof  only  as  may  be  due  and  unpaid  at  the 
time  of  granting  the  decree,  nor  to  any  greater  extent  than 
the  default  of  the  mortgagor  may  require.  The  process  of 
foreclosure  being  merely  incidental  to  every  mortgage,  a 
court  of  equity  will  not  enforce  a  technical  default  or 
forfeiture.  It  has  been  said  that  a  court  of  equity,  looking 
to  the  object  and  purpose  rather  than  to  the  letter  of  the 
contract,  treats  a  mortgage  as  collateral  security  merely,  and 
will  aid  the  mortgagee  no  farther  than  may  be  necessary  for 
enforcing  his  debt  upon  equitable  principles  as  it  becomes 
due. 

Therefore,  whatever  the  merely  legal  rights  of  a  mort- 
gagee may  be,  if  instead  of  enforcing  them,  he  elects  to 
resort  to  a  court  of  equity  for  foreclosure,  that  court  ought 
not  to  permit  the  action,  either  before  there  is  a  right  of 
redemption  of  which  the  mortgagor  could  avail  himself  by 
plea,  or  to  any  greater  extent,  finally,  than  that  to  which 
the  mortgagor  has  a  right  to  redeem.  A  mortgagor  has  no 
right  of  redemption  before  default ;  and  in  a  default  that 
results  only  from  the  non-payment  of  the  first  of  several 
installments  his  right  of  redemption  would  be  limited  to  that 
installment ;  he  could  not  anticipate  nor  be  required  to  pay 
the  other  installments  before  they  became  due.'  Courts 
of  equity,  without  the  aid  of  statutory  provisions,  but  from 
the  liberality  of  the  principles  and  rules  which  govern 
them,  have  it  in  their  power  so  to  shape  the  terms  of  the 
decree  of  foreclosure,  either  as  to  a  part  or  the  whole  of 
the  demand,  as  to  do  complete  justice  to  all  parties  interested, 
and  have  power  to  retain  jurisdiction  of  the  action  for  the 
purpose  of  making,  from  time  to  time,  such  further  orders  as 
justice  may  require."  This  latitude  of  decision  is  indispen- 
sably necessary  in  the  foreclosure  of  mortgages  to  secure  the 
payment  of  annuities,  jointures,  money  required  to  be  raised 
annually  for  the  maintainance  and  education  of  children,  and 
in  many  other  cases  of  a  similar  nature,  in  which,  if  it  were 
required  by  law,  that  no   proceeding  should  be  had  upon 


*  Caufman  v.   Sayre,  2  B.  Mon.  '  Adams  v.  Essex,  1  Bibb.  (Ky.) 

(Ky.)  202,  205-6  (1841).  149  (1808) ;  s.  c.  4  Am.  Dec.  623. 


34  DEFAULT   CLAUSES CONDITIONS.  [§  37. 

the  mortgage  to  foreclose  and  enforce  payment,  until  the 
last  installment  became  due,  the  very  object  of  the  contract 
would  be  defeated.' 

In  those  cases,  however,  where  the  good  of  all  the  parties 
concerned  requires  it,  the  decree  may  direct  a  sale  of  the 
whole  mortgaged  estate,  though  a  sale  of  the  entire  estate 
may  not  be  required  for  the  payment  of  .the  installments 
already  due.  This  may  be  done  particularly  where  the 
mortgagor  consents  to  the  sale,"  or  the  property  is  indivisible," 
or  where  the  court  is  satisfied  from  the  character  of  the 
property,  that  it  would  sell  to  better  advantage  if  sold  in  one 
parcel  at  one  time,  than  if  sold  in  separate  parcels  at  different 
times.*  Particularly  is  this  the  case  where  the  property  is  of 
such  a  nature,  or  the  circumstances  of  the  mortgagor  are  such, 
that  a  single  sale  of  the  entire  estate  would  either  pay  the 
whole  debt  or  approximate  more  nearly  to  it  than  several 
sales  of  the  premises  in  parcels  at  different  times.* 

But  where  the  entire  premises  are  sold  on  failure  to  pay  an 
installment  of  principal  or  interest,  such  sale  exhausts  the 
mortgagee's  remedy  by  foreclosure,  and  a  second  sale  can  not 
be  had  upon  the  maturity  of  the  whole  principal,"  because 
such  first  sale  of  the  mortgaged  premises  in  pursuance  of  a 
decree  of  foreclosure,  passes  to  the  purchaser  the  entire  title 
and  interest  of  both  the  mortgagor  and  the  mortgagee  in 
the  premises.* 

» Adams  v.  Essex,  1  Bibb.  (Ky.)  621 ;  Buford  v.  Smitli,  7  Mo.  489 

149  (1808) ;  8.  c.  4  Am.  Dec.  623.  (1842). 

'  Gregory  v.  Campbell,  16  How.         '  Holden  v.  Sackett,  13  Abb.  (N. 

(N.  T.)Pr.  417, 422  (1858);  Caufman  T.)    Pr.    473    (1861);    Lansing  ▼. 

V.  Sayre,  2  B.  Men.  (Ky.)  202,  209  Goelet,  9  Cow.  (N.  T.)  346  (1827) ; 

(1841).  Bradford  v.  Harper,  25   Ala.  337 

» Bank  of  Ogdcnsburg  v.  Arnold,  (1854) ;  Kelly  v.  Payne,  18  Ala.  371 

5  Paige  Ch.  (N.  Y.)  38  (1835);  (1850);  Hobby  v.  Pemberton,  Dudley 

Greenman   v.   Pattison,  8   Blackf.  (Ga.)  212  (1837) ;  Poweshiek  Co.  v. 

(Ind.)  465  (1847) ;  Caufman  v.  Sayre,  Dennison,  36  Iowa,  244,  248  (1873)  ; 

2  B.  Mon.  (Ky.)  202,  209  (1841).  B.  o.  14  Am.  Rep.  521 ;  Marston  v. 

*  Caufman  v.  Sayre,  2  B.  Mon.  Marston,  45  Me.  412  (1858) ;  Haynes 
(Ky.)  202,  209  (1841).  v.  Wellington,  25  Me.  458 ;  Brown 

*  Caufman  v.  Sayre.  2  B.  Mon.  v.  Tyler,  74  Mass.  (8  Gray)  135  (1857); 
(Ky.)  202,  209  (1841).  b.  c.  69  Am.  Dec.  239  ;  Ritger  v. 

*  Poweshiek  Co.  v.  Dennison,  36  Parker,  62  Mass.  (8  Cush.)  145  (1851); 
Iowa,  244  (1873) ;  8.  c.  14  Am.  Rep.  s.  o.  54  Am.  Dec.  744 ;  Clower  y. 


§  38.]  STIPULATION   AGAINST   FOEFEITirRE.  35 

§  38.  Stipulation  against  forfeiture. — It  is  competent 
for  the  parties,  at  the  time  of  executing  a  mortgage,  to 
stipulate  against  its  forfeiture;'  and  where  a  mortgage 
contains  an  absolute  covenant,  that  the  principal  shall 
not  be  called  in  during  a  speciiied  period,  or  until  the 
happening  of  a  certain  event,  a  default  in  the  payment  of 
the  interest  in  the  meantime  will  not  enable  the  mortgagee  to 
foreclose.  Thus  where  a  mortgage  provided  that  the  princi- 
pal should  not  be  called  in  during  the  life-time  of  the 
mortgagor,  it  was  held  that  the  failure  to  pay  a  yearly  interest, 
reserved  during  the  life-time  of  the  mortgagor,  did  not  give 
a  right  to  foreclose  '^  and  where  a  mortgage,  given  to  secure 
several  notes  maturing  at  different  times,  provides  that  none 
of  them  shall  become  payable  and  that  the  mortgage  shall 
not  be  foreclosed,  until  the  maturity  of  the  note  last  due,  a 
holder  who  purchases  one  or  more  of  the  notes  with  knowl- 
edge of  such  stipulation  in  the  mortgage  can  not  recover 
judgment  thereon  until  the  last  note  matures.*  In  such  a 
case  the  notes  and  the  mortgage,  having  been  contemporane- 
ously executed  and  relating  to  the  same  subject  matter, 
are  to  be  read  together  and  considered  as  one  instru- 
ment.* 

And  where,  at  the  time  a  mortgage  was  executed  and  as 
a  part  of  the  consideration  and  agreement  for  the  loan,  the 


Bawlings,  17  Miss.  (9  Smed.  &  M.)  483  (1845).    But  see  Burt  v.  Saxton, 

122  (1847) ;  s.  c.  47  Am,  Dec.  108 ;  1  Hun  (N.  Y.)  551  (1874). 

Stark  V.  Mercer,  4  Miss.  (3  How.)  » Noell  v.    Gaines,    68   Mo.    649 

877   (1839);    Carter   v.  Walker,   2  (1878);    s.  C.   8  Cent.    L.  J.   353; 

Ohio  St.  339  (1853);  West  Branch  Brownleev.  Arnold,60Mo.79(1875). 

Bank  V.  Chester,  11  Pa.  St.  282  (1849);  *  See  Church  v.  Brown,  21  N.  Y. 

McCaU  V.  Lenox,  9  Serg.  &  R.  (Pa.)  315,  330  (1860) ;  Hanford  v.  Rogers, 

802,  312  (1823) ;  Pierce  v.  Potter,  7  11  Barb.  (N.  Y.)  18  (1851) ;  Gammoa 

Watts  (Pa.)  477  (1838) ;   Berger  v.  v.    Freeman,   31    Me.    243  (1850) ; 

Heister,  6  Whart.  (Pa.)  214  (1840) ;  Hunt  v.  Frost,  58  Mass.  (4Cush.)  54 

Hodson  V.  Treat,  7  Wis.  263  (1858) ;  (1849) ;  Brownlee  v.  Arnold,  60  Mo. 

TaJhnan  v.  Ely,  6  Wis.  244  (1857) ;  79  (1875) ;  2  Parsons  on  Contr.  553. 

Hope  V.  Booth,  1  Barn.  &  Ad.  498  See  Clark  v.  Munrne,  14  Mass.  351 

(1830).  (1817);    Harrison    v.    Trustees    of 

>  Brownlee  v.  Arnold,  60  Mo.  79  Phillips'    Academy,   12    Mass,  456 

(1875).  (1815) ;  Gilliam  v.  Moore,  4  Leigh 

»  Burrowes  v.  MoUoy,  2  Jones  &  (Va.)  30  (1832) ;  s.  c.  24  Am.  Dec 

LaT.  521  (1845) ;  s.  c.  8  Irish  Eq.  704. 


36  MORTGAaE    PAYABLE    OlST   DEMAISTB.  [§  39. 

mortgagee  indorsed  upon  the  mortgage  a  stipulation  on  his 
part  that  "  the  loan  will  not  be  called  in  so  long  as  the 
mortgagor  continues  punctually  to  pay  the  interest  semi- 
annually, and  the  value  of  the  estate  pledged  shall  be 
double  the  amount  of  the  debt,  until  the  expiration  of  two 
years  after  the  service  of  a  written  notice,  stating  the  time 
when  payment  will  be  required,"  it  was  held  that  such 
stipulation  became  a  part  of  the  mortgage  contract  and  that 
the  mortgagee  or  his  assignee  could  not  maintain  an  action 
for  foreclosure  until  two  years  after  the  service  of  the 
required  notice.* 

§  39.  Note  payable  on  demand. — Where  a  note,  to 
secure  the  payment  of  which  a  mortgage  is  given,  is  payable 
on  demand,  it  is  due  immediately,'  and  the  mortgagee  has  a 
right  to  foreclose  at  any  time  without  making  a  previous 
demand.'  It  is  well  settled  that  when  a  right  of  action 
accrues  upon  the  note,  the  mortgage  securing  it  may  be 
foreclosed.  And  even  if  a  note  on  demand  is  payable  at  a 
particular  place,  no  previous  demand  need  be  averred  or 
shown  ;  but  if  the  defendant  pleads  that  when  the  suit  was 
commenced  he  was  ready  at  the  place  mentioned  in  the  note 
to  make  payment,  and  brings  the  money  into  court,  he  will 
thereby  discharge  himself  from  interest  and  costs.* 

But  where  the  conditions  in  a  mortgage,  given  to  secure  a 
promissory  note  payable  on  demand,  provide  that  if  the  note 
should  be  paid  "  within  sixty  days  after  such  demand  "  the 
mortgage  should  be  void,  a  demand  of  payment  at  least 
sixty  days  prior  to  the  commencement  of  a  foreclosure 
must  be  actually  shown.*    And  where  by  the  agreement  of 


1  Belmont  County  Branch  Bank  Ohio  St.   343,  357  (1880) ;  Hill  v. 

V.  Price,  8  Ohio  St.  299  (1858).  Henry,    17  Ohio,  9  (1848) ;  Darling 

«  Gillett  V.  Balcrm,  6  Barb.  (N.  Y.)  v.  Wooster,  9  Ohio  St.  517  (1859) ; 

370  (1849) ;  Pullen  v.  Chase,  4  Ark.  Rumball  v.  Ball,  10  Mod.  38,  (1713) ; 

210  (1842) ;  Hill  v.  Henry,  17  Ohio,  Bayley  on  Bills  (5th  ed.)  403  ;  Chitt. 

9  (1848).  on  Bills  (8th  ed.)  590,  608,  609. 

3  Gillett  V.  Balcom,  6  Barb.  (N.Y.)  '»  Haxtun    v.    Bishop,    3    Wend. 

370    (1849);    Haxtun  v.    Bishop,   3  (N.  Y.)  13,  21  (1829).     See  ante  %S5. 

Wend.  (N.  Y.)  13,  21  (1829) ;  Pullen  »  Union  Central  Life  Ins.  Co.  v. 

V.  Chase,  4  Ark.  210  (1842) ;  Union  Curtis,  35  Ohio  St.  343,  357  (1880). 
Central  Life  Ins.  Co.  v.  Curtis,  35 


§40.] 


TIME    OF   PAYMENT   NOT    SPECIETED. 


37 


the  parties  at  the  time  of  the  execution  of  a  note  payable 
on  demand,  it  was  orally  stipulated  that  it  should  not  be 
paid  until  a  future  specified  time,  the  statute  of  limitations 
against  such  note  will  begin  to  run  from  the  time  when  it 
was  payable,  according  to  the  agreement,  and  not  from  the 
date  of  its  execution.' 

§  40.    Where  the  time  of  payment  is  not  specified. — 

Where  a  note  or  bond  secured  by  mortgage,  is  given  for  the 
payment  of  a  specified  sum  of  money,  but  no  time  is  fixed 
for  such  payment,  the  law  supplies  the  omitted  element 
and  makes  the  debt  due  immediately.'  In  a  recent  case,' 
where  the  mortgage  did  not  distinctly  identify  the  date  or 
provide  a  time  of  payment,  it  was  held  to  be  due  as  soon 
as  given ;  and  in  another  case,*  where   the  condition  of  a 


»Hale  V.   Pack,  10  W.  Va.  145 

(1877). 

«  Gillett  V.  Balcom,  6  Barb.  (N.  Y.) 
870  (1849).  See  also  Purdy  v.  PhU- 
ips,  11  N.  Y.  406  (1854);  affi'g  1  Duer. 
(N.  Y.)  369 ;  People  v.  County  of 
Kew  York,  5  Cow.  (N.  Y.)  331 
(1826) ;  Rensselaer  Glass  Factory  v. 
Reid,  5  Cow.  (N.  Y.)  587  (1825) ; 
Reid  V.  Rensselaer  Glass  Factory, 
8  Cow.  (K  Y.)  393  (1824) ;  Clark  v. 
Barlow,  4  Johns.  (N.  Y.)  183  (1809) ; 
Selleck  v.  French,  1  Conn.  32(1814); 
8.  c.  6  Am.  Dec.  185  ;  Brown  v. 
Brown,  103  Ind,  23  (1885) ;  s.  c.  1 
West.  Rep.  128;  Green  v.  DrebU- 
bis,  1  G.  Greene  (Iowa)  552  (1848) ; 
Francis  v.  Castleman,  4  Bibb.  (Ky.) 
282  (1815) ;  Taylor  v.  Knox.  1  Dana 
(Ky.)  391  (1833) ;  b.  c.  5  Dana  (Ky.) 
466 ;  Goodloe  v.  Clay,  6  B.  Mon. 
(Ky.)  236  (1845) ;  Swett  v.  Hooper, 
62  Me.  54  (1873) ;  Jillson  v.  HUl,  70 
Mass.  (4  Gray)  316  (1855) ;  Dodge 
V.  Perkins,  26  Mass.  (9  Pick.)  369 
(1830);  Weeks  v.  Hasty,  13  Mass.  218 
(1816)  ;  Eaton  v.  Truesdail,  40  Mich. 
1,  6  (1879) ;  Rhoads  v.  Reed,  89  Pa. 
St.  436  (1879);  Heath  v.  Page,  63 
Pa.  St.  108  (1869) ;  s.  c.  3  Am.  Rep. 


533 ;  Northern  Pennsylvania  R.  R. 
Co.  V.  Adams,  54  Pa.  St.  94  (1867) ; 
Hummel  v.  Brown,  24  Pa.  St.  313 
(1855) ;  Lessee  of  Dilworth  v.  Sinder- 
ling,'l  Binn.  (Pa.)  488  (1808);  s.  c. 
2  Am.  Dec.  469 ;  Cheesborough  v. 
Hunter,  1  Hill  (S.  C.)  400  (1833) ; 
Smetz  V.  Kennedy,  Riley  (S.  C.)  218 
(1837);  Aikin  v.  Peay,  5  Strobh. 
(S.  C.)  15  (1850) ;  s.  c.  53  Am.  Dec. 
684;  Roberts  v.  Cocke,  28  Gratt. 
(Va.)  207  (1877);  Young  v.  Godbe, 
82  U.  S.  (15  Wall.)  562  (1872) ;  bk. 
21  L.  ed.  250  ;  Brewster  v.  Wake- 
field, 63  U.  S.  (22  How.)  118,  127 
(1859) ;  bk.  16  L.  ed.  301  ;  Sheehy 
V.  Mandeville,  11  U.  S.  (7  Cr.)  208, 
217(1812) ;  bk.  3L.  ed.  317  ;  United 
States  V.  Gurney,  8  U.  S.  (4  Cr.)  333 
(1808) ;  bk.  2  L.  ed.  638  ;  Rapelie  v. 
Emoiy,  1  U.  S.  (1  Dall.)  349  (1788) ; 
bk.  1  L.  ed.  170  ;  Farquhar  v.  Morris, 
7  T.  R.  124  (1797) ;  Bayley  on  Bills 
(5th  ed.)  §  14  p.  59  ;  Thompson  on 
Bills,  §  1,  p.  32. 

8  Eaton  V.  Truesdail,  40  Mich.  1 
(1879). 

*  Union  Central  Life  Insurance 
Company  v.  Curtis,  35  Ohio  St.  357 
(1880). 


38  MOETGAGE   PAYABLE   IN"   INSTALLMENTS.         [§  41. 

mortgage,  given  to  secure  the  payment  of  a  promissory  note 
payable  on  demand,  was  that  if  the  mortgagor  should  pay 
such  note  or  cause  it  to  be  paid,  the  mortgage  deed  should 
be  void,  the  court  held  in  an  action  to  foreclose  such  mort- 
gage, that  a  demand  of  payment  of  the  note,  before  suit, 
was  not  a  necessary  condition  precedent  to  a  right  of  action 
on  the  mortgage.' 

§  41.  Mortgage  payable  in  installments. — It  is  a  general 
rule  that  a  forfeiture  takes  place  and  a  right  of  action  accrues 
when  the  principal  of  the  debt  or  any  part  thereof  or  the 
interest  thereon  is  not  paid  at  the  time  agreed  upon  for 
the  payment  of  the  same,"  unless  there  has  been  a  new 
agreement  upon  a  sufficient  consideration  for  an  extension 
of  the  time  of  payment,'  in  which  case  the  right  to  foreclose 
will  be  suspended  until  the  expiration  of  the  extended  time.* 
It  is  lawful  for  the  parties  at  the  time  of  executing  a  mort- 
gage to  stipulate,  that  upon  a  failure  to  pay  an  installment 
of  the  principal  when  the  same  becomes  due,  the  whole 
principal  shall  immediately  become  due  and  payable ;  and 
under  such  a  stipulation  a  neglect  to  pay  an  installment  of 
the  principal  when  it  becomes  due,  will  work  a  forfeiture 
of  the  mortgage,*  and  an  action  for  the  foreclosure  and  sale 
of  the  premises  may  be  commenced  forthwith.* 


1  See  also  Darling  v.  "Wooster,  9  Saxton,  1  Hun  (N.  T.)  551  (1874) ; 

Ohio  St.  517  (1859) ;  Hill  v.  Henry,  but  see  Sharpe  v.  Arnott,  51  Cal.  188 

17  Ohio  9  (1848) ;  Norton  v.  Ellam,  (1875) ;  Pendleton  v.  Rowe.  34  Cal. 
2  M.  &  W.  460  (1837).  149  (18G7) ;  Maher  v.  Lamfrom,  86 

«  See  Grntlan  v.  Wiggins,  23  Cal.  111.  513(1877);  Flynnv.  Mudd,  27  HI 

16,  28  (1863)  ;  Jones  v.  Lawrence,  323  (1862)  ;  Redman  v.  Deputy,  26 

18  Ga.  277  (1855) ;  Adams  v.  Essex,  Ind.  338  (1866);  Lee  v.  West.  Jersey 
1  Bibb.  (Ky.)  149  (1808);  s.  c.  4  Am.  Land  Co.,  29  N.  J.  Eq.  (2  Stew.)  377 
Dec.  623  ;  Caufman  v.  Sayre,  2  B.  (1878) ;  Tompkins  v.  Tompkins,  21 
Mon.  (Ky.)  202  (1841);  West  Branch  N.  J.  Eq.  (6  C.  E.  Gr.)  338  (1871); 
Bankv.  Chester,  11  Pa.  St.  282(1849);  Massaker  v.  Mackerley,  9  N.  J.  Eq, 
Richards  v.  Holmes,  59  U.  S.  (18  (1  Stockt.)  440  (1853) ;  Union  Central 
How.)  143  (1855) ;  bk.  15  L.  ed.  Life  Ins.  Co.  v.  Bonnell,  35  Ohio 
304  ;  Stanhope  v.  Manners.  2  Eden.  St.  365  (1880) ;  Albert  v.  Grosvenor 
197  (1763) ;  Gladwyn  v.  Hitchman,  Investment  Co.,  L.  R.  3  Q.  B.  123 
3Vern.  135  (1(]S9).  (1867); 

«  See  post  %%  53,  54.  *  Whitcher  v.  Webb,  44  Cal.  127 

*  Reed  v.    Home   Savings  Bank,  (1872) ;  Ottawa  Northern  Plank  R. 

127  aiass.  295  (l^ld).     See  Burt  v.  Co.  v.   Murray,  15  111.  336  (1854) ; 


§  41.]         MORTGAGE  PAYABLE  IN  INSTALLMENTS.  39 

Where  a  mortgage  is  given  to  secure  a  note  payable  in 
installments  and  any  of  the  installments  are  not  paid  when 
they  fall  due,  such  non-payment  will  constitute  a  breach  of 
the  mortgage,  and  an  action  for  foreclosure  may  thereupon 
be  filed  and  a  sale  of  the  mortgaged  premises  had/ 

If  the  mortgage  contains  a  clause  authorizing  the  mort- 
gagee, upon  the  non-payment  of  interest  for  a  specified 
number  of  days  after  it  becomes  due,  to  elect  that  the  whole 
amount  unpaid  shall  become  due,  he  can  not  be  compelled 
to  accept  the  interest  and  to  waive  the  stipulation  after  the 
default  has  occurred  and  he  has  exercised  his  option.*  Nor 
is  the  mortgagee  estopped  from  asserting  his  right  of  election 
by  the  commencement  of  an  action  to  foreclose,  prior  to  the 
expiration  of  the  time  within  which  the  money  was  to  be 
paid  ;  neither  does  he  waive  his  right  of  election  by  accept- 
ing the  installment  of  principal  due  before  filing  an  amended 
or  supplemental  complaint  and  proceeding  in  the  action  for 
the  collection  of  the  unpaid  balance.* 


Noell  V.  Gaines,  68  Mo.  649  (1878) ;  (1854) ;  Mobray  v.  Leckie,  42  Mi 

Beisel  v.  Artman,  10  Neb.  181  (1880);  474  (1875). 

Ackerson  v.  Lodi  Branch  R.  R.  Co.,  After  a  breach  of  the  conditions 
31  N.  J.  Eq.  (4  Stew.)  42  (1879) ;  of  a  mortgage  or  deed  of  trust,  the 
Voorhis  v.  Murphy,  26  N.  J.  Eq.  cestui  que  trust  may  resort  to  a 
(11  C.  E.  Gr.)  434  (1875) ;  see,  how-  court  of  chancery  for  its  enforce- 
ever,  McLean  v.  Presley,  56  Ala.  ment,  without  alleging  any  other 
211  (1876) ;  Andrews  v.  Jones,  8  ground  therefor  than  such  breach. 
Blackf.  (Ind.)  440  (1834) ;  Indiana  McDonald  v.  Vinson,  56  Miss.  497 
&  I.  C.  R.  Co.  V.  Sprague,  103  U.  (1879). 

S.  (13  Otto)  756  (1880) ;  bk.  26  L.  i  See  Estabrook    v.    Moulton,    9 

ed.  554.  Mass.  258  (1812). 

«  See  Rubens  v.  Prindle,  44  Barb.  »  Malcolm  v.  Allen,  49  N.  T.  448 

(N.  Y.)  336  (1864) ;  Dwight  v.  Web-  (1872) ;  Rubens  v.  Prindle,  44  Barb, 

ster,  32  Barb.  (N.  Y.)  47  (1860) ;  s.  (N.  Y.)  336  (1864) ;  Ferris  v.  Ferris, 

c.  19  How.  (N.  Y.)  Pr.  349  ;  10  Abb.  28  Barb.  (N.  Y.)  29  (1858). 

(N.  Y.)  Pr.   128  ;  Ferris  v.  Ferris,  »  Malcolm  v.  Allen,  49  N.  Y.  448 

28  Barb.  (N.  Y.)  29  (1858) ;  8.  c.  16  (1872) ;  Lawson  v.  Barron,  18  Huu 

How.  (N.  Y.)  Pr.  102  (1858) ;  Grat-  (N.  Y.)  414  (1879) ;  Odell  v.  Hoyt, 

tan  V.  Wiggins,  23  Cal.  16  (1863) ;  73  N.   Y.   343  (1878).     Respecting 

Morgenstern  v.   Klees,    30  111.  422  waiver,  see  Wilson  v.  Bird,  28  N.  J. 

(1863) ;     Ottawa    Northern     Plank  Eq.  (1  Stew.)  353  (1877). 
Road  Co.   V.   Murray,    15  111.   336 


40  FORFEITUEE  ON  FAILUEE  TO  PAT  USTTEEEST.      [§  42. 

Where  a  note  and  mortgage  are  given  for  the  payment  of 
a  sum  of  money  in  installments,  with  the  stipulation  that  in 
case  of  default  in  the  payment  of  any  installment  the  whole 
principal  sum  shall  become  due  and  payable  at  the  option  of 
the  mortgagee,  it  is  necessary  for  the  mortgagee  to  take  his 
option  and  in  some  states  to  give  notice  thereof  before  an 
action  can  be  brought  to  recover  the  whole  principal  sum.' 

§  42.  Failure  to  pay  interest. — It  has  been  said  that  as  a 
rule  the  non-payment  of  the  principal  debt  or  interest  at  the 
time  agreed  upon,  works  a  forfeiture  of  the  mortgage  and 
entitles  the  mortgagee  to  bring  an  action  for  foreclosure.' 
The  reason  alleged  by  some  of  the  cases  for  the  rule  as  to 
interest,  is  that  the  interest  is  a  part  of  the  substance  of  the 
mortgage  debt  and  belongs  to  it  by  tacking,  and  that  it  is 
not  simply  an  incident  to  the  debt,  but  pro  tanto  is  the 
debt  itself.*  But  it  would  seem  that  in  the  absence  of  a 
stipulation  giving  the  power,  there  can  be  no  foreclosure  of 
a  mortgage  given  as  security  for  the  payment  of  a  promissory 
note  and  the  interest  thereon  until  the  principal  sum  becomes 
due,*  for  the  reason  that  the  court  can  not  shorten  the 
time  stated  in  an  express  agreement  between  the  parties, 
as  that  would  be  altering  the  nature  of  the  contract  to  the 
injury  of  the  maker  of  the  note.*  But  the  parties  may 
stipulate  that  upon  failure  to  pay  the  interest  promptly  at 
the  time  specified,  the  principal  shall  become  due,  in  which 
case,  on  non-payment  of  interest,  a  foreclosure  may  be  filed 
and  the   whole   debt  collected."      In    California,    however, 


'  Basse  T.  Callegger,  7  Wis.  442  (1881) ;   Harshaw  v.  McKesson,  66 

(1859) ;  8.  c.  76  Am.  Dec.  225.     See  N.  C.  266  (1872).    But  see  Estabrook 

post  §§44,  45.  V.  Moulton,  9  Mass.  258  (1812). 

*  West  Branch  Bank  v.  Chester,  *  Harshaw  v.  McKesson,  66  N.  C. 
11  Pa.    St.  282  (1849) ;  Richards  v.  266  (1872). 

Holmes,   57  U.    S.   (18  How.)    143  «  See  IMalcolm  v.  Allen,  49  N.  Y. 

(1855) ;  bk.  15  L.  ed.  304  ;  Stanhope  448  (1872) ;  Rubens  v.   Prindle,  44 

V.    Manners,    2  Eden.    197(1763);  Barb.    (N.    Y. )    336,   344    (1864); 

Gladwyn  v.  Hitchman,  2  Vera.  135  Valentine  v.  Van  Wagner,  37  Barb. 

(1689).  (N  Y.)  60  (1862) ;  Ferris  v.  Ferris, 

2  West  Branch  Bank  v.  Chester,  28  Barb.  (N.  Y.)  29  (1858) ;  Crane  v. 

11  Pa.  St.  282  (1849).  Ward,  Clarke  Ch.  (N.  Y.)  393  (1840); 

*  Brodribb  v.  Tibbets,  58  Cal.  6  Jester  v.  Sterling,  25  Hun    (N.  Y.) 


§  42.]      FOErEnXTEE  ON  FAILUEE  TO  PAY  INTEREST.  41 

where  a  promissory  note  due  to  a  corporation  two  years 
after  date  was  secured  by  a  mortgage  which  provided  that 
"  in  case  of  default  by  the  mortgagor  in  the  payment  of  said 
note  or  interest  or  in  the  performance  of  any  of  the  conditions 
hereof,  then  the  mortgagee  may  at  his  option  either  commence 
proceedings  to  foreclose  this  mortgage  in  the  usual  manner 
or  cause  the  said  premises  or  any  part  thereof  to  be  sold,"  it 
was  held  that  the  failure  to  pay  the  interest  as  it  became 
due,  authorized  a  foreclosure  for  such  interest  only,  and  not 
for  the  principal.* 

The  better  doctrine  seems  to  be  that  the  interest  falling 
due  yearly,  or  at  other  stated  periods,  on  a  note  secured  by 
mortgage,  is  an  installment  of  the  debt,  and  that  the  mort- 
gage may  be  foreclosed  to  enforce  its  payment,  because  the 
mortgage  must  have  been  given  to  secure  the  interest  as  well 
as  the  principal,  and  the  law  will  not  withhold  a  remedy 
until  the  period  elapses  for  the  maturity  of  the  whole  debt." 
And  where  a  condition  is  inserted  in  the  mortgage  which 
authorizes  a  sale  to  be  made  upon  the  happening  of  any 
default,  the  failure  to  pay  interest  when  it  is  due  is  a  default 
within  the  meaning  of  such  a  clause  and  will  entitle  the 
mortgagee  to  foreclose,'  notwithstanding  the  fact  that  such 


344  (1881) ;  Noyes  v.  Clark,  7  Paige  and  contained  a  clause  that  in  case 

Ch.  (N.  Y.)  179  (1838) ;  s.  c.  32  Am.  default  was  made  in  the  payment  of 

Dec.   620 ;    Mobray  v.  Leckie,    42  interest  quarterly,  the  note  should 

Md.  474  (1875);  Schooley  v.  Romain,  immediately  become  due  at  the  op- 

31  Md.  574,  583  (1869) ;  Chicago  D.  tion  of  the  holder;  and  that  the  fail- 

&  V.  R.  R.  Co.  V.  Fosdick,  106  U.  ure  to  pay  interest  made  the  whole 

S.  (16  Otto)  47  (1882) ;  bk.  27  L.  ed.  amount  due  absolutely  at  the  option 

47 ;  James  v.  Thomas,  5  Barn.   &  of   the   holder,    if   he   so    elected. 

Ad.  40  (1838) ;  Gowlett  v.  Han  forth,  without  any  notice  from  the  holder 

2   W.    Bl.    958    (1774);    Steel   v.  to  the  maker. 

Bradfield,    4    Taunt.    227    (1811);  « Brinckerhofl    v.   Thallhimer,    2 

Burrowes  V.  Molloy,  2  Jones  &  LaT.  Johns.   Ch.   (N.   Y.)  486   (1817); 

521  (1845);    8.   c.  8  Ir.  Eq.   482  Morgenstern  v.   Klees,  30  111.  423 

(1843).  (1863). 

'  Bank  of  San  Louis  Obispo  v.  ^  Goodman  v.  Cincinnati  &  C.  R. 
Johnson,  53  Cal.  99  (1878).  But  see  R.  Co.,  2  Disney  (Ohio)  176  (1858)  • 
Whitcherv.  Webb,  44  Cal.  127(1872),  West  Branch  Bank  v.  Chester,  11 
in  which  case  a  promissory  note  Pa.  St.  282  (1849) ;  Stanhope  v.  Man- 
payable  at  a  future  time  provided  ners,  2  Eden.  197  (1763).  See  Burt  r. 
for  the  payment  of  interest  quarterly  Saxton,  1  Him  (N.  Y.)  551  (1874). 


42  FOEFEITUEE   ON   FAILUEE   TO   PAY   TAXE8.       f§  43. 

failure  to  pay  the  interest  was  an  over-sight  on  the  part  of 
the  mortgagor.' 

§  43.  Failure  to  pay  taxes. — The  parties  to  a  mortgage 
may  not  only  stipulate  for  forfeiture  in  case  of  failure  to 
pay  interest  promptly  at  the  times  agreed  upon,  but  they 
may  also,  and  in  fact  usually  do,  provide  that  in  case  the 
mortgagor  fails  within  a  time  designated  to  pay  the  taxes 
and  assessments  levied  against  the  property,  the  mortgagee 
shall  have  the  right  to  elect  that  the  whole  mortgage  shall 
be  forfeited,  so  that  he  may  proceed  to  foreclose  and  sell 
the  property  to  pay  such  taxes  together  with  the  mortgage 
debt  and  interest.  Such  an  agreement  is  not  prohibited  by 
statute  nor  is  it  against  public  policy ;  it  is  not  a  hard 
contract  which  it  would  be  unconscionable  to  enforce,  because 
an  investor  may  very  properly  insist  that  his  security  shall 
be  kept  intact,  or  that  the  loan  shall  mature.  In  fact  such  a 
provision  is  very  analogous  to  an  agreement,  that  a  failure  to 
pay  the  interest  promptly  shall  render  the  whole  principal 
due. 

Such  stipulations  have  almost  invariably  been  upheld 
by  the  courts."  In  deciding  an  Iowa'  case  brought  for  the 
foreclosure  of  a  mortgage  which  contained  such  a  tax  clause 
the  court  say:  "  The  power  of  sale  for  the  non-payment  of 
taxes  was  intended  to  cover  more  than  accrued  interest. 
The  parties  made  their  own  agreement,  and  while  the  power 
to  sell  is  derived  from  the  instrument  itself,  it  is  equally  true 


>  Voorhis  v.   Murphy,   26  N.   J.  Paige  Ch.  (K  T.)  179  (1838);  a.  C. 

Eq.  (11  C.  E.  Gr.)  434  (1875).     See  32  Am.  Dec.  620 ;  Ottawa  Northern 

Dillett  V.  Kemble,  25  N.  J.  Eq.  (10  Plank  Road  Co.  v.  Murray,  15  111. 

C.  E.   Gr.)  66  (1874);  Haggerty  v.  387(1854);  Pope  v.  Durant,  26  Iowa, 

McCanna,  25  N.  J.  Eq.  (10  C.  E.  Gr.)  233,  240  (1868);  Stanclift  v.  Norton, 

48  (1874) ;  Graham  v.  Berryman,  19  11  Kan.  218,  222  (1873);  The  Con- 

N.  J.  Eq.  (4  C.  E.  Gr.)  29  (1868).  tributors  v.   Gibson,  2  Miles  (Pa.) 

«  See  Valentine  v.  VanWagner,  87  324  (1839);  Richards  v.  Holmes,  59 

Barb.  (N.    Y.)  60  (1862);  Ferris  v.  U.  S.  (18  How.)  143  (1855);  bk.  15 

Ferris,  28  Barb.   (N.  Y.)  29  (1858);  L.    ed.   304  ;  James  v.    Thomas,   5 

Crane  v.  Ward,  Clarke  Ch.  (N.  Y.)  Barn.    &  Ad.    40    (1833);    Steel  v. 

393  (1840);  Hale  v.   Gouverneur,  4  Bradfield,  4  Taunt.  227  (1811). 

Edw.  Ch.  (N.  Y.)  207(1843) ;  O'Con-  »  Pope  v.    Duraut,  26  Iowa,  233, 

nor  V.  Shipman,  48  How.  (N.  Y.)  240(1868). 
Pr.    126   {ISTo);   Noycs  v.  Clark  7 


§  43.]    OPTION  OF  MORTGAGEE — ^WHOLE  DEBT  DUE.  43 

that  where  it  has  been  fairly  made  the  courts  have  no  right 
to  make  another  agreement  for  them — no  power  to  say  that 
it  would  have  been  better  if  they  had  incorporated  other 
terms  and  conditions.  And  nothing  is  clearer  than  that  the 
object  and  design  of  the  parties  should  be  kept  in  view  in 
determining  the  nature  and  extent  of  the  power  conferred." 
Where  a  mortgage  provides  that  the  mortgagor  shall  pay 
all  taxes  and  assessments  levied  upon  the  mortgaged  premises, 
and  stipulates  that  in  default  thereof  the  mortgagee  may 
pay  the  same  and  collect  the  amount  thus  paid  as  a  part 
of  the  mortgage  debt,  the  failure  of  the  mortgagor  to  pay 
the  taxes  and  assessments  is  such  a  breach  of  the  condi- 
tion of  the  mortgage  as  to  entitle  the  mortgagee  to  proceed 
to  foreclose.*  The  fact  that  the  mortgagee  has  the 
right  to  pay  the  taxes  and  to  charge  them  to  the 
mortgagor,  the  same  to  become  a  part  of  the  mortgage 
lien,  makes  no  difference,  because  the  right  to  foreclose 
is  not  waived  or  lost  nor  the  default  condoned  by  the 
mortgagee  on  his  paying  the  taxes  or  assessments,  and 
charging  the  amount  thereof  to  the  mortgagor.'  The  failure 
of  the  mortgagor  to  pay  such  taxes  or  assessments,  however, 
is  not  such  a  breach  of  the  condition  of  the  mortgage  as  will 
give  the  mortgagee  a  right  to  foreclose  and  collect  the  whole 
amount  secured,  unless  there  is  a  clause  in  the  mortgage 
providing  that  the  whole  sum  shall  become  due  and  payable 
on  failure  to  pay  the  taxes  and  assessments.*  The  right  to 
foreclose  a  mortgage,  providing  for  the  payment  of  taxes 
and  assessments,  will  not  accrue  upon  the  mere  failure  of 
the  mortgagor  to  pay  them ;  to  acquire  that  right  it  is 
essential  that  the  holder  of  the  mortgage  shall  have  paid  off 
and  discharged  the  assessments  or  taxes ;  otherwise  no  debt 
will  have  accrued  and  no  money  will  have  become  due  which 
would  entitle  the  mortgagee  to  proceed  with  an  action.* 


»  Williams  v.  Townsend,  31  N.  T.  '  Williams  v.  Townsend,  81  N.  T. 

411  (1865);  Brickell   v.   Batchelder,  411  (1865). 

63  Cal.  623  (1882);  EUwood  v.  Wol-  ••  Williams  v.  Townsend,  31  N.  T. 

cott,  32  Kan.  526  (1884).  411  (1865). 

'Brickell  v.  Batchelder,  62  CaL 
623  (1882). 


44  OPTIOlSr    OF   MORTGAGEE    AND    NOTICE.  [§  44. 

§  44.  Election  of  mortgagee  that  debt  become  due.— 
"Where  a  mortgage  is  conditioned  that  upon  the  failure  to 
do  certain  things  specified,  as  the  payment  of  interest,  taxes, 
assessments  and  insurance,  the  mortgage  shall  be  forfeited 
at  the  option  of  the  mortgagee,  the  mortgage  debt  does  not 
become  due  and  the  right  to  foreclose  does  not  arise  until 
the  mortgagee  has  exercised  his  option,'  In  exercising  and 
making  known  his  option  to  consider  the  entire  debt  matured 
on  any  default,  however,  it  is  not  necessary  that  any  par- 
ticular form  of  words  should  be  used.  Thus  where  the 
record  recited  among  other  things  that  "the  mortgagee 
having  elected  to  declare  said  mortgage  due  and  payable, 
as  he  was  authorized  to  do  according  to  the  terms  and  con- 
ditions thereof,  and  having  entered  in  and  upon  said  premises 
and  taken  possession  thereof,  the  said  premises  were  duly 
advertised  for  public  sale,"  etc.,  it  was  held  to  be  suffi- 
cient." 

Where  a  mortgage  contains  a  clause  authorizing  the  mort- 
gagee, upon  non-payment  of  interest  for  thirty  days  after 
it  becomes  due,  to  elect  that  the  whole  amount  of  unpaid 
principal  shall  become  due,  he  can  not  be  compelled  to  accept 
the  interest  and  to  waive  the  stipulation  after  a  default 
has  occurred  and  he  has  made  his  election  in  accordance 
with  the  stipulation,  nor  will  he  be  estopped  from  asserting 
his  right  of  election,  by  the  commencement  of  a  foreclosure 
prior  to  the  expiration  of  the  thirty  days,  the  complaint 
wherein  simply  sets  up-  a  default  in  the  payment  of  an 
installment  of  principal  and  interest  due.  Nor  will  he 
waive  his  right  to  elect  by  accepting  the  installment  of 
principal.  He  has  the  right  to  file  an  amended  or  sup- 
plemental complaint,  and  to  proceed  in  the  action  for  the 
collection  of  the  balance  unpaid.'  And  where  in  such  a 
case,  after  tender  of  the  interest  and  costs,  the  mortgagee, 
without  amending  his  complaint  obtains  an  order  of  sale  for 
the  interest  only  and  perfects  judgment,  from  which  order 
and  judgment  no  appeal  is  taken,  the  court  will  have  power 


>  Randolph  v.  Middleton,  26  N.  J.  Eq.  (110  C.  E.  Gr.)  543  (1875). 
»  Harper  v.  Ely,  56  111.   179,   189  (1870). 
« Malcolm  v.  Allen,  49  N.  Y.  448  (1872). 


§  45.]      WHO   MAY   EXEECISE   OPTION   AND   NOTICE.  45 

upon  motion  and  notice  to  the  mortgagor  to  make  a  supple- 
mental order  directing  a  sale  and  payment  out  of  the  pro- 
ceeds, of  the  balance  of  the  mortgage  debt,  with  judgment 
against  the  mortgagor  for  any  deficiency.* 

§  45.  Notice  of  election. — Where  a  mortgage  contains 
a  provision  that  in  case  of  failure  to  pay  the  installments  of 
principal  and  interest,  or  the  taxes  and  assessments  levied 
against  the  property,  for  a  certain  number  of  days  after  they 
become  due  and  payable,  the  whole  mortgage  debt  shall 
become  payable  at  the  option  of  the  holder  of  the  mortgage, 
it  is  an  unsettled  question  in  some  states  whether  notice 
of  the  exercise  of  such  option  must  be  given  prior  to  the 
commencement  of  an  action,  or  whether  the  commencement 
of  a  foreclosure  is  sufficient  notice  of  the  election.  In 
New  York,'  Illinois,'  Indiana,*  North  Carolina*  and  perhaps 
other  states  it  is  held  that  no  notice  of  the  mortgagee's  elec- 
tion to  consider  the  whole  debt  due,  is  necessary,  but  that 
his  proceeding  to  enforce  the  mortgage  sufificiently  shows  his 
election.*  The  question  of  notice  of  election  arose  in 
Michigan  in  the  case  of  English  v,  Carney,*  but  was  not 
decided.  In  California*  and  Wisconsin'  it  is  held  that  the 
mortgagee  must  give  notice  of  his  election  whether  or  not 
the  whole  principal  shall  become  due  and  payable  on  account 
of  a  default  made  by  the  mortgagor,  where  the  mortgage 
provides  for  such  default  and  election. 


•  Malcolm  v.  Allen,  49  N.  T.  448,  Co.  v.  Munson,  60  Dl.  871,  875 
454  (1872).  See  also  Livingston  v.  (1871) ;  Heath  v.  Hall,  60  111.  844 
Mndrum,  19  N.  Y.  443  (1859).  (1871) ;  Harper  v.  Ely,  56  111.  179, 

» Hunt  V.  Keech,  8  Abb.  (N.  T.)  189  (1870). 

Pr.  204  (1856).     See  also  Howard  v.  '  25  Mich.  178,  184  (1872). 

Farley,   3  Robt    (N.  Y.)  599,   602  «  Dean  v.  Applegarth,  65  Cal.  891 

(1866).  (1884). 

» Hoodless  V.  Reid,  112  111.  105,  » Malcon  v.  Smith,  49  Wis.  200, 

112  (1885)  ;  Marston  v.  Brittenham,  215-217    (1880) ;    Marine    Bank    v. 

76  m.  611  (1875).  International  Bank,  9  Wis.   57,  68 

•  Buchanan  v.  Berkshire  Life  Ins.  (1859) ;  Basse  v.  Gallegger,  7  Wis. 
Co.,  96  Ind.  510,  520  (1884). '  442,  446  (1858) ;  a.  c.  76  Am.   Dec. 

» Young  V.  McLean,  63  N.  C.  576  225.     See  also  Hall  v.  Delaplaine, 

(1869).  5  Wis.   206  (1856);    s.  c.   68  Am. 

•  See  the  Princeton  Loan  &  Trust  Dec.  57. 


46  WHO  MAY  EXERCISE  OPTIOK  AND  NOTICE.  [§§46-47. 

A  notice  of  election  to  consider  the  whole  debt  due  by 
reason  of  a  default  in  the  payment  of  one  of  the  installments 
of  the  principal  or  interest  or  of  a  failure  to  pay  the  taxes 
and  assessments  within  the  time  limited,  given  by  an  attorney 
or  other  duly  authorized  agent  in  the  name  of  the  mort- 
gagee or  holder  of  the  mortgage,  will  be  sufficient.* 

§  46.  Who  may  exercise  option  to  declare  the  debt 
due. — The  mortgagee  has,  of  course,  a  right  to  exercise  the 
option  of  declaring  the  whole  debt  due ;"  so  also  can  any 
person  for  whose  benefit  the  provisions  for  the  forfeiture  of 
credit  are  made,  take  advantage  of  them.*  The  assignee  of  the 
mortgagee  may  exercise  this  option  in  the  same  manner  as 
the  mortgagee  himself.*  But  the  right  to  exercise  such 
option  is  an  indivisible  condition,  and  for  this  reason  can 
not  be  exercised  by  an  assignee  of  a  part  only  of  the  notes, 
secured  by  such  a  mortgage  ;  all  the  parties  owning  or  hold- 
ing such  notes  must  unite  in  exercising  the  option.*  It  has 
been  held  in  one  case'  that  such  a  stipulation  in  a  mortgage 
may  be  taken  advantage  of  by  the  mortgagor,  where  he  has 
transferred  the  property  mortgaged  to  a  grantee  who  assumed 
and  agreed  to  pay  the  mortgage  debt,  according  to  the  con- 
ditions of  the  mortgage,  as  part  of  the  consideration  of  the 
conveyance. 

§  47.  Power  of  court  to  relieve  from  forfeiture. — Where 
the  mortgage  contains  a  stipulation,  providing  that  the  whole 
debt  shall  become  due  at  the  option  of  the  mortgagee  in  case 
of  failure  to  make  punctual  payments,  the  court  can  not 
relieve  the  mortgagor  from  his  defaults  even  on  the  payment 
of  the  installments  due  with  costs,  but  is  bound  to  give  effect 
to  the  bond  and  mortgage  according  to  its  provisions  and 


iRosseelv.  Jarvis,  15  Wis.  571,  Oilman,    4   Wend.    (N.   T.)    414 

578  (1863).  (1830). 

«  8ee  Princeton  Loan  and  Trust  *  Heath  v.  Hall,  60  El.  344,  349 

Co.  V.  Munson,  60  HI  371  (1871) ;  (1871). 

Heath  v.  Hall,  60  111.  344  (1871)  ;  "  The  Marine  Bank  of  Buffalo  v. 

Harper  v.  Ely,  56  111.  179  (1870).  International  Bank,  9  Wis.  57  (1869). 

« Mallory  v.  West  Shore,  H.   R.  *  First  National  Bank  v.  Peck,  8 

R.   R.    Co.,  85  N.  Y.   Super.   Ct.  Kan.  660  (1871). 
(3  J.  &  S.)  174  (1873) ;  Fellows  v. 


§  47.]  WHEN"   COUET   MAT   RELIEVE    DEFAULT.  47 

the  election  of  the  mortgagee.*  In  an  old  New  York  case,' 
the  court  say  :  "  The  parties  had  an  unquestionable  right  to 
make  the  extension  of  credit  dependent  upon  the  punctual 
payment  of  the  interest  at  the  times  fixed  for  that  purpose. 
And  if,  from  the  mere  negligence  of  the  mortgagor  in  per- 
forming his  contract,  he  suffers  the  whole  debt  to  become 
due  and  payable,  according  to  the  terms  of  the  mortgage,  no 
court  will  interfere  to  relieve  him  from  the  payment  thereof, 
according  to  the  conditions  of  his  own  agreement."  * 

If,  however,  the  mortgagee  or  party  holding  the  mortgage 
has  been  guilty  of  fraud,  because  of  which  the  mortgagor 
was  unable  to  ascertain  who  was  the  owner  of  the  mortgage, 
or  to  find  the  mortgagee  or  such  owner  in  order  to  make  the 
stipulated  payment,  the  court  will  relieve  him  from  his 
default.*  And  it  seems  that  such  a  foreclosure  will  not  be 
enforced  against  one,  who  denies  in  good  faith  and  upon 
reasonable  grounds  that  he  is  liable  to  pay  the  interest  in 
arrear,  or  who  claims  that  he  has  paid  it,  even  when  it 
appears  from  the  evidence  that  he  is  in  error  in  regard  to 
such  liability  or  payment.*  But  where  the  only  questions 
are  as  to  the  proper  tender  of  the  amount  due,  and  whether 
the  tender  was  made  at  the  prescribed  time,  they  must  be 
determined  upon  the  trial  of  the  foreclosure  action.* 


*  Sec  Bennett  v.  Stevenson,  53  N.  »  See  also  Gowlett  v.  Hanforth,  3 
Y.  508  (1873) ;  Ferris  v.  Ferris,  28  W.  Bl.  958  (1774) ;  Steel  v.  Brad- 
Barb.  (N.  Y.)  29,  33  (1858) ;  Hale  v.  field,  4  Taunt.  227  (1812). 
Gouvemeur,  4  Edw.  Ch.  (N.  Y.)  *  See  Noyes  v,  Clark,  7  Paige  Ch. 
207  (1843) ;  O'Connor  v.  Shipman,  (N.  Y.)  179  (1838);  s.  o.  32  Am.  Dea 
48  How.  (N.   Y.)  Pr.   126  (1873) ;  620. 

"Noyes  v.  Clark,  7  Paige  Ch.  (N.Y.)  »  Wilcox  v.  Allen,  86  Mich.  160 

179  (1838) ;  s.  c.  32  Am.  Dec.  620 ;  (1877). 

Savannah  &  M.  R.  R.  Co.  v.  Lan-  «  Bennett  v.  Stevenson,  53  N.  Y. 

caster,  62  Ala.  555  (1878) ;  Mobray  508,  610  (1873) ;  Asendorf  v.  Meyer, 

V.    Leckio,    42    Md.    474    (1875);  8  Daly  (N.  Y.)  278  (1879) ;  Lynch  v. 

Schooley  v.   Remain,  31  Md.   574  Cunningham,   6  Abb.   (N.Y.)  94 

(1869) ;  Magruder  v.  Eggleston,  41  (1858) ;  Thurston  v.  Marsh,  5  Abb. 

Miss.  284  (1866).  (N.  Y.)  389  (1857) ;   s.  c.  14  How. 

•  Noyes  v.   Clark,  7   Paige    Ch.  (N.  Y.)  573.     See  Spring  v.  Fisk,  21 
(N  Y.)  179  (1838);  8.  c.  32  Am.  Dec.  N.  J.  Eq.  175  (1870). 

620. 


48  KOTES  SECURED  BY  ONE  MORTGAGE.    [§§  48-49. 

§  48.  Where  mortgagee  holds  one  mortgage  securing 
several  notes. — Where  a  mortgagee  holds  a  mortgage  secur- 
ing several  notes  maturing  at  different  times,  conditioned 
that  the  mortgagor  shall  pay  the  notes  as  they  become  due, 
a  failure  to  pay  any  note  when  it  becomes  due  is  a  breach 
of  the  condition  and  entitles  the  holder  to  foreclose.*  But 
where  a  mortgage  has  been  given  to  secure  several  notes 
maturing  at  different  times,  which  provides  that  none  of 
them  shall  become  payable  and  that  the  mortgage  shall  not 
be  foreclosed  until  the  last  note  secured  becomes  due,  and 
some  of  the  notes  have  been  transferred  with  a  knowledge  of 
such  provisions  in  the  mortgage,  the  holders  of  such  trans- 
ferred notes  can  not  recover  a  judgment  thereon  until  the 
last  note  matures.*  In  such  a  suit  the  notes  and  the  mort- 
gage, having  been  contemporaneously  executed  and  both 
relating  to  the  same  subject  matter,  are  to  be  considered 
as  one  instrument.* 

§  49.  Where  mortgagee  holds  more  than  one  mortgage 
on  the  same  property  securing  different  debts.  — Where 
the  same  mortgagor  executes  to  the  same  mortgagee  two  or 
more  mortgages  upon  the  same  premises  to  secure  different 
debts,  the  mortgagee  will  not  be  permitted  to  commence 
separate  actions  to  foreclose  each  mortgage,  but  in  his  com- 
plaint to  foreclose  the  senior  mortgage  he  must  set  forth  all 
his  junior  incumbrances  and  ask  to  have  them  also  fore- 
closed.*    And    it  is  said   that   if   a   second   or   subsequent 


>  McLean  v.  Presley,  56  Ala.  211  » Brownlee  v.  Arnold,  60  Mo.  79 

(1876)  ;  Gibbons  v.  Hoag,  95  lU.  45,  (1875). 

63  (1880) ;  Fisher  v.  Milmine,  94  111.  *  Brownlee  v.  Arnold,  60  Mo.  79 

828  (1880) ;    Hunt  v.    Harding,    11  (1875).     See  also  Hanford  v.  Rogers, 

Ind.  245  (1858) ;  Lacoss  v.  Keegan,  11  Barb.  (N.  T.)  18  (1851) ;  Gammon 

2  Ind.  406  (1850) ;  Cecil  v.  Dynes,  2  v.   Freeman,    31    Me.    243   (1850) ; 

Ind.     266    (1850);     Greenman    v.  Hunt  v.  Frost,  58  Mass.  (4  Cusb.)  54 

Pattison,  8  Blackf.  (Ind.)  465  (1847).  (1849) ;  2  Pars.  Cont.  553. 

In  Indiana,  prior  to  tbe  statute  of  *  Roosevelt  v.  Ellitborp,  10  Paige 

1831,  a  bill  to  foreclose  where  the  Ch.  (N.  Y.)  415  (1843) ;  Hawkins  v. 

debt  was   payable  in  installments,  Hill,  15  Cal.  499  (1860) ;  s.  c.  76  Am. 

would  not  lie  until  the  day  for  the  Dec   499.     See  Homoeopathic  Mut. 

payment  of  the  last  installment  had  L.  Ins.  Co.  v.  Sixbury,  17  Hun  (N. 

passed.      See    Hough  v.    Doyle,  8  T.)  424  (1879). 
Blackf.  (Ind.)  300  (1846). 


§  50.]  INDEMNITY   MORTGAGE.  49 

mortgage  becomes  due  before  the  decree  is  entered  on  the 
senior  mortgage,  the  defendant  can  not  divide  the  action  as  to 
such  junior  mortgage  by  tendering  the  amount  due  on  the  first 
mortgage  after  the  maturity  of  the  second  mortgage.*  The 
supreme  court  of  Massachusetts  have  held  that  the  assignee 
of  two  mortgages  on  the  same  land,  executed  by  the  same 
mortgagor  at  different  times  to  different  mortgagees,  may 
unite  them  in  one  action  of  foreclosure  and  recover  thereon 
a  conditional  judgment,  specifying  the  amount  due  on  each 
and  directing  that  unless  both  mortgages  be  paid  within  a 
time  to  be  named  by  the  court,  the  plaintiff  shall  have 
execution.'  Yet  it  was  held  in  an  earlier  case  that  where 
the  same  person  had  two  different  mortgages  to  secure  two 
different  debts  against  the  same  mortgagor,  he  could  not 
unite  them  in  one  suit  under  the  Massachusetts  revised 
statutes,  so  as  to  recover  one  consolidated  conditional  judg- 
ment.* 

A  single  mortgage  given  to  secure  two  debts  may  be 
foreclosed  in  favor  of  both  creditors  at  the  same  time, 
because  such  a  foreclosure  does  not  unite  distinct  and  sep- 
arate claims  in  the  same  action.* 

§  50.  Indemnity  mortgage. — Where  a  mortgage  is  given 
as  an  indemnity,  and  contains  an  express  agreement  by 
the  mortgagor  to  pay  the  debt  therein  described,  and  to 
save  the  mortgagee  harmless  from  all  liability,  it  seems  that 
there  is  a  breach  of  such  agreement  when  there  is  a  failure 
to  make  the  payment  at  the  appointed  time,  and  that  the 
holder  of  such  mortgage  may  at  once,  without  having  first 
paid  the  debt  or  any  part  thereof,  maintain  an  action  for 
the  foreclosure  of  the  mortgage  and  may  recover  judgment 
therein  for  his  total  probable  loss.'     But  where  a  mortgage 


» Hawkins  v.   Hill,   15  Cal.  499  « Gilbert  v.  Wiman,  1  K  T.  550 

(1860);  s.  c.  76  Am.  Dec.  499.  (1848);   s.    c.    49    Am.    Dec.    359; 

»  Pierce  v.  Balkam,  56  Mass.  (2  Wright  v.  Whiting,  40  Barb.  (N.  T.) 

Cush.)  374  (1848).  235  (1863);  Thomas  v.  Allen,  1  Hill 

»  Peck  V.  Hapgood,  51  Mass.  (10  (N.  T.)  145  (1841),  overruling  Doug- 
Mete.)  172  (1845).  lass  v.  Clark,  14  Johns.  (N.  Y.)  177 

*  Chamberlin  v.  Beck,  68  Ga.  346  (1817);  Port  v.  Jackson,  17  Johns. 

(1883).  (N.  Y.)  239  (1819).    In  re  Negua,  7 


50 


rNDEJENTTY    OE    COLLATERAL   MOETGAGE. 


[§50. 


is  held  as  an  indemnity  simply,  without  such  a  clause  stipu- 
lating to  save  harmless  from  all  liability  the  mortgagee  or 
his  assignee  will  not  be  permitted  to  foreclose  until  he  has 
paid  the  obligation,  or  has  otherwise  been  injured.* 

Thus  where  a  surety  receives  a  mortgage  indemnifying  him 
against  all  loss,  cost,  or  damage,  the  condition  of  such  mort- 
gage will  not  be  broken  until  after  the  surety  has  been  obliged 
to  pay  the  debt'  or  some  part  of  it ;'  and  an  action  can  not  be 
maintained  to  foreclose  the  mortgage  until  such  breach.  But 
where  a  surety  has  been  obliged  to  pay  the  whole  or  a  part 
of  the  debt,  he  may  bring  an  action  to  foreclose  the  mort- 
gage before  the  amount  of  his  damages  has  been  ascertained 
by  a  suit  at  law.*  And  where  a  mortgage  is  given  to 
indemnify  one  against  damages  occasioned  by  the  neglect 
or  misconduct  of  the  mortgagor  or  other  person,  the  mort- 
gagee can  not  maintain  an  action  to  foreclose  such  mortgage 
until  after  a  judgment  has  been  recovered  for  such  negli- 
gence ;'  but  where  a  mortgage  was  given  as  an  indemnity  to 


"Wend.  (N.  Y.)  499  (1832);  Reynolds 
V.  Shirk,  98  Ind.  480  (1884).  See 
Malott  V.  Gofl,  96  Ind.  496  (1884); 
Loehr  v.  Colbom,  92  Ind.  24  (1883); 
Bodkin  v.  Merit,  86  Ind.  560  (1882); 
Durham  v.  Craig,  79  Ind.  117  (1881); 
Gunel  V.  Cue,  72  Ind.  34  (1880); 
South  Side  P.  M.  Ass'n.  v.  Cutler  & 
S.  Lumber  Co.,  64  Ind.  560  (1878); 
Devol  V.  Mcintosh,  23  Ind.  529 
(1864);  Johnson  v.  Britton,  23  Ind. 
105  (1865),  overruling  Tate  v.  Booe, 
9  Ind.  13  (1857);  Weddle  v.  Stone, 
12  Ind.  625  (1859);  Wilson  v.  Stil- 
well,  9  Ohio  St.  467  (1859);  s.  C.  75 
Am.  Dec.  477  ;  Holmes  v.  Rhodes,  1 
Bos.  &  P.  688  (1797);  Loosemore  v. 
Radford,  9  Mees.  &  W.  657  (1842); 
Hodgson  V.  BeU,  7  T.  R.  97  (1780). 
'  Ketchum  v.  Jauncey,  23  Conn. 
126  (1854);  Pond  v.  Clarke,  14  Conn. 
334  (1841);  Francis  v.  Porter,  7  Ind. 
213  (1855);  Lewis  v.  Richey,  5  Ind. 
152(1854);  Butler  v.  Ladue,  12  Mich. 
178  (1863);  National  State  Bank  v. 
Davis,  24  Ohio  St.  190,  195  (1873); 


Ohio  Life  Ins.  &  Trust  Co.  v. 
Reeder,  18  Ohio,  35.  46  (1849); 
McConnell  v.  Scott,  15  Ohio,  401 
(1846);  8.  o.  45  Am.  Dec.  583; 
Kramer  v.  Farmers'  &  Mechanics' 
Bank  of  Steubenville,  15  Ohio,  253 
(1846);  Colvin  v.  Buckle,  8  Mees.  & 
W.  680  (1840). 

*  See  Piatt  v.  Smith,  14  Johns. 
(N.  T.)  368  (1817);  PoweU  v.  Smith, 
8  Johns.  (N.  T.)  249  (1811);  Rodman 
V.  Hedden,  10  Wend.  (N.  Y.)  500 
(1833);  Pond  v.  Clarke,  14  Conn. 
334  (1841);  Shepard  v.  Shepard,  6 
Conn.  37  (1825);  McLean  v.  Rags- 
dale,  31  Miss.  701  (1856);  Colvin  v. 
Buckle,  8  Mees.  &  W.  680  (1840). 

'  Beckwith  v.  Windsor  Manul 
Co.,  14  Conn.  594  (1842). 

*  Rodgers  v.  Jones,  1  McC.  (S.  0.) 
Eq.  221  (1826). 

»  Grant  v.  Ludlow,  8  Ohio  St.  1 
(1857).  See  Tilford  v.  James,  1 B. 
Mon.  (Ky.)  337  (1847);  Planter's 
Bank  v.  Douglass,  2  Head  (Tenn.) 
699  (1859). 


§§51-52.]     AGEEmiENT  CHAI^GmG  MOETGAGE.  ft] 

secure  the  performance  of  an  executory  contract  running 
for  a  term  of  years,  and  the  mortgagors  became  insolvent, 
so  that  it  appeared  to  the  court  that  it  was  impossible  for 
them  to  fulfill  their  contract,  it  was  held  that  the  right  to 
foreclose  accrued  at  once/  An  indorser  for  accommodation, 
who  is  secured  upon  his  liability  by  a  collateral  mortgage, 
will  not  be  required  to  wait  until  after  the  notes  indorsed 
by  him  have  been  protested,  before  paying  them  and  com- 
mencing a  foreclosure,  where  the  makers  have  declined  to 
pay  them  and  have  informed  the  indorser  of  their  inability 
to  pay." 

Where  the  indemnifying  mortgage  deviates  in  the  least 
degree  from  a  simple  contract  to  indemnify  against  liability, 
even  when  indemnity  is  the  sole  object  of  the  contract,  and 
where,  in  consequence  of  the  primary  liability  of  other  per- 
sons, actual  loss  may  not  be  sustained,  the  mortgage  can  not 
be  foreclosed  for  its  face,  but  will  be  limited  to  actual  com- 
pensation for  probable  loss.* 

§  51.  Parol  agreement  as  to  time  of  payment. — While 
as  a  rule  the  plain  meaning  of  a  bond,  mortgage  or  other 
written  instrument  can  not  be  altered  or  varied  by  parol 
proof,*  yet  it  would  seem  that  where  it  is  made  to  appear 
that  it  was  the  oral  agreement  of  the  parties  at  the  time  of 
executing  a  note  or  bond  payable  on  demand,  which  was 
secured  by  mortgage,  that  the  claim  should  not  be  sued  nor 
the  mortgage  foreclosed  until  a  future  specified  time,  the 
statute  of  limitations  will  be  considered  as  commencing  to 
run  only  from  the  time  agreed  upon  for  payment.* 

§  52.  Agreement  not  to  enforce  mortgage. — An  agree- 
ment between  the  mortgagee  and  the  mortgagor  upon  a  valid 
consideration,  that  the  mortgage  shall  not  be  enforced,  will 


»  Harding   V.  Mill  River  Manuf.  (N.  T.)235(1863);  Loehrv.  Colborn, 

Co.,  34  Conn.  461  (1867.)  92  Ind.  24  (1883) ;  Weddle  v.  Stone, 

«  National    Bank    of    Newark  v.  12  Ind.  625  (1859). 

Davis,  24  Ohio  St.  190,  196  (1873).  ■•  Watson  v.  Hurt,  6  Gratt.  (Va.) 

»  Gunel  V.  Cue,  72  Ind.  34,  38,  39  633  (1850).    See  post  §  54. 

(1880).     See  Gilbert  v.  Wiman,    1  « Hale  v.  Anderson,  10  W.  Va. 

N.  Y.  550  (1848) ;  s.  c.  49  Am.  Dec.  145  (1877). 
859 ;  Wright  v.  Whiting,  40  Barb. 


52  AGKEEZylENT   NOT   TO   EISTORCE   MOETGAGE.      [§  52. 

estop  the  mortgagee  from  foreclosing.'  And  the  mortgagee 
may  be  estopped  from  foreclosing  even  without  a  positive 
agreement,  if  he  intentionally  leads  the  mortagagor  or  other 
person  similarly  interested  to  do  or  to  abstain  from  doing 
anything  involving  labor  or  the  expenditure  of  a  consider- 
able sum  of  money,  by  giving  him  to  understand  that  he 
would  be  relieved  from  the  burden  of  the  mortgage.' 

Thus  in  Burt  v.  Saxton,'  the  defendants  being  desirous  of 
purchasing  certain  lands  upon  which  the  plaintiff  held  a 
morto-age,  but  not  being  able  to  make  the  payments  at  the 
time  specified  in  such  mortgage,  applied  to  the  mortgagee 
who  agreed  by  parol  that  if  the  defendant  would  purchase 
the  premises,  pay  a  given  amount  the  ensuing  spring  and  the 
interest  on  the  sums  remaining  unpaid  annually  thereafter, 
and  would  put  upon  the  lands  certain  specified  improve- 
ments, he  would  extend  the  time  of  payment  of  the  mortgage 
for  twenty  years.  Under  this  agreement  the  defendant 
purchased  the  premises,  assuming  by  his  deed  the  payment 
of  the  mortgage  debt,  paid  the  sum  named  and  made  the 
specified  improvements,  but  failed  for  two  years  to  pay 
the  interest.  In  an  action  brought  to  foreclose  the  mort- 
gage, the  court  held  that  the  time  of  payment  was  extended 
by  the  verbal  contract,  and  that  there  was  no  default  in  the 
payment  of  the  principal ;  that  the  payment  of  the  interest 
annually  was  a  condition  which  the  defendant  must  perform, 
but  that  its  non-payment  was  not  such  a  breach  of  that 
condition  as  rendered  the  whole  principal  due. 


>  Faxton  v.  Faxton,  28  Mich.  159  13  Wis,  389  (1861) ;  Swain  v.  Sea- 

(1873) ;  Fausel  v.  Schabel,  22  N.  J.  mens,  76  U.  S.  (9  Wall.)  254  (1869) ; 

Eq.  (7  C.  E.  Gr.)  126  (1871).  bk.  19  L.  ed.  554 ;  Gregg  v.  Voa 

«  See  Faxton  v.  Faxton,  28  Mich.  Phul,  68  U.  S.  (1  Wall.)  274  (1863) ; 

159   (1873) ;    Harkness  v.  Toulmin,  bk.    17  L.   ed.   536  ;  Caimcross    v. 

25  ]\Iich.   80  (1872)  ;    Truesdail  v.  Lorimer,  7  Jur.  N.   S.  149  (1861) ; 

Ward,  24  Mich.  117,  134  (1871).  See  Parrott  v.  Palmer,  3  Myl.  &  K.  633 

also  Thompson  v.  Blanchard,  4  N.  Y.  (1834) ;  Nicholson  v.  Hooper,  4  Myl, 

303  (1850) ;  Skinner  v.  Dayton,  19  &  C.  179  (1838) ;  Duke  of  Leeds  v. 

Johns.  (N.  Y.)  513,  561  (1822)  ;  s.  C.  Earl  of  Amherst,  2  Phill.  117  (1846) ; 

10  Am.  Dec.  286  ;  Shafer  v.  Niver,  Raw  v.  Pote,  3  "Vern,  239  (1691). 
9  Mich.  253  (1861) ;  Calkins  v.  State,  « 1  Hun  (N.  Y.)  551  (1874). 


§  53.]  EXTEXSIOIT    OF   TIME   OF   PATJIENT.  53 

§  53.  Extension  of  time  of  payment. — An  agreement 
for  the  extension  of  the  time  for  the  payment  of  a  mort- 
gage, where  it  is  based  upon  a  valid  consideration,  suspends 
the  right  to  foreclose  the  mortgage  until  the  expiration  of  the 
time  to  which  payment  is  extended.*  If  the  agreement  for 
an  extension  of  time  is  without  consideration  it  will  be  void." 
The  court  say  in  an  Indiana  case  :*  "  We  think  that  the  facts 
stated  in  the  answer  showed  that  there  was  a  valid  agree- 
ment to  extend  the  time  of  payment  of  the  note,  and  that 
this  action  was  brought  in  violation  of  such  agreement. 
This  is  a  chancery  suit,  and  it  is  well  settled  that  courts 
of  chancery  will  not  enforce  a  contract  in  opposition  to 
an  agreement,  for  a  valuable  consideration,  to  give  an 
extension  of  time ;  to  do  so  would  be  against  conscience 
and  good  faith,  and  in  fraud  of  the  rights  of  the  appellants." 

To  constitute  a  valid  extension  of  time,  the  agreement 
must  be  based  on  a  valid  consideration,  a  mere  naked 
promise  not  being  sufficient.*  The  payment  of  legal 
interest  upon  a  note  in  advance  is  a  sufficient  consideration 


•  See  Newsam  v.  Finch,  25  Barb.  saker  v.  Mackerley,  9  N.  J.  Eq.  (1 

(N.  T.)  175  (1857) ;  Fellows  v.  Pren-  Stockt.)  440  (1853) ;  Union  Central 

tiss,  3  Den.  (N.  Y.)  513  (1846) ;  Burt  Life  Ins.  Co.  v.  Bonnell,  35  Ohio 

V.  Saxton,  1  Hun  (N.  Y.)  551  (1874);  St.  365(1880);  McComb  v.  Kittridge, 

Maher  v.  Lanfrom,  86  111.  513  (1877);  14  Ohio,  348  (1846) ;  Austin  v.  Dor- 

Flynn  v.  Mudd,  27  HI.  323  (1862) ;  win,   21    Vt.    38   (1848) ;    Creath'a 

"Warner   v.    Campbell,  26  111.   283  Adm'r  v.  Sims,  46  U.  S.  (5  How.) 

(1861);  Trayser  v.  Trustees  of  Indi-  192  (1847) ;  bk.  12  L.  ed.  111.   In  re 

ana  Asbury  University,  39  Ind.  556,  Beits,  4  Dill.  C.  C.  93  (1877);  Albert 

567  (1872) ;    Carlton  v.   Tardy,  28  v.  Grosvenor  Investment  Co.,  L.  R. 

Ind.  453  (1867) ;  Calvin  v.  Wiggam,  3  Q.  B.  123  (1867). 

27    Ind.    489   (1867) ;    Redman   v.  » See  Sharpe  v.   Amott,   51  Cal. 

Deputy,  26  Ind.  338  (1866) ;  Loomis  188  (1875) ;   Pendleton  v,  Rowe,  34 

V.   Donovan,    17    Ind.   198  (1861);  Cal.  149  (1867) ;  Massaker  v.  Mack- 

Dickcrson  V.  TheBoard,  &c.,6Ind.  erley,  9  N.  J.  Eq.  (1  Stockt.)  440 

128  (1855) ;  8.  c.  63  Am.  Dec.  373  ;  (1853). 

Harbert   v.    Dumont,    3   Ind.    346  *  Trayser  v.  Trustees  of  Indiana 

(1852) ;  Reed  v.  Home  Sav,  Bank,  Asbury  University,  39  Ind.  556,  567 

127  Mass.   295  (1879);    Fowler  v.  (1872). 

Brooks,  13  N.  H.  240  (1842) ;  Bailey  *  Gardner  v.  Watson,  13  III.  347 

V.   Adams,    10  N.    H.    162  (1839)  ;  (1851) ;    Massaker  v.   Mackerley,   9 

Tompkins  v.  Tompkins,  21  N.  J.  N.  J.  Eq.  (1  Stockt.)  440  (1853),' 
Eq.  (6  C.  E.  Gr.)  338  (1871) ;  Mas- 


54  EXTElSrSIOlf   OF   TIME   OF   PAYMENT.  [§  53. 

to  support  an  agreement  for  the  extension  of  the  time  of 
payment,'  but  the  prompt  payment  of  the  interest  on 
demand,  when  it  falls  due,  will  not  prolong  the  term  for  the 
payment  of  the  principal  beyond  the  time  specified  in  the 
note."  The  giving  of  additional  security,  by  a  person  not 
a  party  to  a  promissory  note,  is  a  valuable  consideration  for 
an  agreement  by  the  payee  to  extend  the  time  of  payment 
t)f  such  note,  and  is  available  as  a  defence  to  the  maker;* 
and  a  payment  on  a  note  before  it  becomes  due  is  a  sufficient 
consideration  to  support  an  agreement  between  the  holder 
and  the  maker  that  the  time  for  the  payment  of  the  balance 
of  the  note  shall  be  extended  for  a  specified  period.* 

Where  the  holder  of  a  mortgage  agreed  with  a  third  person 
that,  if  he  would  purchase  the  mortgagor's  equity  of  redemp- 
tion, and  pay  a  specified  sum  on  the  mortgage  indebtedness, 
he  would  extend  the  time  for  the  payment  of  the  mortgage 
debt  for  a  specified  term,  and  in  accordance  with  this  agree- 
ment the  equity  of  redemption  was  purchased  and  the 
amount  designated  paid,  it  was  held  that  this  was  a  sufficient 
consideration  to  support  the  contract  for  the  agreement  of 
extension,  and  that  the  right  to  foreclose  was  suspended 
until  the  expiration  of  the  time  for  which  it  was  agreed  that 
the  mortgage  should  be  extended.'  In  a  recent  case  in 
Massachusetts'  the  president  of  the  defendant  savings  bank 
executed  a  written  agreement,  by  the  terms  of  which  the 


>Maher  v.  Lanfrom,  86  111.  513,  Charlton  v.  Tardy,  28  Ind.  453(1867); 

617  (1877) ;  Flynn  v.  Mudd,  27  111.  Galvin  v.  Wiggan,  27  Ind.  489(1867); 

323  (1862);    Warner  v.    Campbell,  Redman    v.   Deputy,    26    Ind.   338 

26    m.    282    (1861);     Redman    v.  (1866) ;  Dickerson  v.  Board  of  Com. 

Deputy,  26  Ind.  338  (1866).  of  Ripley  Co.,  6  Ind.  128(1855); 

»  Pendleton  v.  Rowe,  34  Cal.  149  s.  c.  63  Am.  Dec.  373 ;  Harbert  v. 

(1867).  Dumont,  3  Ind.  346  (1852) ;  Fowler 

'Trayser  v.  Trustees  of  Indiana  v.    Brooks,    13  N.   H.   240  (1842); 

Asbury  University,  39  Ind.  556,  567  Bailey  v.    Adams,    10    K    H.    163 

(1872).  (1839);    McComb   v.   Kittridge,   14 

*  Newsam  v.  Finch,  25  Barb.  (N.  Ohio,  348  (1846) ;  Austin  v.  Dorwin, 

T.)  175  (1857).  21  Vt.  38  (1848) ;  Creath's  Adm'r  v. 

'  Loomia  v.  Donovan,  17  Ind.  198  Sims,  46  U.  S.  (5  How.)  192  (1847) 

(1861).      See    to    the    same    effect  bk.  12  L.  ed.  111. 
Fellows  V.  Prentiss,  3  Den.  (N.  Y.)  «  Reed  v.  Home  Savings  Bank,  127 

512  (1846)  ;  s.  c.  45  Am.   Dec.  484  ;  Muss.  295  (1879). 


§  54.]  EXTEITSIOH"   OF  TIME   BY   PAROL.  55 

bank,  in  consideration  of  a  certain  sum  paid  by  A,  on 
account  of  interest  due  from  B  on  a  mortgage  loan  upon  an 
estate  of  which  B  was  the  owner  in  fee,  and  of  a  promise 
that  the  taxes  for  the  previous  year  should  be  paid  by  either 
A  or  B,  agreed  to  extend  at  B's  request  for  five  months  the 
time  of  payment  of  the  interest  to  become  due  on  the  loan. 
Before  the  expiration  of  the  five  months,  the  bank  foreclosed 
the  mortgage  and  took  possession  of  the  estate  for  breach 
of  its  conditions.  The  taxes  referred  to  in  the  agree- 
ment were  not  paid  by  A  or  B.  In  an  action  subsequently 
brought  against  the  bank  by  A  on  the  agreement,  it 
was  held  that  whether  the  bank  was  bound  by  the  agree- 
ment or  not,  A  was  not  a  party  to  it,  and  that  he  could  not 
maintain  an  action  upon  it,  nor  recover  back,  under  a  count 
for  money  had  and  received,  the  amount  paid  by  him  for 
the  extension,  because,  under  the  circumstances,  the  law 
raised  no  implied  promise  to  repay  the  money.  In  a  New 
Jersey  case'  it  was  held  that  a  mortgagor  was  not  entitled  to 
any  benefit  from  an  agreement  between  the  mortgagee  and 
his  assignee,  extending  the  time  of  payment  in  consideration 
of  the  mortgagee's  guaranty  of  the  prompt  payment  of  the 
interest. 

§  54.  Extension  of  time  by  parol. — The  time  specified  for 
the  payment  of  a  mortgage  may  be  extended  by  parol,'  when 
the  agreement  is  founded  upon  a  sufficient  consideration.* 


'  Lee  V.    West   Jersey    Land   &  kins,  31  N.  J.  Eq,  (6  C.  E.  Gr.)  338 

Cranberry    Co.,    29  N.   J.   Eq.  (3  (1871);  Vanhouten  v.  McCarty,  4  N. 

6tew.)  377  (1878).  J.  Eq.  (3  H.  W.  Gr.)  141  (1842); 

*  Tompkins  v.  Tompkins,  21  K  King  v.   Morford,   1  N.  J.   Eq.   (1 

J.  Eq.  (6  C.  E.  Gr.)  338  (1871).    See  Saxt.)  274,  280  (1831) ;  Cox  v.  Ben- 

also  Flynn   v.    Mudd,   27  111.   323  net,  13  N.  J.  L.  (1  J.  S.  Gr.)  165, 

(1862).     See  Stevens  v.    Cooper,  1  171  (1832).    In  re  Betts,  4  Dill.  C.  C. 

Johns.   Ch.    (N.   Y.)  429  (1815);  93(1877);  s.  c.  7  Rep.  225. 

B.  c.  7  Am.    Dec.   499  ;    Lattimore  *  Dodge  v.  Crandall,  30  N.  T.  294 

V.   Harsen,   14  Johns.  (N.  Y.)  330  (1864);  Dearborn  v.  Cross,  7  Cow.  (N. 

(1817) ;  Fleming  v.  Gilbert,  3  Johns.  Y.)  48  (1827) ;  Townsend  v.  Empire 

(N.  Y.)  528  (1808)  ;  Covenhoven  v.  Stone  Dress.  Co.,  6  Duer  (N.  Y.)  208 

Seaman,  1  Johns.   Cas.  (N.  Y.)  23  (1856) ;  Fish  v.  Hayward,   28  Hun 

(1799);    Langworthy  v.   Smith,     2  (N.  Y.)  456(1882);   Lattimore  v. 

Wend.  (N.  Y.)  587  (1829)  ;  s.  c.  20  Harsen,  14  Johns.  (N.  Y.)  330(1817); 

Am.  Dec.  652  ;  Tompkins  v  Tomp-  Fleming  v.  Gilbert,  3  Johns.  (N.  T.) 


56 


EXTE:?rSION   OF   TEVIE   BY   PAROL. 


[§54. 


notwithstanding  the  fact  that,  as  a  general  rule,  parol 
evidence  is  inadmissible  to  supply,  vary,  enlarge,  or  contra- 
dict the  terms  of  a  written  instrument,'  especially  one  under 
seal,"  and  is  inadmissible  to  support  an  agreement  set  up  in 
contradiction  to  a  deed.*  In  Betts's  case*  the  United  States 
circuit  court  for  the  eastern  district  of  Missouri,  held  that  a 
mortgage  deed  or  deed  of  trust  is,  in  equity,  only  a  lien  on 
the  land,  and  that  an  agreement  to  extend  the  time  of 
payment  of  the  debt  thus  secured,  is  not  within  the  statute 
of  frauds  and  therefore  need  not  be  in  writing. 


528(1808);  Keating  v.  Price,  1  Johns. 
Cas.  (N.  Y.)  22  (1799) ;  Delacroix  v. 
Bulkley,  13  Wend.  (N.  Y.)  71  (1834), 
'  Stevens  v.  Cooper,  1  Johns.  Ch. 
(N.  Y.)  425  (1815) ;  s.  c.  7  Am.  Dec. 
499.  See  also  Hill  v.  Syracuse,  B. 
&  N.  Y.  R.  R.  Co.,  73  N.  Y.  351 
(1878) ;  VanBokkelen  v.  Taylor,  63 
N.  Y.  105  (1875) ;  Baker  v.  Higgins, 
21  N.  Y.  397  (1860)  ;  Brewster  v. 
Silence,  8  N.  Y.  207,  213  (1853); 
Cook  V.  Eaton.  16  Barb.  (N.  Y.)  439 
(1853) ;  Taylor  v.  Baldwin,  10  Barb. 
(N.  Y.)  586  (1850);  Egleston  v. 
Knickerbacker,  6  Barb.  (N.  Y.)  464 
(1849)  ;  Sayre  v.  Peck,  1  Barb.  (N. 
Y.)  464  (1847) ;  Pattison  v.  Hull.  9 
Cow.  (N.  Y.)  747,  754(1828) ;  Austin 
V.  Sawyer,  9  Cow.  (N.  Y.)  41  (1828) ; 
Wright  V.  Taylor,  1  Edw.  Ch.  (N. 
Y.)  226  (1831)  ;  Webb  v.  Rice,  6 
Hill  (N.  Y.)  219  (1843);  Hull  v. 
Adams.  1  Hill  (N.  Y.)  601  (1841) ; 
Meads  v.  Lan.singh,  1  Hopk.  Ch, 
(N.  Y.)  124,  134  (1824) ;  Bayard  v. 
:Malc<)lm,  1  Johns.  (N.  Y.)  453, 
467  (1806) ;  Mann  v.  Mann,  1  Johns. 
Ch.  (N.  Y.)  231  (1814) ;  Pjirkhurst 
V.  VanCortlandt,  1  Johns.  Ch.  (N. 
Y.)  274  (1814) ;  Crosier  v.  Acer.  7 
Paige  Ch.  (N.  Y.)  137  (1838) ;  Jarvis 
V.  I'almer,  11  Paige  Ch.  (N.  Y.)  650 


(1845) ;  Lowber  v.  LeRoy,  2  Sandf. 
(N.  Y.)  202  (1848) ;  Russell  v.  Kin- 
ney, 1  Sandf.  Ch.  (N.  Y.)  38  (1843) ; 
Evans  v.  Wells,  22  Wend.  (N.  Y.) 
324,  337  (1839) ;  Lee  v.  Evans,  8  Cal. 
424,  432  (1857) ;  Beckley  v.  Munson, 
22  Conn.  299  (1853) ;  Mann  v.  Smyser, 
76  m.  365  (1875) ;  Harlow  v.  Bos- 
well.  15  Dl.  56  (1853) ;  Cincinnati, 
U.  &  Ft.  W.  R.  R.  Co.  V.  Pearce, 
28  Ind.  502  (1867) ;  Pilmer  v.  State 
Bank,  16  Iowa,  321  (1864) ;  Jack  v. 
Naber,  15  Iowa,  450  (1863) ;  Peers  v. 
Davis,  29  Mo.  184  (1859) ;  Reed  v. 
Jones,  8  Wis.  392  (1859). 

*  Stevens  v.  Cooper,  1  Johns.  Ch. 
(N.  Y.)  425  (1815) ;  s.  c.  7  Am.  Dec 
499,  See  also  Austin  v.  Sawyer,  9 
Cow.  (K  Y.)  41  (1828) ;  Webb  v. 
Rice,  6  Hill  (K  Y.)  219  (1843); 
Evans  v.  Wells,  22  Wend  (N.  Y.) 
324,  339  (1839) ;  Powell  v.  Monson 
&  B.  Manuf.  Co.,  8  Mason  0  C.  358 
(1824). 

2  See  Meads  v.  Lansingh,  1  Hopk. 
Ch.  (N.  Y.)  124  (1824) ;  Movan  v. 
Hays,  1  Johns.  Ch.  (N.  T.)  339 
(1815) ;  Mann  v.  Mann,  1  Jo»ins.  Ch, 
(N.  Y.)  231  (1814) ;  Russell  v.  Kin- 
ney, 1  Sandf.  Ch.  (N.  Y.)  ?'^  (1843). 

*  4  Dill.  C.  C.  93  (1877)  8,  c  7 
Rep.  225. 


CHAPTER  IV. 


WHEN  RIGHT  OF  ACTION  BARRED. 


%  66.  Limitation  of  foreclosure  ac- 
tions. 

66.  Enforcing  statutes  of  limita- 

tion in  equity. 

67.  Adverse  possession  by  mort- 

gagor. 

68.  Presumption     arising     from 

mortgagor's  possession. 

69.  Presumption  as  to  payment — 

How  rebutted. 

60.  Adverse  possession  by  several 

successive  owners. 

61.  When  limitation  begins  to  run 

against  a  mortgage. 


§  62.  When  foreclosure   of   mort- 
gage barred. 

63.  Foreclosure  of  mortgage  when 

debt  barred. 

64.  Removal  of  bar  of  the  statute. 

65.  Rights     and     liabilities     of 

grantee  of  mortgagor. 

66.  Possession    by    mortgagee- 

Presumption  of  foreclosure. 

67.  Decree  for  deficiency  when 

debt  barred. 

68.  Right  of   mortgagee    to  re- 

tain possession  after  remedy 
barred. 


§  55.    Limitation  of  foreclosure  actions. — Civil  actions 

can  now  be  commenced  only  within  the  periods  designated 
by  the  Code/  which  provides  that  all  actions  upon  sealed 
instruments  must  be  commenced  within  twenty  years  after 
the  cause  of  action  has  accrued.'  An  action  to  foreclose  a 
mortgage  is  an  action  upon  a  sealed  instrument  within  the 
meaning  of  the  Code,  and  will  not  be  barred  until  twenty 
years  have  elapsed  from  the  time  the  mortgage  became  due 
and  payable,  or  from  the  date  of  the  last  payment  made 
upon  it.  Where  the  mortgagor  has  made  payments  upon 
the  mortgage  within  twenty  years  from  the  time  it  became 
due,  the  presumption  of  payment  declared  by  the  statute  to 
arise  after  the  lapse  of  twenty  years  from  the  date  when  the 
right  of  action  accrued,  is  not  available  as  a  defence  in  an 
action  of  foreclosure.* 

But  independent  of  written  law  there  is  a  period  after 
which,    upon  the  common  law  principles  from  which   the 


'  N.  T.  Code  Civ.  Proc.  §  380. 
»  N.  Y.  Code  av.  Proc.  §  381. 
•  New  York  Life  Ins.  &  Trust  Co. 
T.   Covert,  3  Abb.  Ct.  App.  Dec. 


(N.  Y.)  350  (1867) ;  s.  c.  3  Trans. 
App.  24  ;  6  Abb.  (N.  Y.)  Pr.  N.  8. 
154  ;  reversing  s.  0.  29  Barb.  (N.Y.) 
435. 


m 


58 


ETSTOECING    STATUTE   OF   LIMITATIONS. 


[§56. 


statutes  of  limitation  have  been  deduced,  a  demand  founded 
upon  a  note,  bond  or  judgment  becomes  irrecoverable.  It 
is  a  general  rule  that  forbearance  for  twenty  years  unex. 
plained,  unaccounted  for  and  unrebutted  will  extinguish  a 
judgment  as  well  as  all  other  pecuniary  demands.' 

§  56.  Enforcing  statutes  of  limitation  in  equity. — While 
statutes  of  limitation  are  as  a  general  rule  applicable  as  such 
only  in  proceedings  at  law,  yet  courts  of  equity,  acting  by 
analogy,  will,  in  proceedings  where  they  have  concurrent 
jurisdiction  with  courts  of  law,  apply  statutes  of  limitation 
and  refuse  to  grant  relief  where  it  appears  that  the  statutory 
period,  within  which  an  action  might  have  been  maintained 
at  law,  has  elapsed."  This  has  been  the  settled  rule  of 
decision   in   the    English   courts  of   chancery   for  the   last 


>  Gulick  V.  Loder,  13  N.  J.  L. 
(1  J.  S.  Gr.)  68  (1832) ;  s  C.  23  Am. 
Dec.  711.  See  also  Boardman  v. 
De  Forest,  5  Conn.  1  (1823) ;  Buchan- 
nan  v.  Rowland,  5  N.  J.  L.  (2  South.) 
72  (1820);  Cohen  v.  Thomson,  2 
Mills,  (S.  C.  Const.)  146  (1818) ; 
"Wells  V.  Washington,  6  Munf .  (Va.) 
632  (1820) ;  Ross  v.  Darby,  4  Munf. 
(Va.)  428  (1815);  Willaume  v. 
Gorges,  1  Campb.  217  (1808); 
Flower  v.  Bolingbroke,  1  Str.  639 
(1749). 

'  See  Kane  v.  Bloodgood,  7  Johns. 
Ch.  (N.  Y.)  90  (1823) ;  s.  c.  11  Am. 
Dec.  417  ;  Livingston  v.  Livingston, 
4  Johns.  Ch.  (N,  Y.)  287  (1820)- 
B.  C.  8  Am.  Dec.  562  ;  Morgan  v. 
Morgan,  10  Ga.  297  (1851) ;  Sloan  v. 
Graham,  85  III.  26  (1877);  Castner 
V.  Walrod,  83  111.  171  (1876) ;  Kane 
▼.  Herricgton,  50  111.  233.  539  (1869); 
Manning  v.  Warren,  17  111.  267 
(1855) ;  Clay  v.  Clay,  7  Bush.  (Ky.) 
95  (1870) ;  Bank  of  United  States  v. 
Dallam,  4  Dana  (Ky.)  574  (1836) ; 
Fenwick  v.  Macey,  1  Dana  (Ky.) 
876  (1833);    Thomas  v.    White,    3 


Litt.  (Ky.)  177  (1823);  Smith  v. 
Carney,  1  Litt.  (Ky.)  295  (1822); 
Ashley  v.  Denton,  1  Litt.  (Ky.)  86 
(1822) ;  Frame  v.  Kenny,  3  A.  K. 
Marsh  (Ky.)  145(1819) ;  s.  c.  12  Am. 
Dec.  367  ;  Breckenridge  v.  Churchill, 
3  J.  J.  Marsh  (Ky.)  12  (1829) ;  Brunk 
V.  Means,  11  B.  Mon.  (Ky.)  214 
(1850) ;  Rogers  v.  Moore,  9  B.  Mon. 
(Ky.)  401  (1849) ;  Ayres  v.  Waite, 
64  Mass.  (10  Cush.)  72  (1852) ;  Ayer 
V.  Stewart,  14  Minn.  97  (1869) 
McClane  v.  Shepherd,  21  N.  J.  Eq, 
(6  C.  E.  Gr.)  76  (1870);  Neely's 
Appeal,  85  Pa.  St.  387  (1877) 
Shelby  v.  Shelby,  Cooke  (Tenn. 
179  (1812) ;  8.  c.  5  Am.  Dec.  686 
Cocke  V.  McGinnis,  1  Mart.  &  Yerg, 
(Tenn.)  361  (1828);  s.  c.  17  Am, 
Dec.  809  ;  Pitzer  v.  Burns,  7  W.  Va, 
63,  69  (1873) ;  Carroll  v.  Green,  93 
U.  S.  (3  Otto)  509  (1875)  ;  bk.  23  L. 
ed.  738 ;  Wagner  v.  Baird,  48  U.  S. 
(7How.)234, 258(1849);  bk.  12  L.  ed. 
681;  Badger  v.  Badger,  2  Cliff.  C.  C. 
137  (1862);  Willis  v.  Robinson,  4 
Bligh,  101,  119  (1830). 


§56.] 


STATUTE    OF  LTMITATIOirS. 


59 


century  and  a  half.*  In  some  of  the  American  states  it  Is 
held  that  in  equity  the  lapse  of  time  operates  only  by  way 
of  evidence  as  affording  a  presumption  of  payment,"  but 
other  states  hold  that  courts  of  equity  are  bound  by  the 
statutes  of  limitation  as  much  as  courts  of  law;*  while  in 
California,*  Missouri,*  Nevada*  and  Oregon*  the  statutes  of 
limitation  are  expressly  made  applicable  to  all  suits  and 
actions. 

Thus,  following  the  analogy  of  the  statutes  of  limitation,  a 
debt  is  presumed  to  be  paid  after  the  lapse  of  twenty  years.' 
The  lapse  of  this  period  of  time  is  held  to  be  prima  facie 
evidence  of  payment ;  and  it  must,  it  seems,  be  so  accepted 
by  a  court  and  jury,  unless  there  is  other  evidence  to 
explain  the  delay  and  to  rebut  the  presumption.*     It  has 


'  See  Kane  v.  Bloodgood,  7  Johns. 
Ch.  (N.  Y.)  90  (1823)  ;  s.  c.  11  Am. 
Dec.  417 ;  Cocke  v.  McGinnis,  1 
Mart.  &  Yerg.  (Tenn.)  361  (1828) ; 
B.  c.  17  Am.  Dec.  809;  Sturt  v. 
Hellish,  2  Atk.  610  (1743) ;  Lockey 
V.  Lockey,  Prec.  Ch.  518  (1719); 
Hovenden  v.  Annesley,  2  Sch.  & 
Lef.  607  (1805),  a  leading  case  in 
•which  all  the  American  and  English 
cases  are  distinguished ;  overruling 
Coster  V.  Murray,  5  Johns.  Ch. 
(N.  Y.)  522  (1821) ;  Love  v.  "Watkms, 
40  Cal.  547  (1871). 

*  See  Livingston  v.  Livingston,  4 
Johns,  Ch.  (N.  Y.)  287  (1820) ;  8.  C. 
8  Am.  Dec.  562. 

•See  Shelby  v.  Shelby,  Cooke 
(Tenn.)  179  (1812) ;  s.  c.  5  Am.  Dec. 
686. 

*Love  V.  Watkins,  40  Cal.  547 
(1871)  ;  Boyd  v.  Blankman,  29  Cal. 
19  (1865) ;  Lord  v.  Morris,  18  Cal. 
484  (1861). 

6  Kelly  V.  Hurt,  61  Mo.  463  (1875). 

•White  V.  Sheldon,  4  Nev.  280 
(1868). 

'  Anderson  v.  Baxter,  4  Oreg.  105 
(1871);  Oregon  Code  Civ.  Proc. 
§378. 


•  Bailey  v.  Jackson,  16  Johns.  (N. 
Y.)  210  (1819);  8.  o.  8  Am.  Dec.  809; 
Livingston  v.  Livingston,  4  Johns. 
Ch.  (N.  Y.)  287  (1820);  8.  o.  8  Am. 
Dec.  562;  Swart  v.  Service,  21 
Wend.  (N.  Y.)  36  (1839);  8.  o.  84 
Am.  Dec.  211 ;  Ludlow  v.  Van 
Camp,  6  N.  J.  Eq.  (2  Halst.)  118 
(1823);  8.  0.  11  Am.  Dec.  539; 
Wanmaker  v.  VanBuskirk,  1  K. 
J.  Eq.  (1  Saxt.)  685  (1832);  8.  c.  38 
Am.  Dec.  748 ;  Gulick  v.  Loder,  8 
N.  J.  L.  (1  J.  S.  Gr.)  68  (1833);  s.  a 
23  Am.  Dec.  711 ;  Henderson  v. 
Lewis,  9  Serg.  &  R.  (Pa.)  379  (1823); 
8.  0.  11  Am.  Dec.  733 ;  Ordinary  v. 
Steedman,  Harp.  (S.  C.)  L.  287 
(1834);  s.  c.  18  Am.  Dec.  653 ;  Yar- 
nell  V.  Moore,  3  Coldw.  (Tenn.)  176 
(1866);  Carter  v.  Wolfe,  1  Heisk. 
(Tenn.)  700  (1870);  Anderson  v. 
Settle,  5  Sneed.  (Tenn.)  303  (1857); 
Atkinson  v.  Dance,  9  Yerg.  (Tenn.) 
424  (1836);  s.  c.  30  Am.  Dec.  433; 
Rogers  v.  Judd,  5  Vt.  336  (1833);  a 
c.  26  Am.  Dec.  301. 

»  Brock  V.  Savage,  31  Pa.  St.  410, 
422(1858);  King's  Ex'rs  v.  Coulder's 
Ex'rs,  2  Grant  Cas.  (Pa.)  77  (1853); 
Cope  V.  Humphreys,  14  Serg.  <fc  R. 


60  ADYEKSE    POSSESSION    BY   MOETGAGOR.  [§  57. 

been  held  that  the  lapse  of  even  a  less  number  of  years  than 
twenty  will  be  sufificient  to  raise  a  presumption  of  payment. 
Thus,  it  was  said  in  Henderson  v.  Lewis,*  that  a  pre- 
sumption of  the  payment  of  a  bond  may  be  raised  by  a  lapse 
of  less  than  the  statutory  period  of  twenty  years  when  taken 
in  connection  with  other  evidence,  but  that  in  the  absence  of 
other  circumstances,  the  full  statutory  period  must  expire  to 
raise  the  presumption."  And  in  another  case,'  the  court  say 
that  "  as  to  what  amount  of  time  alone,  divested  of  other 
circumstances,  shall  be  of  weight  sufificient  to  authorize  a 
jury  to  presume  payment,  unless  the  presumption  be 
rebutted,  is  necessarily  arbitrary  as  a  rule  and  based  upon 
grounds  of  public  policy.  Sixteen  years  having,  in  the  case 
referred  to,*  been  adopted,  and  society  having  acted  on  it  for 
many  years,  it  would  be  improper  we  think  to  question  the 
correctness  of  the  rule."* 

§  57.  Adverse  possession  by  mortgagor. — Uninterrupted 
possession  by  a  mortgagor  for  twenty  years  after  con- 
dition broken  without  entry  or  claim  by  the  mortgagee, 
raises  the  presumption  that  the  mortgage  has  been  paid,  and 
will   bar   the   right   of   the   mortgagee  to  foreclose.*     The 


(Pa.)  21  (1825);  Lesley  v.  Nones,  7  (1870) ;  Anderson  v.  Settle,  5  Sneed. 

Berg.  &  R.  (Pa.)  410  (1821);  Tilgh-  (Tenn.)  203  (1857). 

man  v.  Fisher,   9  Walts  (Pa.)  442  « Belmont  v.   O'Brien,  12  N.  T, 

(1840);  Bellas    v.   Lavan,    4  Watts  394  (1855) ;  Jackson  v.   Shauber,  7 

(Pa.)  297  (1835).  Cow.  (N.  Y.)  187,  198  (1827);  Jackson 

»  9  Serg.  &  R.  (Pa.)  379  (1823);  8.  v.  Wood,  12  Johns.  (N.  Y.)  245  (1815); 

C.  11  Am.  Dec.  733.  a  c.  7  Am.  Dec.  312 ;    Jackson  v. 

2  See  also  Lesley  v.  Nones,  7  Serg.  Pratt,  10  Johns.  (N.  Y.)  38  (1813) ; 

&  R.    (Pa.)  410    (1821);  Husky   v.  Collins  v.  Torry,  7  Johns.  (N.  Y.) 

Maples,  2  Coldw.  (Tenn.)  25  (1865);  278  (1810)  ;   s.  c.  5  Am.  Dec.  273 ; 

Leiper  v.  Erwin,  5  Yerg.  (Tenn.)  97  Giles  v.  Baremore,  5  Johns.  Ch.  (N. 

(1833).     Freeman    on    Judgments,  Y.)  550  (1821) ;   Haskell  v.  Bailey, 

||464,  465;  2  Greenl.  Ev.  §528.  22   Conn.    569    (1853);    Elkins    v. 

«  Atkins.  V.  Dance,  9  Yerg.  (Tenn.)  Edwards,  8  Ga.  326  (1850) ;  Harris 

424  (1836);  8.  c.  30  Am.  Dec.  422.  v.  Mills,  28  111.  46  (1862) ;  Chick  v. 

*  Blackburne     v.     Squib,     Peck  Rollins,  44  Me.  104  (1857) ;  Blethen 

(Tenn.)  64  (1823).  v.  Dwinal,  35  Me.  556  (1853) ;  Boyd 

'See    also    larneli    v.  Moore,   3  v.  Harris,  2  Md.  Ch.  Dec.  210(1849); 

Coldw.  (Tenn.)  176  (1866);  Carter  v.  Bacon  v.  Mclntire,  49  Mass.  (8  Mete.) 

Wolfe,   1   Hcisk.   (Teuu.)  694,   700  87  (1844) ;  Howland  v.  Shurtlefl,  43 


§  57.]  ADVERSE   POSSESSION".  61 

general  presumption,  however,  is  that  the  mortgagor  and  his 
grantees  hold  subordinate  to  the  mortgagee  unless  there  is 
some  act  on  the  part  of  the  mortgagor  or  his  grantees  showing 
affirmatively  that  the  possession  is  not  held  in  subordination 
to  the  mortgagee's  title,  and,  consequently,  until  this  is 
shown  the  bar  of  the  statute  of  limitations  will  not  begin  to 
run  in  favor  of  the  mortgagor  or  his  grantees.'  Recognition 
by  the  mortgagor  or  his  grantees  during  the  time  of  the 
existence  of  the  mortgage,  will  rebut  the  presumption  that 
the  mortgage  is  barred  even  as  to  subsequent  purchasers.* 

Possession  by  the  mortgagor  for  more  than  twenty  years 
is,  at  best,  but  presumptive  evidence  that  the  debt  has  been 
satisfied.*  The  possession  of  the  mortgagor  or  his  grantee, 
in  order  to  divest  the  mortgagee  of  his  right  to  foreclose, 
must  be  hostile  in  its  inception  and  must  continue  to  be 
hostile,  actual,  visible  and  open  ;*  because  so  long  as  the 
relation  of  mortgagor  and  mortgagee  continues,  the  statute 
can  not  commence  to  run  in  favor  of  the  mortgagor,  his  heirs 
or  assigns.'  The  possession  of  the  mortgagor,  being  consis- 
tent with  and  subject  to  the  rights  of  the  mortgagee  at  the 
inception  of  the  mortgage,  does  not   become  antagonistic 


Mass.  (2  Mete.)  26  (1840) ;  s.  c.  35  Eckert,  45  U.  S.  (4  How.)  295  (1846); 

Am.  Dec.  384 ;  Thayer  v.  Mann,  36  bk.  11  L.  ed,  983 ;  Hall  v.  Surtees, 

Mass.  (19  Pick.)  535  (1837) ;  Inches  5  B.  &  Aid.  687  (1827). 

▼.  Leonard,   12  Mass.   379   (1815) ;  •  Heyer  v.   Pruyn,  7  Paige  Ch. 

Nevitt  V.  Bacon,  32  Miss.  212,  226  (N.  T.)  465  (1839) ;  8.  c.  34  Am. 

(1856);    s.   c.   66    Am.    Dec.    609;  Dec.  355;    Drayton   v.    Marshall, 

Tripe  v.  Matey,  39  N.  H.  439  (1859);  Rice  (S.  C.)  Eq.  383,  384  (1839) ;  s.  o. 

Evans  v.  Huffman,    5  N.   J.    Eq.  33  Am.  Dec.  84 ;  Wright  v.  Eaves, 

(1  Halst.)  354  (1846);    Roberts   v.  10  Rich.    (S.   C.)  Eq.   682  (1858); 

Welch,  8   Ired.   (N.   C.)   Eq.    287  Hughes  v.   Edwards,   22  U.   S.  (9 

(1852) ;  Richmond  v.  Aiken,  25  Vt.  Wheat.)  489  (1824) ;  bk.  6  L.  ed.  143. 

334  (1853) ;  Hughes  v.  Edwards,  22  «  Cheever  v.  Perley,  93  Mass.  (11 

U.  S.  (9  Wheat.)  489  (1824) ;  bk.  6  L.  Allen)  584  (1866). 

ed.  141  ;  Trash  v.  White,  3  Bro.  Ch.  •*  Medley   v.   Elliott,   62   lU.  533 

288,  291  (1791) ;  Hillary  v.  Waller,  (1872) ;  Parker  v.  Banks,  79  N.  C. 

13  Ves.  265  (1806).  480  (1878) ;  Martin  v.  Jackson,  27 

»  Boyd  V.  Beck.  29  Ala.  703  (1857);  Pa.  St.  504  (1856). 

Noyes  v.   Sturdivant,   18  Me.   104  *  See  Rockwell  v.  Servant,  63  111. 

(1841) ;  Bacon  V.  Mclntire,  49  Mass.  424  (1872);   Jamison  v.  Perry,   88 

(8  Mete.)  87  (1844) ;  Tripe  v.  Marcy,  Iowa,  14  (1873). 
89    N.    H.    439    (1859);    Zeller    v. 


62         PEESmiPTION  FROM  MORTGAGOe's  POSSESSION.    [§  58. 

by  his  simple  neglect  or  refusal  to  pay  the  interest.  The 
mortgagor  or  his  grantee  must  commit  some  act  which 
amounts  to  a  refusal  to  recognize  the  mortgage,  or  there 
must  exist  some  other  circumstance  from  which  a  jury  will  be 
induced  to  find  the  fact  of  adverse  possession/  Yet  it  is 
held  that  the  mortgagor's  possession  is  to  be  termed  adverse 
in  law  after  a  breach  of  the  conditions  of  the  mortgage.' 

§  58.  Presumption  arising  from  mortgagor's  posses- 
sion.— It  has  sometimes  been  questioned  whether  the 
doctrine  of  presumption,  arising  from  the  lapse  of  time 
and  entire  neglect  to  take  any  measure  to  enforce  a  claim, 
can  properly  be  applied  to  the  case  of  a  mortgage  of  real 
estate  ;  and  in  some  of  the  earlier  English  cases  the  doctrine 
was  advanced  that  the  common  law  presumption  applicable 
to  bonds,  judgments  and  similar  instruments,  arising  from  a 
delay  of  twenty  years  in  enforcing  them,  did  not  apply 
to  the  case  of  a  mortgage,  because  in  such  a  case  the  legal 
estate  was  in  the  mortgagee  and  the  mortgagor  was  a  mere 
tenant  at  will,  his  possession  of  the  premises  being  in  theory 
the  possession  of  the  mortgagee.  But  this  doctrine  was 
early  repudiated  by  Lord  Thurlow'  and  by  the  Master  of  the 
Rolls*  in  very  strong  language,  and  it  has  not  since  been 
asserted  in  any  case  either  in  England  or  America.  It  is 
now  the  universal  doctrine  that  debts  secured  by  mortgages 
stand  on  the  same  footing  as  other  demands,  and  are  held 
to  be  defeated  by  the  same  presumptions  arising  from  lapse 
of  time  and  laches  on  the  part  of  the  mortgagee.* 

While  it  is  true  that  the  mortgagor  is  not  the  tenant  at 
will  of  the  mortgagee  in  any  such  sense  that  his  possession 


>  Jones  V.  Williams,  5  Ad.  &  El.  (N.  Y.)  245  (1815) ;  s.  c.  7  Am.  Dec. 

291  (1836) ;  Patridge  v.  Bere,  5  B.  &  315  ;  Jackson  v.   Pratt,   10  Johns. 

Aid.  604  (1822).  (K  T.)  382  (1813);  Collins  v.  Torry, 

*  Wilkinson  v.  Flowers,  37  IVCss.  7  Johns.  (N.  Y.)  278  (1810) ;  s.  c.  5 
579  (1859) ;  8.  c.  75  Am.  Dec.  78.  Am.  Dec.  273  ;  Giles  v.  Baremore, 

« Trash  v.  White,  3  Bro.  Ch.  289  5  Johns.   Ch.  (N.  Y.)  552  (1821) ; 

(1791).  Rowland  v.  Shurtleff,  43  Mass.  (8 

*  Christopher  v.  Sparke,  2  Jac.  Ss  Mete.)  26  (1840) ;  s.  c.  25  Am.  Dec 
Walk.  223  (1820).  844  ;  Inches  v.  Leonard,  13  Mass. 

»  See  Jackson  v.  Wood,  12  Johns.  379  (1815). 


§  58.]    PEESUMPTIOISr  FEOM  MOETGAGOE's  POSSESSION.        63 


can  not  become  adverse,  yet  while  the  mortgagor  acknow- 
ledges his  relation  to  the  mortgagee  by  paying  interest  and 
installments  of  the  debt,  his  possession  is  said  to  be  the 
possession  of  the  mortgagee.'  But  the  mortgagor  has  a 
right  to  convey  or  to  lease  the  mortgaged  premises  or  to  deal 
with  them  in  any  way  he  sees  fit  as  owner,  so  long  as  he 
does  not  impair  the  security,  without  thus  rendering  hii 
possession  hostile  to  that  of  the  mortgagee ;  and  the  con^ 
structive  possession  of  the  mortgagee  will  continue  until  the 
possession  of  the  mortgagor  or  his  grantee  is  in  actual  and 
open  hostility  to  that  of  the  mortgagee.* 

Although  the  doctrine  of  presumption,  arising  from  posses- 
sion by  the  mortgagor  for  more  than  twenty  years,  has  been 
frequently  applied  as  against  the  mortgage  debt,  and 
may  now  be  said  to  be  fully  established  everywhere,*  yet 
such  a  presumption  is  not  conclusive,  and  circumstances 
may  be  shown  sufficiently  strong  to  repel  the  presumption.* 


» See  Harris  v.  Mills,  28  111.  44 
(1863). 

«  Boyd  V.  Beck,  29  Ala.  703  (1857); 
Roberts  v.  Littlefleld,  48  Me.  61 
(1860)  ;  Chick  v.  RoUins.  44  Me.  104 
(1857);  Howland  v.  ShurtlefE,  43 
Mass.  (2  Mete.)  26  (1840) ;  s.  o.  85 
Am.  Dec.  884 ;  Inches  v.  Leonard, 
13  Mass.  379  (1815);  Benson  v. 
Stewart,  30  Miss.  49  (1855);  Sheaf e  v. 
Gerry,  18  N.  H.  245  (1846) ;  How- 
ard V.  Bildreth,  18  N.  H.  105  (1846)} 
Bates  V.  Conrow,  11  N.  J.  Eq.  (3 
Stockt.)  137  (1856) ;  Martin  v.  Jack- 
son, 27  Pa.  St.  504  (1856) ;  Drayton 
V.  MarshaU,  1  Rice  (S.  C.)  Eq.  383 
(1839) ;  Atkinson  v.  Patterson,  46 
Vt.  750  (1874) ;  Pitzer  v.  Burns,  7 
"W.  Ya.  63  (1873);  Higginson  v. 
Mein,  8  U.  S.  (4  Cr.)  415  (1808) ;  bk. 
2  L.  ed.  664  ;  Jones  v.  Williams,  5 
Ad.  &  E.  291  (1836) ;  s.  c.  6  Nev.  & 
M.  816  ;  Hall  v.  Surtes,  5  B.  &  Aid. 
687  (1822). 

•  Jackson  v.  Wood,  12  Johns.  (N. 
T.)  245  (1815);  Jackson  v.  Pratt,  10 


Johns.  (N.  T.)  382  (1813);  Collins  v. 
Torry,  7  Johns.  (N.  Y.)  278  (1810); 
Giles  V.  Baremore,  5  Johns.  Ch.  (N. 
Y.)  552  (1821);  Newcomb  v.  St. 
Peter's  Church,  2  Sandf.  Ch.  (N.  Y.) 
636  (1845);  McDonald  v.  Sims,  3  Ga. 
383  (1847);  Field  v.  Wilson,  6  B. 
Mon.  (Ky.)  479  (1846);  Bacon  v. 
Mclntire,  49  Mass.  (8  Mete.)  87 
(1844);  Howland  v.  Shurtleflf,  43 
Mass.  (2  Mete.)  26  (1840);  s.  c.  35 
Am,  Dec.  884;  Inches  v.  Leonard, 
12  Mass.  879  (1815);  Hoffman  v. 
Harrington,  83  Mich.  392  (1876); 
Reynolds  v.  Green,  10  Mich.  356 
(1862);  Wilkinson  v.  Flowers,  87 
Miss.  579  (1859);  Nevitt  v.  Bacon, 
82  Miss.  212  (1856);  McNair  v.  Lot, 
34  Mo.  285  (1863);  Martin  v.  Bowker, 
19  Yt.  526  (1847);  Hughes  v. 
Edwards,  22  U.  S,  (9  Wheat.)  489 
(1824);  bk.  6  L.  ed.  142. 

4  Moore  v.  Cable,  1  Johns.  Ch. 
(N.  Y.)  386  (1815);  Cheever  ▼. 
Perley,  93  Mass.  (11  Allen)  584 
(1866) ;  TVanmaker  v.  VanBuskirk, 


64        PRESTJMPTIOTT  FROM  MORTGAGOR'S  POSSESSION.    [  §58. 

This  presumption,  arising  from  the  policy  of  the  law,  does 
not  necessarily  proceed  on  the  belief  that  payment  has 
actually  been  made ;'  at  most,  the  lapse  of  time  and  the 
neglect  of  the  mortgagee  to  enforce  his  demand  against 
the  mortgagor,  and  the  continuance  of  the  latter  in  adverse 
possession,  are  grounds  for  a  presumption  of  fact  which  may 
authorize  a  jury  to  infer  the  payment  or  satisfaction  of  the 
mortgage,  and  for  that  reason  may  be  a  sufficient  answer 
in  an  action  of  foreclosure."  But  there  are  some  cases  which 
hold  that,  where  there  has  been  no  recognition  of  the 
mortgage  debt  for  a  period  less  than  the  statutory  period  of 
limitation,  such  possession  will  not  raise  a  presumption 
of  payment.' 

The  presumption  as  to  payment  by  an  adverse  possession 
of  twenty  years  may  be  rebutted  by  showing  a  payment  of 
interest,  a  promise  to  pay,  an  acknowledgment  of  the  debt 
by  the  mortgagor  or  some  similar  circumstance  ;*  but  in  such 
cases  parol  evidence,  in  order  to  rebut  the  presumption  as  to 
payment,  should  show  clearly  some  positive  act  within  that 
time,  which  is  an  unequivocal  recognition  of  the  debt.* 
There  must  be  a  part  payment*  or  a  positive  new  promise/  in 


1  N.  J.  Eq.  (1  Saxt.)  685  (1832) ;  (1879) ;  Coldcleugh  v.  Johnson,  84 

Booker  v.  Booker,  29  Gratt.  (Va.)  Ark.  312  (1879) ;  Locke  v.  Caldwell, 

605  (1877) ;  s.  c.  26  Am.  Rep.  401 ;  91  lU.  417(1879) ;  Murphy  v.  Coates, 

Hughes  V.  Edwards,   22  U.  S.   (9  33  N.  J.  Eq.   (6  Stew.)  424  (1881); 

Wheat.)  489  (1824) ;  bk  6  L.  ed.  142.  Snavely  v.  Pickle,  29  Gratt.  (Va.) 

1  Hillary  v.  Waller,  12  Ves.  239,  27  (1877) ;  Pears  v.  Laing,  L.  R.  13 

252  (1806).  Eq.  41  (1871). 

'  Jackson  v.  Wood,  12  Johns.  (N.  '  Jarvis  v.    Albro,    67   Me.    810 

Y.)  245  (1815)  ;  Jackson  v.  Pratt,  10  (1877). 

Johns.   (N.  Y.)  382  (1813) ;  ColUns  «  Schmucker  v.  Sibert,    18  Kan. 

V.   Torry,     7  Johns.   (N.   Y.)    278  104  (1877).     See  Pease  v.  Catlin,  1 

(1810) ;  Jackson  V.  Hudson,  3  Johns.  HI.  App.  88  (1878). 

(N.   Y.)  375   (1808) ;    Demarest   v.  An  acknowledgment  or  part  pay- 

Winkoop,  3  Johns.  Ch.  (N.  Y.)  135  ment  by  an  administrator  or  a  de- 

(1817) :  Chick  v.  Rollins,  44  Me.  104  mand  not  exhibited  as  required  by 

(1857) ;  Crook  v.  Glenn,  30  Md.  55  law  will  not  stop  the  running  of  the 

(1868) ;  Bacon  v.  Mclntire,  49  Mass.  statute  of  limitations.     Clawson  v. 

(8  Mete.)  87  (1844).  McCune,  20  Kan.  337  (1878). 

*  Boon  V.  Pierpont,  28  N.  J.  Eq.  ■>  Crone  v.  Citizen's  Bank  of  La.  28 

(1  Stew.)  7  (1877).  La.  An.  449  (1876). 

*Cook  V.   Parham,   63  Ala.  456 


§59.] 


PEESUMPTION   AS   TO   PAYMENT. 


65 


order  to  accomplish  this  purpose ;  a  mere  silent  acquiescence 
in  the  mortgagee's  demand  of  a  payment,  or  an  admission 
of  the  debt,  is  not  of  itself  sufficient  to  repel  the  presumption. 
A  new  promise,  to  take  the  case  out  of  the  statute,  need  not 
specify  the  amount  nor  the  time,  if  it  otherwise  indentifiesthe 
debt.  Thus  a  written  promise  to  renew  a  note  and  to  give 
a  new  mortgage,  whenever  the  exact  amount  due  shall  be 
ascertained,  amounts  to  an  equitable  renewal.* 

§  59.     Presumption  as  to  payment — How  rebutted. — 

The  presumption  of  payment,  arising  from  an  uninterrupted 
possession  by  the  mortgagor  for  twenty  years  after  condition 
broken,  may  be  rebutted^  by  circumstances  explaining  the 
delay,  as  by  showing  that  the  plaintiff  was  ignorant  of  the 
defendant's  residence,*  or  that  the  plaintiff  being  an  alien 
had  been  prevented  from  suing  by  the  existence  of  war,*  or 
by  showing  that  the  parties  resided  in  a  country  whose 
commercial    relations   were   disturbed   by  the   presence  of 


>  Hartv.  Boyt,  54  Miss.  547  (1877). 

*  Bailey  v.  Jackson,  16  Jotins.  (N. 
Y.)  210  (1819) ;  a  c.  8  Am.  Dec. 
809  ;  Cheever  v.  Parley,  93  Mass. 
(11  Allen)  584,  588  (1832) ;  Creighton 
V.  Proctor,  66  Mass.  (12  Cush.)  437 
(1853;  ;  Ayres  v  Waite,  64  Mas3. 
(10  Cush.)  76  (1852) ;  Howland  v. 
Shartlefl,  43  Mass.  (3  Mete.)  26 
(1840) ;  8.  c.  35  Am.  Dec.  384. 

'  Bailey  v.  Jackson,  16  Johns. 
(N.  T.)  210  (1819) ;  B.  c.  8  Am.  Dec. 
809. 

*  As  to  when  a  debt  or  other  lia- 
bility will  be  presumed  to  be  paid  or 
discharged,  see  in  addition  to  cases 
already  cited  in  the  foregoing  notes : 
Central  Bank  of  Troy  v.  Heydorn, 
48  N.  Y.  260,  272  (1872) ;  Lynde  v. 
Denison,  3  Conn.  392  (1820) ;  Tripe 
V.  Marcy,  39  N.  H.  439,  449  (1859) ; 
Thorpe  v.  Corwin,  20  N.  J.  L.  (1 
Spen.)  317  (1844) ;  Allen  v.  Everly, 
24  Ohio  St.  Ill  (1873) ;  Foulk  v. 
Brown,  2  Watts  (Pa.)  215  (1834) ; 
Gwyn  V.  Porter,  5  Heisk,  (Tenn.) 


253  (1871) ;  Brobst  v.  Brock,  77  U. 
S.  (10  Wall.)  519,  535  (1870) ;  bk.  19 
L.  cd.  1002. 

But  it  must  be  remembered  that 
there  is  a  manifest  difference  be- 
tween those  cases  where  length  of 
time  operates  as  a  bar  to  an  action, 
and  those  in  which  it  can  be  used 
only  as  matter  of  evidence.  For  in 
the  former  cases  it  may  be  pleaded 
in  bar  and  is  conclusive,  though  the 
debt  be  not  paid  ;  but  in  the  latter 
cases  being  merely  evidence,  it  only 
raises  a  presumptive  fact,  which 
may  be  repelled  by  other  circum- 
stances to  be  considered  in  arriving 
at  the  truth.  Bailey  v.  Jackson,  16 
Johns.  (N.  Y.)  210  (1819) ;  s.  c.  8 
Am.  Dec.  309  ;  Shields  v.  Pringle, 
2  Bibb.  (Ky.)  387  (1811) ;  Howland 
V.  Shurtleff,  43  Mass.  (2  Mete.)  28 
(1840) ;  Allen  v.  Everly,  24  Ohio  St. 
Ill  (1873);  Bissell  v.  Jaudon,  16 
Ohio  St.  498  (1866);  Brobst  v.  Brock, 
77  U.  S.  (10  Wall.)  519,  535  (1870)  ; 
bk.  19  L.  ed. 1002. 
(5) 


66  ADVEESE   POSSESSION".  [§  60. 

hostile  armies,'  or  by  showing  any  other  circumstances  which 
raise  an  improbability  of  payment  or  discharge,"  as  well  as  by 
an  express  acknowledgment  of  the  debt  or  by  acts  recogniz- 
ing it.  Thus  also  relationship  between  the  parties  will  repel 
the  presumption  arising  from  the  lapse  of  time,  that  there  is 
no  debt, — especially  where  the  exaction  of  payment  might 
have  occasioned  distress.*  And  in  some  states  it  is  held  that 
where  the  statutory  period  expires  after  the  death  of  the 
debtor,  an  action  may,  under  the  statute,  be  commenced 
against  his  administrator,  if  brought  within  eighteen  months 
after  the  decedent's  death  ;*  but  in  no  case  will  the  provi- 
sions of  the  statute  of  limitations  be  suspended  until  after 
administration,  where  it  began  to  run  against  the  decedent 
in  his  life-time,  if  the  administrator  could  have  taken  out 
letters  and  sued  earlier.' 

When  the  statute  of  limitations  has  once  commenced  to 
run,  its  operation  will  not  be  suspended  by  any  subsequent 
disability.* 

§  60.  Adverse  possession  by  several  successive 
owners. —  Adverse  possession  may  be  held  by  several 
successive  owners.  It  is  not  necessary  that  the  possession 
should  continue  for  twenty  years  in  the  same  person.  If 
the  time  embraced  by  two  or  more  possessions  amounts  to  the 
period  prescribed  by  the  statute  as  a  bar,  it  will  be  competent 


'  Hale  V.  Pack,  10  "W.  Va.  145  C.)  L.  185  (1824) ;  8.  0. 18  Am.  Dec. 

(1877).  647. 

«  Suavely  v.  Pickle,  29  Gratt.  (Va.)  '  Demarest  v.  Wj^nkoop,  8  Johns. 

27  (1877)  ;  Brobst  v.  Brock,  77  U.  Ch.  (N.  Y.)  129  (1817) ;  s.  o.  8  Am. 

S    (10  Wall.)  535  (1870) ;  bk.  19  L.  ^^ec.   467  ;   Jackson  v.   Moore,   13 

ed.  1002.  Jo^s-  (N.  T.)  513  (1816);  8.  0.  7 

»  Wanmaker  v.  VanBuskirk,  1  N.  '^"-    ^«<^-    ^^^  '    ^"^'^  -^^rn'r  v. 

J.  Eq.  (1  Saxt.)  685  (1832) ;  b.  0.  23  ^'^'  "^  H^^'  &  J-  (^d.)  14  (1826)  ; 

Am.  Dec.  748  ;  Leman  v.  Newnham.  «•  ^'  ^^  ^™-  I^^c.  290  ;  Thompson 

1  Vcs.  sr.  51  (1747).  '^-  S™^^^'  "^  ^erg.  &  R.  (Pa.)  209 

*  See  Wenman  v.  Mohawk  Ins.  (^^^1)5  «•  °-  ^^^^-  '^^'  453;  Adam- 
Cc.  13  Wend.  (N.  Y.)  267  (1835);  ^°^  ,T;?„T*^'  2  Mill  (S.  0.  Const.) 
B.   ;  28  Am.  Dec.  464.     See  al  o  267  (1818) ;  a  c   12  Am.  Dec.  665; 

T,  J       -.   -n    J*    /TVT   -o- %  Paysoux  V.  Prather,  1  Nott.  «&  McO. 

Fla-  V.   Ruden,  1  Bradf.  (N.  Y.)  (g  c.)  296  (1818);  8.  c.  9  Am.  Dec 

190    (1H50);     Scovil  v.   Scovil,    80  691  ;  Fitzhugh  v.  Anderson,  2  Hen. 

How.  (N.  Y.)  Pr.  262  (1865).  &  Munf.  (Va.)  289  (1808)  ;   8.  0.  8 

*  I^icks  V.  Martindale,  1  Harp.  (S.  Am.  Dec.  625. 


§  61.]  WHEN   LIMITATION   COIVIMENCES.  67 

to  join  the  one  adverse  possession  to  the  others,  in  order  to 
make  the  bar  effectual ;  for  it  is  immaterial  whether  the 
possession  be  held  for  the  entire  period  by  one  party  or  by 
several  parties  in  succession,  each  holding  part  of  the  time, 
and  all  together  holding  the  entire  period,  provided  the 
possession  be  continued  and  uninterrupted,  and  adverse  to 
the  claim  of  the  plaintiff,  during  the  whole  period.  But  if 
a  period  of  time  intervenes  in  which  the  possession  is  not 
adverse,  the  statute  will  only  run  from  the  commencement 
of  the  last  adverse  possession.' 

§  6i.  When  limitation  begins  to  run  against  a  mort- 
gage.— The  statute  of  limitations  begins  to  run  against  a 
mortgage  as  soon  as  the  right  to  foreclose  it  accrues,  and  not 
from  the  date  or  the  delivery  of  the  mortgage;'  the  time  which 
would  bar  an  action  at  law  to  recover  possession  of  the 
mortgaged  property,  after  condition  broken,  will  in  general 
bar  an  action  in  equity  to  foreclose  the  mortgage.*  Gen- 
erally the  right  of  action  to  foreclose  a  mortgage  accrues 
upon  the  forfeiture  of  the  condition  of  the  mortgage,  and 
from  this  date  the  statute  of  limitations  begins  to  run.* 
The  condition  of  the  mortgage  having  been  forfeited,  the 
mortgagor  holds  from  that  time  subject  to  the  rights  of 
the  mortgagee  to  foreclose ;  and  if  the  latter  sleeps  upon  his 
rights  for  the  length  of  time  fixed  by  the  statute  of 
limitations  for  barring  an  action  for  the  recovery  of  the 
possession  of  the  mortgaged  premises,  his  rights  will  be 
lost.* 

The  absence  from  the  state  of  the  mortgagor  or  any  one 
liable  for  the  mortgage  debt,  will  not  prevent  the  statute  of 


*  Benson  v.  Stewart,  00  Miss.  49,  *  Wilkinson  v.  Flowers,  37  Miss. 

67   (1855).      See   also    Emory   v.  579  (1859) ;  s.  c.  75  Am.  Dec.  78. 

Keighan,  88  111.  482  (1878).  »  Jackson  v.  Wood,  12  Johns.  (N. 

«  Prouty  V.  Eaton,  41  Barb.  (N.  T.)  242  (1815) ;  s.  c.  7  Am.  Dec. 

T.)  409  (1863).  315  ;  Wilkinson  v.  Flowers,  37  Miss. 

«  Wilkinson  v.  Flowers,  37  Miss.  579  (1859) ;  s.  c.  75  Am.  Dec.  78 ; 

679  (1859) ;  s.  c.  75  Am.  Dec.  78 ;  Nevitt  v.  Bacon,  32  Miss.  212,  227 

Nevittv.  Bacon,  32  Miss.  212  (1856);  (1856);    s.   c.   66    Am.    Dec.    609; 

s.  c.  66  Am.  Dec.   609 ;  Benson  v.  Benson   v.    Stewart,    30   Miss.    49 

Stewart,  30  Miss.  49  (1855).  (1855) ;  4  Kent  Com.  403. 


68  WHEN   MOKTGAGE   BARRED.  [^  62. 

limitations  from  running  against  the  mortgagee's  right  to 
foreclose.  Limitations  in  equity  act  only  by  analogy  to  the 
rules  of  law ;  and  a  suit  for  foreclosure  being,  in  effect,  a 
proceeding  in  rem,  there  is  no  analogy  in  the  application  of 
the  statute  of  limitations  to  such  proceedings,  so  far  as  the 
effect  of  the  defendant's  absence  from  the  state  upon  the 
running  of  the  statute  is  concerned.* 

Where  the  mortgage  debt  is  payable  in  installments  falling 
due  at  different  times,  the  condition  of  the  mortgage  is  a 
continuing  one,  and  the  mortgagee  may  await  the  maturity 
of  the  last  note  or  installment  before  an  entry  and  sale,  or 
before  treating  the  non-payment  of  the  first  installment  as 
a  forfeiture  of  the  mortgage.  And  in  such  cases  the 
mortgagor's  possession  will  not  be  adverse  to  that  of 
the  mortgagee  until  the  maturity  of  the  last  installment; 
for  it  is  not  until  that  date  that  the  final  breach  of  the 
condition  of  the  mortgage  occurs.* 

§  62.    When  foreclosure   of  mortgage    barred. — The 

right  to  foreclose  a  mortgage  is  not  barred  by  the  same 
lapse  of  time  which  bars  an  action  upon  a  note  secured  by 
a  mortgage ;'  but  it  will  be  barred  by  that  lapse  of  time 
which  would  bar  an  action  for  the  recovery  of  the  mort- 
gaged premises.*  Uninterrupted  possession  for  the  period 
of  twenty  years  after  condition  broken,  without  any  payment 
or  demand  of  principal  or  interest,*  or  any  claim  on  the  part 


'  Anderson  v.  Baxter,  4  Org.  105  315;  Wilkinson  v.  Flowers,  37  Miss. 

(1871).  579  (1859) ;  s.  c.  75  Am.  Dec.  78 ; 

2  Parker  v.  Banks,  79  N.  C.  480  Nevitt  v.  Bacon,  32  Miss.  212,  227 
(1878).  (1856) ;  s.  c.  66  Am.  Dec.  609  ;  Ben- 

3  Nevitt  V.   Bacon,  32  Miss.    212  son  v.  Stewart,  30  Miss.   49  (1855) ; 
(1856)  ;    s.    c.    66   Am.    Dec.    609 ;  4  Kent  Com.  402. 

Trotter  v.  Erwin.  27 Miss.  772  (1854);  »  Barned  v.  Earned,  21  N.  J.  Eq. 

Bush  V.  Cooper,  26  Miss.  611  (1853) ;  (6  C.  E.  Gr.)  245  (1870) ;  Hayes  v. 

8.  c.   59  Am.   Dec.   270 ;  Miller  v.  Whitall,  13  N.  J.  Eq.  (2  Beas.)  242 

Trustees  of  Jefferson   College,    13  (1861) ;  Wanmaker  v.  VanBuskirk, 

Miss.  (5  Smed.   &  M.)  651  (1846) ;  1   N.   J.   Eq.  (1   Saxt.)  685  (1832) ; 

IVIiller  V.  Helm.  10  Miss.  (2  Smed  &  s.  c.   23  Am.   Dec.   748  ;    Evans  v. 

M.)  687,  697  (1843).  Huffman,  5  N.  J.  Eq.  (1  Halst.)  360 

<  Jackson    v.    Wood,    12    Johns.  (1846). 
(N.  Y.)  242  (1815) ;  B.  c.  7  Am.  Dec. 


§62.] 


WHEW   MORTGAGE   BAREED. 


69 


of  the  mortgagee,  raises  the  presumption  that  the  mortgage 
debt  has  been  paid,'  and,  in  the  absence  of  circumstances 
excusing  the  delay,  bars  the  right  of  the  mortgagee  to  fore- 
close his  mortgage.'  But  it  has  been  said  that  no  presump- 
tion of  the  payment  of  the  mortgage  will  be  raised  from  the 
lapse  of  a  less  period  ;'  and  this  is  particularly  true  where  for 
a  part  of  the  time  the  business  of  the  courts  and  the  com- 
mercial intercourse  of  the  country  are  interrupted  by  war.* 


'  Harrington  v.  Slade,  22  Barb. 
(N.  T.)  161  (1856) ;  Bailey  v.  Jack- 
son, 16  Johns.  (N.  Y.)  210  (1819) ; 
8.  c.  8  Am.  Dec.  309  ;  Giles  v.  Bare- 
more,  5  Johns.  Ch.  (N.  Y.)  545 
(1821) ;  Livingston  v.  Livingston,  4 
Johns.  Ch.  (N.  Y.)  287  (1820)  ;  s.  c. 
8  Am.  Dec.  562  ;  Heyer  v.  Pniyn,  7 
Paige  Ch.  (N.  Y.)  465  (1839) ;  s.  c.  84 
Am.  Dec.  355  ;  Swart  v.  Service,  21 
Wend.  (N.  Y.)  36  (1839) ;  b.  c.  34 
Am.  Dec.  211  ;  Perkins  v.  Cartmell, 
4  Harr.  (Del.)  275  (1843) ;  Records 
V.  Melson,  1  Houst.  (Del.)  139  (1855) ; 
VanDuyn  v.  Hepner,  45  Ind.  589 
(1874) :  Jarvis  v.  Albro.  67  Me.  310 
(1877) ;  Baltimore  &  O.  R.  R.  Co. 
V.  Trimble,  51  Md.  99  (1879); 
Cheever  v,  Perley,  93  Mass.  (11 
Allen)  584  (1866) ;  Creighton  v.  Proc- 
tor, 66  Mass.  (12  Cush.)  437 
(1853) :  Ayres  v.  Waite,  64  Mass. 
(10  Cush.)  76  (1852);  Bacon  v. 
Mclntire,  49  Mass.  (8  Mete.)  87 
(1844);  Hovrland  v.  Shurtleff,  43 
Mass.  (2  Mete.)  26  (1840)  ;  s.  c.  35 
Am.  Dec.  384  ;  Sheafe  v.  Gerry,  18 
N.  H.  245  (1846) ;  Howard  v.  Hil- 
dreth,  18  N.  H.  105  (1846) ;  Downs 
V.  Sooy,  28  N.  J.  Eq.  (1  Stew.)  55 
(1877) ;  Earned  v.  Barned,  21  N.  J. 
Eq.  (6  C.  E.  Gr.)  245  (1870)  ;  Hayes 
V.  Whitall,  13  N.  J.  Eq.  (3  Beas.) 
242  (1861) ;  Wanmaker  v.  VanBus- 
kirk,  1  N.  J.  Eq.  (1  Saxt.)  685 
(1832) ;  8.  c.  23  Am.  Dec.  748 ; 
Evans  v.   Huffman,  5   N.    J.  Eq. 


(1  Halst.)360  (1846) ;  Todd's  Appeal, 
24  Pa.  St.  429  (1855);  Bank  of 
United  States  v.  Biddle,  2  Pars. 
Cas.  (Pa.)  31  ;  Drayton  v.  Marshall, 
Rice  (S.  C.)  Eq.  373  (1839) ;  s.  c.  33 
Am.  Dec.  84 ;  Atkinson  v.  Dance, 
9  Yerg.  (Tenn.)  424  (1836) ;  8.  c.  30 
Am.  Dec.  422 ;  Booker  v.  Booker, 
29  Gratt.  (Va.)  605  (1877) ;  s.  o.  26 
Am.  Rep.  401  ;  Whipple  v.  Barnes, 
21  Wis.  327  (1867);  Hughes  v. 
Edwards,  22  U.  S.  (9  Wheat.)  489 
(1824) ;  bk.  6  L.  ed.  142 ;  N.  Y. 
Code  Civ.  Proc.  §§  365,  379. 

«  Belmont  v.  O'Brien,  12  N.  Y. 
394  (1855) ;  Jackson  v.  Wood,  12 
Johns.  (N.  Y.)  242  (1815) ;  Jackson 
V.  DeLancey,  11  Johns.  (N.  Y.)  365 
(1814) :  s.  c.  13  Johns.  (N.  Y.)  537 
(1816) ;  Jackson  v.  Pierce,  10  Johns. 
(N.  Y.)  415(1813) ;  Collins  v.  Tony, 
7  Johns.  (N.  Y.)  278  (1810) ;  Jack- 
son V.  Hudson,  3  Johns.  (N.  Y.)  375 
(1808) ;  Giles  v.  Baremore.  5  Johns. 
Ch.  (N.  Y.)  545  (1821) ;  Dunham  v. 
Minard,  4  Paige  Ch.  (N.  Y.)  441 
(1834) ;  Chick  v.  Rollins,  44  Me.  104 
(1857) ;  Blethen  v.  Dwinal,  35  Me. 
556  (1853) ;  Cheever  v.  Perley,  93 
Mass.  (11  Allen)  584  (1866) ;  Gould 
v.  White,  26  N.  H.  178  (1852); 
Evans  v.  Hoffman,  5  N.  J.  Eq. 
(1  Halst.)  354  (1846). 

3  Boon  V.  Pierpont,  28  N.  J.  Eq. 
(1  Stew.)  7  (1877). 

*  Montgomery  v.  Bruere,  4  N.  J. 
L.  (1  South.)  266  a818). 


70 


WHEN   DEBT   ALONE   BAEEED. 


[§63. 


§  63.    Foreclosure  of  mortgage  when  debt  barred.— 

While  the  lapse  of  time  may  afford  presumptive  evidence  of 
the  payment  of  a  mortgage  and  bar  a  right  to  foreclose,'  yet 
such  presumption  will  not  arise,  and  an  action  to  foreclose 
a  mortgage  will  not  be  barred  by  the  same  lapse  of  time, 
which  bars  an  action  upon  a  note  secured  by  the  mortgage ;" 
but  the  right  to  foreclose  will  be  barred  by  the  same  lapse  of 
time  only  that  would  bar  an  action  for  the  recovery  of  the  pos- 
session of  the  mortgaged  premises.*  Thus,  it  is  generally  held 
that  uninterrupted  possession  by  the  mortgagor  for  twenty 
years,  after  condition  broken,  without  entry  or  claim  on  the 
part  of  the  mortgagee,  where  such  delay  is  not  explained, 
will  bar  the  right  to  foreclose  the  mortgage.*  The  running 
of  the  statute  of  limitations  against  a  note  secured  by  mort- 
gage, or  other  lien,  raises  no  presumption  of  payment  so  as  to 
cut  off  the  lien,  and  such  mortgage  or  pledge  may  be  resorted 
to  in  equity,  notwithstanding  the  fact  that  the  remedy  on  the 
note  is  barred ;"  consequently  a  mortgage  may  be  foreclosed 


»  Swart  V.  Service,  21  Wend.  (N. 
T.)  36  (1839) ;  s.  c.  34  AtQ.  Dec.  211 ; 
Wanmiiker  v.  VanBuskirk.  1  N.  J. 
Eq.  (1  Saxt.)  685  (1833) ;  8.  C.  23  Am. 
Dec.  748. 

«  Green  v.   Gaston,  56  Miss.  751 
(1879)  ;   Wilkinson  v.  Flowers,    37 
Miss.  579  (1859) ;  s.  c.  75  Am.  Dec. 
78 ;  Nevitt  v.  Bacon,  33  Miss.  212 
(1856):    s.   c.    G6   Am.   Dec.    609 
Trotter  v.  Irwin,  37  Miss.  772  (1854) 
Bush  V.  Cooper,  26  Miss.  611  (1853) 
s.  0.  59  Am.  Dec.    270  ;    Miller  v 
Trustees    of    Jefferson  College,   13 
Miss.   (5Smed.   &  M.)  651   (1846); 
Miller  v.  Helm,  10  Miss.  (3  Smed.  & 
M.)  697  (1843). 

3  Jackson  v.  Wood,  12  Johns.  (N. 
y.)  242  (1815)  ;  8.  0.  7  Am.  Dec. 
815  ;  Wilkinson  v.  Flowers,  37  Miss. 
679  (1859) ;  s.  c.  75  Am.  Dec.  78  ; 
Nevitt  V.  Bacon.  32  Miss.  212,  217 
(.1856) ;    s.   c.    66    Am.    Dec.   609 ; 


Benson   v.    Stewart,    30  Mias.   49 
(1855) ;  4  Kent  Com.  402. 

*  Mayor,  etc.,  of  New  York  ▼. 
Colgate,  12  N.  Y.  140  (1854) ;  Gould 
V.  Holland  Purchase  Ins^  Co.,  16 
Hun  (N.  Y.)  540  (1879) ;  Fisher  v. 
Mayor,  3  Hun  (N.  Y.)  652  (1875) ; 
Heyer  v.  Pruyn,  7  Paige  Ch.  (N.  Y.) 
465  (1839) ;  s.  c.  34  Am.  Dec.  359 ; 
Howland  v.  Shurtlefl,  43  Mass.  (3 
Mete.)  28  (1840) ;  8.  c.  35  Am.  Dec. 
384. 

6  Brost  V.  Corey,  15  N.  Y.  510 
(1857) ;  Waltermire  v.  Westover,  14 
N.  Y.  16  (1856);  New  York  Life  Ins. 
&  T.  Co.  V.  Covert,  29  Barb.  (N.  Y.) 
441  (1859);  Pratt  v.  Iluggins,  23 
Barb  (N.  Y.)  285  (1859) ;  Gillette  v. 
Smith,  18  Hun  (N.  Y.)  12  (1879) 
Heyer  v.  Pruyn,  7  Paige  Ch.  (N.  Y.l 
465  (1839) ;  s.  c.  34  Am.  Dec.  355 
Jones  V.  Merchants'  Bank  of  Albany. 
4  Robt.  (N.  Y.)  227  (1867) ;  Ware  v. 


§63.] 


WHElSr   DEBT   ALOITE   BAEEED. 


n 


and  the  premises  sold  to  pay  the  mortgage  debt,  although 
the  note  secured  by  the  mortgage  is  barred  by  the  statute  of 
limitations,  because  the  mortgage  has  a  legal  import  more 


Curry,  67  Ala.  274  (1883) ;  Scott  v. 
Ware,  64  Ala.  174  (1881) ;  Bizzell  v. 
Nix,  60  Ala.  281  (1877) ;  B.  c.  31  Am. 
Rep.  38  ;  Birnie  v.  Main,  29  Ark. 
591  (1874);  Hough  v.  Bailey,  33 
Conn.  289  (1864) ;  Haskell  v.  Bailey, 
22  Conn.  573  (1853);  Belknap  v. 
Gleason,  11  Conn.  160  (1836) ;  8.  C. 
27  Am.  Dec.  721 ;  Browne  v.  Browne, 
17  Fla.  607(1880) ;  s.  c.  38  Am.  Rep. 
96  ;  Elkins  v.  Edwards,  8  Ga.  325 
(1850) ;  Wright  v.  Leclaire,  3  Iowa, 
231  (1856)  ;  Crocker  v.  Holmes,  65 
Me.  195  (1875) ;  Ozmun  v.  Reynolds, 
11  Minn.  459,  473  (1866) ;  Trustees  of 
Jefferson  College  v.  Dickson,  Freem. 
Ch.  (IVliss.)  482  (1843) ;  Savings  Bank 
V.  Ladd,  40  N.  H.  463  (1860) ;  Fisher 
V.  Mossman,  11  Ohio  St.  46  (1860) 
Gary  v.  May,  16  Ohio,  66  (1847) 
Sparhawk  v.  Buell,  9  Vt.  74  (1837) 
Coles  V.  Withers,  33  Gratt.  (Va.)  186 
(1880) ;  Wayt  v.  Carwithen,  21  W. 
Va.  516  (1884)  ;  Pitzer  v.  Burns,  7 
W.  Va.  77  (1873)  ;  Knox  v.  Galligan, 
21  Wis.  470  (1867) ;  Wiswell  v.  Bax- 
ter, 20  Wis.  680  (1866)  ;  Almy  v. 
Wilbur,  2  Woodb.  &  M.  C.  C.  404 
(1846).  See  Waltermirev.  Westover, 
14  N.  Y.  20  (1856);  Jackson  v. 
Sackett,  7  Wend.  (N.  T.)  94  (1831) ; 
Baldwin  v.  Norton,  2  Conn.  163 
(1817)  ;  Elkins  v.  Edwards,  8  Ga. 
326  (1850) ;  Kellar  v.  Sinton,  14  B. 
Men.  (Ky.)  307  (1853);  Grain  v.  Paine, 
58  Mass.  (4  Cush.)*  483  (1849) ;  East- 
man, V.  Foster,  49  Mass.  (8  Mete.)  19 
(1844) ;  Thayer  v.  Mann,  36  Mass. 
(19  Pick.)  536  (1837);  Trotter  v. 
Erwin,  27  Miss.  772  (1854) ;  Wood 
V.  Augustine,  61  Mo.  46  (1875); 
Cookes  V.  Culbertson,  9  Nev.   199 


(1874) ;  Mackie  v.  Lansing,  2  Nev. 
802  (1866) ;  Read  v.  Edwards,  2  Nev. 
262  (1866);  Henry  v.  Confidence 
Gold  &  Silver  M.  Co.,  1  Nev.  619 
(1865) ;  Longworth  v.  Taylor,  2  Cin. 
Sup.  Ct.  Rep.  (Ohio)  89  (1870); 
Myer  v.  Beal,  5  Oreg.  130  (1873) ; 
Harris  v.  Vaughn,  2  Tenn.  Ch.  483 
(1875) ;  Richmond  v.  Aiken,  25  Vt 
324  (1853) ;  Kennedy  v.  Knight,  21 
Wis.  340  (1867) ;  Whipple  v.  Barnes, 
21  Wis.  327  (1867);  Cleveland  v. 
Harrison,  15  Wis.  670  (1862) ;  Union 
Bank  of  La.  v.  Stafford,  53  U.  S.  (12 
How.)  827,  340(1851) ;  bk.  13  L.  ed. 
1008  ;  Townsend  v.  Jemison,  50  U.  S. 
(9  How.)  413  (1850);  bk.  13  L.  ed.  880; 
McElmoyle  v.  Cohen,  38  U.  S.  (13 
Pet.)  312  (1839) ;  bk.  10  L.  ed.  177 ; 
Hughes  V.  Edwards,  22  U.  S.  (9 
Wheat.)  489  (1839) ;  bk.  6  L.  ed.  143 ; 
Sturges  V.  Crowninshield,  17  U.  S. 
(4  Wheat.)  122  (1819) ;  bk.  4  L.  ed. 
529;  Sparks  v.  Pico,  1  McMl.  C.  C. 
497  (1859) ;  Higgins  v.  Scott,  2  Bam. 
&  Ad.  413  (1831) ;  Spears  v.  Hartly, 
3  Esp.  81.  (1799). 

The  supreme  court  of  Ohio  say  in 
the  case  of  Fisher  v.  Mossman, 
supra,  that :  "A  discussion  of  the 
question  on  principle,  and  a  review 
of  the  authorities  bearing  upon  it, 
would  be  a  work  of  supererogation, 
after  it  has  been  so  thoroughly  done 
already  in  Belknap  v.  Gleason,  and 
we  content  ourselves  with  sajing, 
that  it  seems  to  us  that  that  case  was 
correctly  decided,  and  that  it  is  de- 
cisive of  the  one  before  us  on  the 
point  under  consideration."  11  Ohio 
St.  46  (1860). 


72 


MOETGAGE   DEBT   BAEEED. 


[§63. 


extensive  than  the  mere,  evidence  of  the  debt,'  and  remains 
in  full  force  until  the  debt,  which  it  secures  is  paid,"  except 
in  those  cases  where,  by  negligence,  the  mortgagee  has  lost 
his  rights. 

In  some  of  the  states,  however,  the  rule  has  been  adopted 
that  when  an  action  upon  a  promissory  note,  which  is  secured 
by  mortgage  upon  real  property,  is  barred  by  the  statute  of 
hmitations,  the  remedy  of  the  mortgagee  upon  the  mortgage 
is  also  barred/  Where  such  a  rule  prevails,  a  grantee  of  the 
the  mortgagor,  purchasing  subsequently  to  the  execution  of 
mortgage,  has  a  right  to  plead  the  statute  of  limitations  as  to 
that  part  of  the  claim  of  the  plaintiff  which  asks  for  a  decree 
foreclosing  the  mortgage  and  for  a  sale  of  the  mortgaged 
premises,  or  at  least  that  portion  of  such  premises  which  has 
been  transferred  to  the  grantee.*  Such  a  statute,  however, 
simply  takes  away  the  remedy  upon  the  mortgage  ;  it  dges  not 
discharge  the  debt  nor  in  any  way  extinguish  the  right  or 


>  See  Borst  v.  Corey.  15  N.  T.  506 
(1857) ;  Heyer  v.  Pruyn,  7  Paige  Ch. 
(N.  Y.)  465  (1839)  ;  Baldwin  v. 
Norton,  2  Conn.  161  (1817) ;  Elkins 
V.  Edwards,  8  Ga.  325  (1850) ;  Joy 
V.  Adams,  26  Me.  330  (1846) ;  Balch 
V.  Onion,  58  Mass.  (4  Cush.)  559 
(1849) ;  Thayer  v.  Mann,  36  Mass. 
(19  Pick.)  535  (1837)  ;  Micliigan  Ins. 
Co.  V.  Brown,  11  Mich.  265  (1863) ; 
Wilkinson  v.  Flowers.  37  Miss.  579 
(1859);  8.  c.  75  Am.  Dec.  78; 
Nevitt  V.  Bacon,  33  Miss.  212  (1856); 
8.  c.  66  Am.  Dec.  609 ;  Trotter  v. 
Erwin,  27  Miss.  772  (1854)  ;  Miller 
V.  Trustees  of  Jefferson  College, 
13  Miss  (5  Smed.  &  M.)  651  (1846) ; 
Richmond  v.  Aiken,  25  Vt.  324 
(1853) ;  Whipple  v.  Barnes,  21  Wis. 
327  (1867) ;  Wiswell  v.  Baxter,  20 
Wis.  680  (1866).  But  see  Haskell  v. 
Bailey,  22  Conn.  569  (1853). 

»  Joy  V.  Adams,  20  Me.  330  (1846). 

» Lent  V.  Morrill,  25  Cal.  492 
(1864) ;  McCarthy  v.  White,  21  Cal. 


495  (1863) ;  Lord  v.  Morris,  18  Cal. 
482  (1861)  ;  Emory  v.  Keighan,  94 
111.  543  (1880)  ;  Brown  v.  Rockhol, 
49  Iowa,  282  (1878)  ;  Clinton  Co.  v. 
Cox,  37  Iowa,  570  (1873) ;  Hubbard 
V.  Missouri  V.  L.  Ins.  Co.,  25  Kan. 
172  (1881) ;  Schmucker  v.  Sibert,  18 
Kan.  104  (1877) ;  s.  c.  26  Am.  Rep. 
765;  Hurley  v.  Cox,  9  Neb.  230 
(1879);  Blackwell  v.  Barnett,  52 
Tex.  326  (1880)  ;  Ross  v.  Mitchell, 
28  Tex.  150  (1866)  ;  Daggs  v.  Ewell, 
3  Woods  C.  C.  344  (1879). 

*  Wood  V.  Goodfellow,  43  Cal.  185 
(1872)  ;  Lent  v.  Shear,  26  Cal.  361 
(1864)  ;  Grattan  v.  Wiggins,  23  Cal. 
16  (1863) ;  McCarthy  v.  White,  21 
Cal.  495  (1863) ;  Lord  v.  Morris,  18 
Cal.  482,  490  (1861);  Medley  v. 
Elliott,  62  111.  532(1872)  ;  Pollock  v. 
Maison,  41  111.  517  (1866)  ;  Harris  v. 
Mills,  28  111.  44  (1862) ;  Schmucker 
V.  Sibert,  18  Kan.  104  (1877)  ;  s.  c. 
26  Am.  Rep.  765  ;  Low  v.  Allen,  41 
Me.  248  (1856). 


§  64.]  EEMOYAL   OF   STATUTOET   BAE.  73 

destroy  the  obligation;*  the  debt  still  remains  unsatisfied 
and  unextinguished  and  is  a  sufficient  consideration  to  sup- 
port a  new  promise." 

The  same  rule  applies  to  a  special  statute,  limiting  the 
time  for  instituting  a  suit,  that  applies  to  the  general  statute 
of  limitations.  Thus  where  a  claim  is  barred  by  a  special 
statute,  limiting  the  time  within  which  claims  against  the 
estate  of  a  deceased  person  may  be  presented  or  sued,  such 
claim  is  not  paid  or  satisfied  by  a  failure  to  present  or  sue  it 
within  the  time  thus  limited  ;  and  in  those  instances  where 
the  claim  is  secured  by  mortgage,  the  mortgage  may  be 
foreclosed,  notwithstanding  the  fact  that  an  action  on  the 
debt  is  barred  at  law.* 

§  64.    Removal  of  bar  of  the  statute. — The  bar  of  the 

statute  of  limitations  may  be  removed  by  an  acknowledgment 
of  the  debt.*  The  cases  differ  widely  as  to  what  con- 
stitutes a  sufficient  acknowledgment  for  this  purpose, 
some  of  them  holding  that  any  acknowledgment,  however 
slight,  without  a  new  promise  to  pay,  is  sufficient  to  remove 
the  bar  of  the  statute  ;*  but  other  cases  require  a  specific 
agreement  to  pay.* 


'  Sichel  V.  Carrillo,  42  Call.  493  (1813) ;  s.  c.  6  Am.  Dec.  428 ;  Fries 

(1871).  V.  Boisselet,  9  Serg.  &  R.  (Pa.)  128 

2  Sichel  V.  Carrillo,  42  Cal.  493  (1822) ;  s.  c.  11  Am.  Dec.  683 ; 
(1871).  Glenn  v.  McCullough,  1  Harp.  (S.  C) 

3  Sichel  V.  Carrillo,  43  Cal.  493  L.  484  (1824) ;  s.  "c.  18  Am.  Dec. 
(1871) ;  Duty  v.  Graham,  12  Tex.  661 ;  Lee  v.  Perry,  3  McC.  (S.  C.) 
427  (1854) ;  Graham  v.  Vining,  1  552  (1826) ;  s.  c.  15  Am.  Dec.  650 ; 
Tex.  639  (1847).  Burden  v.  McElhenny,   2  Nott.  & 

*  Danforth  V.  Culver,  11  Johns.(N.  McC.  (S.  C.)  60  (1819) ;  s.  c.  10  Am, 

T.)  146  (1814);   s.  c.  6  Am.  Dec.  Dec.   570;  Olcott  v.  Scales,  3  Vt 

361 ;   Lord  v.  Shaler,  3  Conn.   132  173  (1831) ;  e.  c.  21  Am.  Dec.  585. 

(1819);    8.   c.   8    Am.    Dec.    160;  "Lord  v.   Shaler,    3    Conn.    133 

Mellick  V.  DeSeelhorst,  1  111.  (Breese)  (1819) ;  s.  c.  8  Am.  Dec.  160  ;  Glenn 

171  (1827) ;  s.  c.  12  Am.  Dec.  172  ;  v.  McCullough,  1  Harp.  (S.  C.)  L. 

Bell     V.     Rowland,     Hard.    (Ky.)  484  (1824) ;  s.  c.  18  Am.  Dec.  661 ; 

301  (1808) ;  s.  0.  3  Am.  Dec.  729  ;  Burden  v.   McElhenny,  2  Nott.  & 

Seaward  v.  Lord,  1  Me.  (1  Greenl.)  McC.  (S.  C.)  60  (1819) ;  s.  c.  10  Am. 

163  (1821) ;  s.  c.  10  Am.  Dec.  50 ;  Dec.  570. 

Bangs  V.   Hall,  20  Mass.  (2  Pick.)  «  Danforth  v.    Culver,  11  Johns. 

379  (1824) ;  s.  c.  13  Am.  Dec.  437  ;  (N.  Y.)  146  (1814) ;  s.  c.  6  Am.  Dec. 

Jones  V.  Moore,  5  Binn.  (Pa.)  573  361 ;   BeU  v.  Roland,  Hard.   (Ky.) 


u 


REMOVAL    OF    STATUTOEY   BAE. 


[§64. 


From  a  careful  consideration  of  the  cases  it  will  be  found 
that  it  is  clearly  established  both  in  this  country  and  in 
England,  (i)  that  a  debt  barred  by  the  statute  of  limitations 
may  be  revived  by  a  new  promise;  (2)  that  such  new 
promise  may  be  either  an  express  or  an  implied  promise ; 
(3)  that  the  latter  is  created  by  a  clear  and  unqualified 
acknowledgment  of  the  debt ;  and  (4)  that  if  the  acknowledg- 
ment be  accompanied  by  such  qualifying  expressions  or  cir- 
cumstances as  repel  the  idea  of  an  intention  or  a  contract  to 
pay,  an  implied  promise  will  not  be  created.'  Where  the 
acknowledgment  of  a  debt  is  accompanied  by  a  promise  to  pay 
conditionally,  it  will  be  of  no  avail  unless  the  condition  upon 
which  the  promise  is  made  by  the  defendant  is  complied 
with,  or  the  event  happens  upon  which  the  promise  depends.' 
But  the  acknowledgment  or  promise,  to  take  the  case  out  of 
the  statute  of  limitations,  must  be  made  by  the  debtor  or 
by  some  one  in  his  behalf,  and  must  be  made  to  the  creditor 
or  to  some  one  acting  for  him  and  not  to  a  mere  stranger.* 


801  (1808) ;  8.  c.  3  Am.  Dec.  729. 

See  Newhouse  v.  Redwood,  7  Ala. 
599  (1839) ;  McCormick  v.  Brown, 
86  Cal.  180  (1868);  Kimmel  v. 
Schwartz,  1  111.  (Breese)  216  (1828) ; 
Gray  v.  Lawridge,  2  Bibb  (Ky.) 
285  (1811);  Hopkins  v.  Stout,  6 
Bush  (Ky.)  384  (1869);  Smith  v. 
Dawson,  10  B.  Men.  (Ky.)  114  (1849); 
Tischer  v.  Hess,  9  B.  Mon.  (Ky.) 
617  (1849) ;  French  v.  Frazier,  7  J. 
J.  Marsh.  (Ky.)  431  (1832) ;  Head  v. 
Manner,  5  J.  J.  Marsh.  (Ky.)  259 
(1831) ;  Rochester  v.  Buford,  5  J.  J. 
Marsh.  (Ky.)  32  (1830);  Hord  v.  Lee, 
4  T.  B.  Mon.  (Ky.)  36  (1826); 
Lansdale  v.  Brashear,  3  T.  B.  Mon. 
(Ky.)  332  (1826) ;  McLean  v.  Tliorp, 
4  Mo.  259  (1836)  ;  Shaw  v.  Newell, 
2  R.  I.  269  (1852);  Belote  v.  Wynne, 
7  Yerg.  (Tenn.)  541  (1835) ;  Bell  v. 
Morrison,  26  U.  S.  (1  Pet.)  351,  363 
(1828) ;  bk.  7  L.  ed.  179. 

'  Blakeman  v.    Fonda,  41   Conn. 
561  (1874);   Wachter  v.  Albee,  80 


lU.  47  (1875) ;  Carroll  v.  Forsyth,  69 
m.  127  (1873) ;  Collins  v.  Bane,  34 
Iowa,  385  (1872);  Gray  v.  McDowell, 
6  Bush  (Ky.)  475  (1869) ;  Citizens' 
Bank  v.  Johnson,  31  La.  An.  128 
(1869) ;  Parker  v.  Shuford,  76  N.  C. 
219  (1877) ;  Miller  v.  Baschore,  83 
Pa.  St.  356  (1877);  Senseman  v. 
Hershman,  82  Pa.  St.  88  (1876). 

*  Sedgwick  v.  Gerding,  55  Ga.  264 
(1875) ;  Carroll  v.  Forsyth,  69  111. 
127  (1873).  See  Norton  v.  Colby,  53 
111.  198  (1869) ;  Parsons  v.  Northern 
niinois  Coal  &  I.  Co.,  38  Bl.  433 
(1865) ;  Ayers  v.  Richards,  13  111. 
148  (1850). 

'  Wakeman  v.  Sherman,  9  N.  Y.  85 
(1853) ;  Bloodgood  v.  Bruen,  8  K 
Y.  362  (1853) ;  Ringo  v.  Brooks,  26 
Ark.  540  (1871) ;  Farrell  v.  Palmer, 
36  Cal.  187  (1868) ;  Keener  v.  CruU, 
19  Bl.  189  (1857) ;  Collins  v.  Bane, 
34  Iowa,  385  (1872) ;  Roscoe  v.  Hale, 
73  Mass.  (7  Gray)  274  (1856) ;  Taylor 
V.    Hendrie,    8    Nev.    243   (1873); 


§  64.]  EIGHTS   OF  PUECHASEE.  75 

Part  payment  of  a  debt  is  evidence  of  a  promise  to  pay 
the  remainder,  and  will  prevent  the  operation  of  the  statute 
of  limitations  as  a  bar ;'  and  it  is  a  universally  recognized 
rule  that  a  payment  of  the  interest  or  of  a  part  of  the 
principal  will  remove  the  bar  of  the  statute  of  limitations 
and  renew  a  mortgage,  so  that  an  action  may  be  brought  to 
enforce  it  within  twenty  years  after  such  last  payment.' 
But  it  would  seem  that  the  payment  of  interest  by  a 
mortgagor,  after  he  has  sold  the  property  to  another,  will 
not  prevent  or  remove  the  bar  of  the  statute  of  limitations 
so  far  as  a  subsequent  purchaser  is  concerned.*  Where 
there  are  several  persons  interested  in  the  equity  of  redemp- 
tion, however,  a  payment  of  interest  by  one  of  them  will 
remove  the  bar  or  prevent  the  running  of  the  statute  as  to 
all,*  and  a  payment  by  a  duly  authorized  agent  of  the  mort- 
gagor, or  other  person  interested  in  the  equity  of  redemp- 
tion, will  have  the  same  effect  ;*  but  a  payment  by  a  mere 
stranger  will  not  have  such  effect.* 

Although  the  payment  of  interest  by  one  party  interested 
in  the  equity  of  redemption  will  be  valid  and  binding  upon 
all,  yet  where  mortgaged  lands  are  sold  to  different  persons, 
one   of  whom  pays  the  entire  interest  on  the  mortgage  for 


Johns  V.  Lantz,  63  Pa.  St.  324(1869);  Huyck,  6  Barb.  (N.  T.)  588  (1849)  ; 

Kyle  V.  Wells,  17  Pa.  St.  286  (1851);  Bell  v.  Morrison,  26  U.  S.  (1  Pet) 

8.  c.  55  Am.  Dec.  555 ;  Christy  v.  370  (1828) ;  bk.  7  L.  ed.  182 ;  Rosa 

Flemington,  10  Pa.  St.  129  (1848) ;  v.  Jones,  89  U.  S.  (23  Wall.)  593;  bk. 

B.  c.  49  Am.  Dec.  590  ;  F.  &  M.  23  L.  ed.  730. 

Bank  v.  Wilson,  10  Watts  (Pa.)  261  *  See  Wenman  v.   Mohawk  Ins. 

(1840);   Georgia  Ins.   &  T.  Co.  v.  Co.,  13  Wend.  (N.  T.)  267  (1835) ;  s. 

Ellicott,   Tanney  C.   C.  130  (1840) ;  c.  28  Am.  Dec.  464  ;  and  Kincaid  v. 

8  Pai-sons  on  Cont.  (5th  ed.)  85.   See  Archibald,  10  Hun  (N.  Y.)  9  (1877). 

Sibert   v.    Wilder,    16     Kan.     176  »  ^Qy,  York  Life  Ins.  &  T.  Co.  v. 

(1876);    8.   c.   22  Am.    Rep.    280;  Covert,  29  Barb.  (N.  Y. )  435  (1859) ; 

Trammell  v.  Salmon,  2  Bail.  (S.  C.)  Jarvis  v.  Albro,  67  Me.  310  (1877). 

308  (1831);    Robbins  v.    Farley,    2  *  Pears  v.    Laiug,    L.  R.   13  Eq. 

Strobh.  (S.  C.)  348  (1847).  51,  54  (1871) ;  Roddam  v.  Motley,  1 

»  Newlin  v.  Duncan,  1  Harr.  (Del.)  DeG.  &  J.  1  (1857). 

204  (1833) ;  s.  c.  25  Am.  Dec.  66  ;  "  Ward  v.  Carttar,  L.  R.  1  Eq.  29 

Hunt  V.  Bridgham,  20  Mass.  (2  Pick.)  (1865). 

581  (1834) ;  s.  c.  13  Am.  Dec.  458.  «  Chinnery  v.   Evans,   11   H.   L. 

See  Reid  v.  McNaughton,  15  Barb.  Cas.  115  (1864). 
(X    Y.)  179    (1853);    Carshore    v. 


76  EIGHTS    OF   PUECHASEE.  [§  65. 

more  than  twenty  years,  without  calling  upon  the  others  for 
contribution,  he  can  not,  upon  subsequently  purchasing  the 
mortgage,  enforce  it  against  such  non-contributing  parties 
or  their  grantees.* 

§  65.    Rights  and  liabilities  of  grantee  of  mortgagor, 

— The  grantees  of  a  mortgagor  have  no  greater  rights 
and  succeed  to  no  better  title  than  the  mortgagor  himself 
possessed  at  the  time  the  conveyance  was  made  ;  therefore, 
a  purchaser  with  actual  or  constructive  notice  of  the  exist- 
ence of  a  mortgage  on  the  premises  can  avail  himself  of  the 
defence  of  the  bar  of  the  statute  of  limitations,  only  when 
his  grantor  could  have  done  so."  A  purchaser  of  mortgaged 
premises,  who  assumes  and  agrees  to  pay  the  mortgage  debt, 
recognizes  it  as  a  subsisting  incumbrance,  and  his  grantee 
will  be  bound  by  such  admission^  and  will  not  be  entitled 
to  set  up  the  statute  of  hmitations  after  the  lapse  of 
twenty  years,  unless  he  has  by  act  or  word  renounced  the 
mortgage,  and  thereafter  held  adversely  to  the  mortgagee. 
And  the  recital  in  a  deed  of  an  existing  mortgage  will  con- 
stitute an  acknowledgment  which  will  remove  the  bar  of  the 
statute,  and  will  have  the  same  effect  upon  the  purchaser 
and  his  grantees  as  a  direct  assumption  of  the  mortgage 
debt.*  Such  purchaser  will  be  bound  by  the  acts  and 
declarations  of  his  vendor  in  reference  to  the  mortgage 
while  he  retains  the  equity  of  redemption  or  any  part  of  it. 

Thus  the  purchasers  of  mortgaged  premises  are  bound  by 
an  acknowledgment  of  the  mortgage  as  a  valid  and  subsisting 
incumbrance,  made  by  their  grantor  within  twenty  years 
before  the  commencement  of  the  suit  to  foreclose  such 
mortgage,  and  can  not  for  that  reason  rely  upon  the  statute 
of  limitations  as  a  bar.*     A  purchaser  with  notice  from  a 


'  Pike  V.  Goodnow,  94  Mass.  (12  "  Palmer  v.  Butler,  36  Iowa,  576 

Allen)  472  (1866).  (1873). 

»  Medley  v.   Elliott,   62  111.    532  »  Heyer  v.  Pruyn,  7  Paige  Ch.  (N. 

(1872)  ;  Waterson  v.  Kirkwood.  17  Y.)  465  (1839)  ;  s.  c.   84  Am.   Dec. 

Kan.  9  (1876).  355  ;  Hughes  v.  Edwards.  22  U.  S. 

8  Harrington  v.   Slade,   22  Barb.  (9  Wheat.)  489  (1824);  bk.  6  L.  ed. 

CN.  Y.)  161   (1856)  :  Schmucker  v.  142. 
Sibert,  18  Kuu.  1U4  (1ST7). 


§  66.']      PEESUMPTION  OF  IMOETGAGEE's  POSSESSION".  77 

mortgagor  takes  under  the  mortgage  and  subject  to  the 
rights  and  interests  of  the  mortgagee  ;  his  rights  and  title  are 
no  better  than  those  of  his  grantor,  and  the  statute  of 
limitations  will  not  begin  to  run  in  his  favor,  until  after  some 
hostile  act  or  declaration  which  makes  his  possession  adverse 
to  that  of  the  mortgagee.* 

While  an  acknowledgment  of  a  mortgage  by  the  mortgagor 
is  binding  upon  his  grantees,  where  made  before  the  statute 
of  limitations  has  run,  yet  an  acknowledgment  or  a  part 
payment  made  by  the  mortgagor,  after  the  note  and  mortgage 
are  once  barred,  will  not  revive  them  as  against  his  grantees 
or  any  other  person  who  has  acquired  an  interest  in  the 
premises  prior  to  such  acknowledgment  or  part  payment.' 
And  it  is  the  settled  doctrine  in  some  states  that  the  mort- 
gagor has  no  power,  by  express  stipulation  or  otherwise,  or 
by  absenting  himself  from  the  state,  to  suspend  the  running 
of  the  statute  of  limitations,  or  in  any  manner  to  prolong 
the  time  for  the  payment  of  his  mortgage  against  persons 
who  have  subsequently  acquired  an  interest  in  the  equity  of 
redemption,  either  as  purchasers  or  incumbrancers.* 

§  66.  Possession  by  mortgagee  —  Presumption  of 
foreclosure. — It  is  a  well  settled  rule  that  the  possession 
of  mortgaged  premises  for  twenty  years  by  the  mortgagee, 
without  any  payment  of  principal  or  interest  by  the  mort- 
gagor, and  without  an  accounting  or  an  acknowledgment  of  a 
subsisting  mortgage  and  without  any  dealing  between  the 
mortgagee  and  mortgagor  in  relation  to  the  land,  is  pre- 
sumptive evidence  that  the  mortgage  has  been  foreclosed/ 


'  Thayer  v.  Cramer,  1  McC.  (S.  C.)  Cox,  37  Iowa,  570  (1873);  Schmucker 

Eq.  395  (1826)  ;  Mitchell  v.  Bogan,  v.  Sibert,  18  Kan.  104  (1877)  ;  Water- 

11  Rich.   (S.   C.)  686,  706  (1857) ;  son  v.  Kirkwood,  17  Kan.  9  (1876). 

Wright  V.  Eaves,  5  Rich.  (S.  C.)  Eq.  .    *  Demarest  v.  Wynkoop,  3  Johna. 

61  (1852).  Ch.  (N.  Y.)  135  (1817) ;  s.  c.  8  Am. 

»  Schmucker  v.  Sibert,   18  Kan  Dec.  467 ;   Blethen  v.   Dwinal,  35 

104  (1877).  Me.  556  (1853) ;  Dexter  v.  Arnold,  1 

»  Wood  V.    Goodfellow,  43  Cal.  Sumn.  C.  C.  109  (1831) ;  Ashton  v. 

185   (1872) ;    Sichel  v.  Carrillo,  42  Milne,  6  Sim.  369  (1833) ;  Cholmon- 

Cal.  493  (1871) ;  Barber  v.  Babel,  36  deley  v.  Clinton.  2  Jac.  &  W.  1,  180 

Cal.  1  (1868) ;  Lent  v.  Shear,  26  Cal.  (1820). 
861  (1864).    See  also  Clinton  Co.  v. 


h 


78  DEFICIENCY   WHEN   DEBT    BARKED.    [§§  67-68. 

and  is  a  bar  to  an  action  for  redemption  unless  the  mortgagor 
can  bring  himself  within  the  provisions  of  the  statute  of 
limitations.*  The  whole  doctrine  has  been  fully  unfolded  in  a 
very  elaborate  opinion  in  a  leading  English  case,'  in  the  course 
of  which  the  court  remark:  "The  actual  possession  of  the 
mortgagee,  continued  for  twenty  years  without  any  payment 
of  interest  by  the  mortgagor,  or  anything  done  or  said  during 
that  period  to  recognize  the  existence  of  the  mortgage  or 
to  acknowledge  it  on  the  part  of  the  mortgagee,  would  clearly 
operate  as  a  bar  to  redemption  by  the  mortgagor." 

§  67.     Decree  for  deficiency  when  debt  barred. —  In   an 

action  to  foreclose  a  mortgage  a  court  of  equity  may  render 
a  decree  in  personam  against  the  mortgagor  for  any  part  of 
the  debt  remaining  unsatisfied  on  the  sale,  notwithstanding 
the  fact  that  the  remedy  on  the  note  has  been  barred  by 
the  statute  of  limitations.* 

§  68.  Right  of  mortgagee  to  retain  possession  after 
remedy  barred. — After  forfeiture  the  mortgagee  or  his 
heirs,  having  obtained  possession  of  the  mortgaged  premises, 
are  entitled  to  retain  such  possession  until  the  mortgage 
debt  is  satisfied.*     The  assignee  of  a  mortgagee  in  possession 


'  Demarest  v.  "Wynkoop,  3  Johns,  Conn.  135  (1819) ;  B.  0.  8  Am,  Dec. 

Ch.  (N.  Y.)  129,  136  (1817) ;  8.  c.  8  164  ;  Jesus  College  v.  Bloom,  3  Atk. 

Am.  Dec.  467.      See  Anonymous,  3  263  (1745) ;  Pearce  v.  Creswlck,   2 

Atk.  313  (1746) ;  Aggas  v.  PickereU,  Hare,  293  (1843);  1  Foubl.  Eq.  I,  Ch. 

3  Atk.  225  (1745) ;  Lytton  V.  Lytton,  1,   §3,    note   f.;    Cooper   Eq.    PL 

4  Bro.  Ch.  458  (1793) ;  Reeks  v.  Introd.  p.  xxxi. 
Postlethwaite,  Coop.  Eq.  161  (1815);  *  Chase  v.  Peck,  21  N.  Y.  581 
Barron  v.  Martin,  Coop.  Eq.  189  (1860) ;  Siahler  v.  Singner,  44  Barb. 
(1815) ;  Jenner  V.  Tracy,  3  P.  Wms.  (N.  Y.  )  606  (1865);  Munroe  v. 
287  (1731),  note  ;  Belch  v.  Harvey,  Merchant,  26  Barb.  (N.  Y.)  883 
8  P.  Wms.  287  (1730) ;  Bonney  v.  (1858)  ;  Casey  v.  Buttolph,  12  Barb. 
Ridgard,  17  Ves.  99  (1809) ;  s.  c.  4  (N.  Y.)  637  (1851) ;  Jackson  v. 
Bro.  Ch.  138;  1  Cox.  Eq.  145  Delancy,  13  Johns.  (N.  Y.)  537 
(1784);  Hodlev.Healey.l  Ves.  «&B.  (1816);  s.  c.  7  Am.  Dec.  403; 
536  (1813).  Moore  v.  Cable,  1  Johns.  Ch.  (N.  Y.) 

«  Cholmondeley  v.  Clinton,  2  Jac.  385  (1815) ;  Watson  v.  Spence,  20 

&  W.  187  (1820).  Wend.  (N.  Y.)  260  (1838) ;  Phyfe  v. 

»  Birnie    v.    Main,    29    Ark.  591  RUey,  15  Wend.  (N.  Y.)  248  (1836) ; 

(1874).  See  1  Story  Eq.  Jur.  |  64  k.  s.  c.  30  Am.  Dec.  55  ;  VanDuynev. 

citing  Middletown  B^nk  v.  Russ,  3  Thayre,    14   Wend.    (N.    Y.)    284 


§68.] 


POSSESSION   AFTEE   REMEDY  BAEKED. 


Ty 


will  be  protected  by  the  mortgage  to  the  same  extent  as  the 
mortgagee,  although  no  foreclosure  maybe  shown  ;*  and  this 
is  true  although  the  assignment  was  obtained  on  an  usurious 
consideration.'  The  reason  for  this  is  because  the  mortgagee 
is  still,  independent  of  statute,*  to  be  considered  the  absolute 
owner  at  law  after  default  of  payment.* 


(1835) ;  Bussey  v.  Page,  14  Me.  133 
(1836);  Pacev.  Chadderdon,4Mmn. 
499  (1860) ;  Pettengill  v.  Evans,  5  N. 
H.  54  (1829) ;  Henry  v.  Confidence 
Gold  &  Silver  Mining  Co.,  1  Nev. 
619  (1865)  ;  Den  v.  Wright,  7  N.  J. 
L.  (2  Halst.)  175  (1824);  8.  o.  11  Am. 
Dec.  543  ;  Harris  v.  Haynes,  34  Vt 
220  (1861) ;  Hennesy  v.  Farrell,  20 
Wis.  43  (1865). 

*  Jackson  v.  Bowen,  7  Cow.  (N. 
T.)  13  (1827) ;  Jackson  v.  Minkler, 
10  Johns.  (N.  T.)  480  (1813).  See 
also  Madison  Ave.  Baptist  Church 
V.  Baptist  Church  in  Oliver  St,  73 
N.  Y.  83  (1878) ;  Trimm  v.  Marsh, 
64N.T.  599  (1874) ;  a  o.  13  Am.  Rep. 
623 ;  Winslow  v.  McOaU,  33  Barb. 
(N.  Y.)  241  (1860);  Bolton  v. 
Brewster,  82  Barb.  (N.  Y.)  889  (I860). 


See  also '  Watson  ▼.  Spence,  20 
Wend.  (N.  Y.)  261,  264  (1838);  Jack- 
son V.  DeLancey,  11  Johns.  (N.  Y.) 
365  (1814) ;  B.  0.  13  Johns.  (N.  Y.) 
537  (1816) ;  Randall  v.  Raab,  2  Abb. 
(N.  Y.)  Pr.  807,  314  (1855) ;  Casey 
V.  Buttolph,  12  Barb.  (N.  Y.)  637, 
640  (1851). 

» Jackson  v.  Bowen,  7  Cow.  (N. 
Y.)  13  (1837). 

» See  3  N.  Y.  Rev.  Stat  (2d  ed.) 
336,  §57. 

*  Edwards  v.  Farmers'  Fire  Ihb. 
Co.,  31  Wend.  (N.  Y.)  467,  484 
(1839).  See  also  Jackson  v.  Pierce, 
10  Johns.  (N.  Y.)  414  (1813) ;  Smith 
y.  Shuler,  12  Serg.  &  R.  (Pa.)  340 
(1834);  Simpson's  Lessee  v.  Am- 
moDS,  1  Binn.  (Pa.)  170  (180^ 


CHAPTER  V. 


PARTIES  PLAINTIFF, 


69.  Introductory. 

70.  Parties  generally  in  equitable 

foreclosures. 

71.  Application  of  general  rules 

by  American  courts. 
73.  Parties  plaintiff  generally. 

73.  Sole  mortgagee,  owning    the 

mortgage,  may  foreclose. 

74.  Assignor  of  mortgage  can  not 

foreclose 

75.  Assignee,  sole  owner  of  mort- 

gage, may  foreclose. 

76.  Form  of  assignment  to  enable 

assignee  to  foreclose. 

77.  When  assignor  and  assignee 

should  or  should  not  both  be 
parties. 

78.  Joint  mortgagees  ;  any  one  or 

more  may  foreclose. 

79.  Same  rule — Joint  mortgagees 

in  representative  capacity. 

80.  Partners  ;  any  one    or    more 

may  foreclose. 

81.  Joint  mortgagees,  one  dying ; 

doctrine  of  survivorship. 

82.  When  personal  representatives 

of  deceased  joint  mortgagee 
necessary  parties. 

83.  Mortgagees,  owners  in  sever- 

alty; any  one  or  more  may 
foreclose. 

84.  Owner  of  one  of  several  notes 

secured  by  a  mortgage  may 
foreclose. 

85.  All  owners  of  notes  necessary 

parties — Payable  in  order  of 
maturity. 

86.  Notes  payable  pro  rata  in  New 

York  and  some  other  states. 

87.  Owner  of    mortgage,  having 

pledged  the  same  as  collateral 
security,  may  foreclose. 

88.  Pledgee  necessary  party-Mort- 

guge  collaterally  assigned. 


j  89.  Assignee  of  mortgage  as  col- 
lateral security  may  foreclose. 

90.  Owner  of  an  equitable  interest 

of  any  kind  in  the  mortgage 
may  generally  foreclose. 

91.  Special  cases  of  equitable  in- 

terest—Annuitants, legatees, 
executors. 

92.  Special     cases    of    equitable 

assignment  —  Purchaser  on 
defective  foreclosure — Pay- 
ment by  mistake  or  fraud. 

93.  Equitable  owner  by  subroga- 

tion may  foreclose. 

94.  A  surety   for   the   mortgage 

debt  may  sometimes  fore- 
close— First,  having  guaran- 
teed debt. 

95.  Surety  may  foreclose-Second, 

grantee  having  assumed  mort- 
gage. 

96.  Surety  may  foreclose — Third, 

junior  interest  redeeming 
from  senior  interest. 

97.  Assignee  of  a  mortgage  with- 

out the  bond  can  not  fore- 
close. 

98.  Assignee  of  the  note,  bond  or 

debt  may  foreclose,  though 
the  mortgage  is  not  assigned. 

99.  Mortgagees  owning    contem- 

poraneous mortgages,  being 
equal  liens,  any  one  or  more 
may  foreclose. 

100.  Owner  of  two  mortgages  cao 

not  foreclose  both  at  same 
time  in  separate  actions. 

101.  Assignee  in  bankruptcy  or  by 

general  assignment,  or  re- 
ceiver of  a  corporation,  may 
foreclose. 

102.  Assignee    pendente   lite   may 

continue  a  foreclosure. 

103.  Owner   of  mortgage  dying — 

Personal  representatives  may 
foreclose. 


80 


§§  69-70.] 


PAKTEES    GENERALLY. 


81 


§  104.  Vendor  under  land  contract 
dying— Personal  representa- 
tives may  foreclose. 

105.  Owner  of   mortgage  dying — 

Heirs,  devisees  and  legatees 
generally  can  not  foreclose. 

106.  An  executor  or  administrator 

to    whom     a   mortgage   is 
executed  may  foreclose. 

107.  The  successor  in  office  of  an 

executor    or    administrator 
may  foreclose. 

108.  Foreign  executors  and  admin- 

istrators— When    they    may 
foreclose. 


§  109.  Methods  of  avoiding  rule  re- 
quiring domestic  administra- 
tor for  plaintiff. 

110.  Trustees  may  foreclose. 

111.  Beneficiaries--When  not  neces- 

sary parties. 

118.  Beneficiarieig,  cestuis  que  trust, 
may  sometimes  foreclose. 

113.  Mortgages  to  persons  in  official 

capacity  ;  they  or  their  suc- 
cessors may  foreclose. 

114.  A  married  woman  owning  a 

mortgage  may  foreclose. 


§  69.  Introductory. — In  the  conduct  of  an  action  in  a 
court,  or  of  a  proceeding  under  a  statute,  it  has  always  been 
of  the  first  importance  that  the  persons  to  be  bound  by 
the  result  should  be  brought  within  the  jurisdiction  of  the 
authority  pretended  to  be  exercised.  With  some  classes 
of  actions  the  practitioner  has  no  difficulty  in  determining 
who  should  be  brought  into-  court ;  but  in  the  enforcement 
of  the  rights  which  attach  to  a  mortgage  and  the  debt  it 
secures,  difficult  and  complicated  questions  are  often 
presented  as  to  who  should  be  brought  within  the  cognizance 
of  the  court,  that  a  complete  remedy  may  be  obtained  by 
the  prosecutor,  and  that  the  rights  of  no  claimant  of  an 
interest  in  the  subject  matter  or  in  the  object  of  the  pro- 
ceeding, may  be  made  to  suffer  an  injury,  or  allowed  to 
pass  unprotected — and  this  is  necessarily  so  from  the 
peculiar  character  and  history  of  mortgage  securities,  and 
from  the  large  place  that  the  law  of  mortgages  fills  in  the 
general  jurisprudence  and  practice  of  our  states.  Attention 
will  be  given  in  the  following  chapters  on  parties  to  a 
consideration  of  the  questions,  who  may  be  and  who  should 
be  brought  into  an  action  or  a  proceeding  to  enforce  a 
mortgage,  and  what  are  the  rights  of  parties  with  reference 
to  such  enforcement. 

§  70.  Parties  generally  in  equitable  foreclosures. — 
There  are  two  leading  principles  which  control  courts  of 
equity  the  world  over  in  determining  the  proper  parties  to 
a  suit:  first,  that  the  rights  of  no  man  shall  be  decided  in  a 
court  of  justice  unless  he  himself  is  present;  second,  that 

(6) 


82  EULES  rrr  americatt  couhts.  [§  71. 

the  a'ecree  rendered  shall  provide  for  the  rights  of  all  persons 
whose  interests  are  in  any  way  connected  with  the  subject- 
matter  of  the  action.  The  combination  of  these  two 
principles  has  given  rise  to  the  general  rule  that  all  persons 
having  an  interest  in  the  object  of  the  suit  ought  to  be 
made  parties.  As  expressed  by  an  eminent  English  jurist, 
"all  persons  materially  interested  in  the  subject  ought 
generally  to  be  parties  to  the  suit — plaintiffs  or  defendants 
— however  numerous  they  may  be,  so  that  the  court  may  be 
enabled  to  do  complete  justice  by  deciding  upon  and 
settling  the  rights  of  all  persons  interested,  and  that  the 
orders  of  the  court  may  be  safely  executed  by  those  who 
are  compelled  to  obey  them,  and  future  litigation  may  be 
prevented."*  It  is  only  by  the  application  of  such  broad  > 
principles  that  that  complete  justice  which  equity  courts 
**  delight  to  render,'"  can  be  administered  to  the  numerous 
persons  who,  in  nearly  every  case,  have  some  interest  in  the 
mortgage  debt  or  in  the  mortgaged  premises  under  fore- 
closure. In  their  practical  application,  however,  these 
principles  are  subject  to  many  limitations  and  modifications, 
due  mainly  to  local  interpretation  and  to  statutory  enact- 
ments. 

§  71.  Application  of  general  rules  by  American  courts. 
— These  general  principles,  established  by  such  eminent 
English  judges  as  Lords  Talbot,*  Redesdale,*  Hardwicke,* 
Eldon,*  Langsdale'  and  Sir  William  Grant,*  have  been 
adopted  by  all  our  equity  courts,  state  and  federal;  and 
in  many  states  the  general  principles  of  equity,  respecting 
parties  to  suits,  have  been  incorporated  into  their  codes.  In 
New  York  it  is  provided  that  "  all  persons  having  an 
Interest  in  the  subject  of  the  action  and  in  obtaining  the 
judgment  demanded,  may  be  joined  as  plaintiffs."*    "  Any 


'  Lord  Redesdale  in  Red.  PI.  164.  •  Cockbum  v.  Thompson,  16  Ves 

»  Knight  V.   K.,  3  P.  Wms.  833  Jr.  321  (1809). 

(1784).  '  Richardson  v.  Hastings,  7  Beav. 

»  Knight  V.  K,  8  P.  Wms.  333  323,  326  (1844). 

(1784).  •  Palk  V.  Clinton,  12  Ves.  Jr.  68 

*  Red.  PI.  164.  (1806). 

•  Poore  V.  Clarke,  2  Atk.  515  (1742).  »  N.  Y.  Code  Civ.  Proo.  §  448. 


§  72.]  PARTIES   PLAINTIFF    GENERALLY.  83 

person  may  be  made  a  defendant  who  has  or  claims  an 
interest  in  the  controversy  adverse  to  the  plaintiff,  or  who 
is  a  necessary  party  defendant,  for  a  complete  determination 
or  settlement  of  a  question  involved  therein.'"  But  in  the 
details  of  practice,  various  and  often  antagonistic  rules  have 
grown  up  in  the  different  states  respecting  the  proper  and 
necessary  parties  to  foreclosures,  as  will  be  seen  from  an 
examination  of  the  cases  cited  under  almost  any  of  the 
following  sections.  It  is  only  in  rare  or  complicated  cases, 
however,  that  the  rules  differ  materially,  especially  where 
questions  of  trust,  assignment,  representation  and  personal 
liability  are  concerned ;  in  simple  cases  the  rules  are 
substantially  alike.  When  a  mortgage  and  the  parties  to  it 
remain  the  same  at  the  time  of  foreclosure  as  at  the  time  of 
delivery,  it  is  a  universal  rule  that  the  mortgagee  and 
the  mortgagor  are  the  only  parties  to  be  brought  before  the 
court. 

§72.  Parties  plaintiff  generally. — Mortgages  are  now 
universally  recognized  as  securities  upon,  and  not  titles  in, 
real  estate.  The  party  holding  the  security  has  such  an 
interest  in  the  title,  however,  that  so  long  as  his  debt  exists 
the  security  binds  the  title  to  its  ultimate  payment.  That  the 
title  may  be  cleared  of  this  lien  by  the  process  of  foreclosure, 
the  equitable  rule  has  been  established  that  every  party  who 
has  any  interest  in  the  mortgage  debt  must  be  brought 
before  the  court,  that  the  rights  and  interests  of  all  in  the 
security  may  be  adjudged  in  relation  to  the  mortgaged 
premises. 

All  parties  interested  in  the  mortgage  debt  may  come 
before  the  court  together;  and  in  some  states  it  is  pro- 
vided by  statute  that  ''all  persons  having  an  interest  in 
the  subject  of  the  action  and  in  obtaining  the  judgment 
demanded  may  be  joined  as  plaintiffs."'  It  is  indispensable 
that  the  plaintiff  have  a  real  interest  in  the  action  ;  and  the 
New  York  Code  has  provided  that  every  action  must  be  prose- 
cuted in  the  name  of  the  real  party  in  interest,  except  that 
since  the  abolition  of  uses  and  trusts,  a  personal  representative 


'  N.  T.  Code  Civ.  Proc.  §447.  »  N.  Y.  Code  Civ.  Proc.  §  446. 


84:  PERSOlNrS   INTERESTED    JIUST   BE   PARTIES.        [§  72. 

and  a  trustee  of  an  express  trust  may  sue  without  join- 
ing with  him  the  person  for  whose  benefit  the  action  is 
prosecuted.' 

There  are  many  cacses  in  which  more  than  one  person  has 
an  interest  in  the  mortgage,  and  in  which  all  interested  may 
join  as  plaintiffs.  Some,  however,  may  refuse  to  join  as  co- 
plaintiffs,  and  such  parties  may,  as  a  general  rule,  be  made 
defendants  to  the  action.  It  is  not  material  who  begins  the 
action,  for  it  is  sufficient  in  equity  that  all  parties  interested 
in  the  subject  of  the  suit  be  before  the  court,  in  the  form  of 
plaintiffs  or  of  defendants ;  but  no  person  can  be  a  plaintiff 
unless  he  has  a  real  interest  in  the  mortgage  or  in  the  debt 
thereby  secured.  It  is  generally  true  that  any  person  who 
is  so  interested,  even  in  a  remote  or  conditional  way,  may, 
as  plaintiff,  commence  an  action  to  foreclose,  making  defen- 
dants all  other  parties  interested  in  any  way  in  the  bond  and 
mortgage,  upon  their  refusal  to  join  as  co-plaintiffs." 

As  no  one  but  the  mortgagee,  or  those  claiming  under 
him,  can  have  any  cause  for  commencing  a  foreclosure,  he  or 
his  successor  in  interest  generally  becomes  a  party  to  the 
action  by  voluntarily  instituting  it  as  plaintiff.  Bonds  and 
mortgages  have  become  such  favorite  securities  and  invest- 
ments with  capitalists  and  others,  that  the  law  determining 
the  rights  of  parties  holding  them  has  grown  into  unusual 
importance  in  many  states,  so  that  complicated  questions 
have  arisen  in  the  courts  as  to  who  can  maintain  an  action 
for  foreclosure.  This  chapter  will  be  devoted  to  the 
consideration  of  parties  plaintiff,  or  those  who  may  com- 
mence the  foreclosure  of  a  mortgage. 


'  N.  Y.  Code  Civ.  Proc.  §  449.  obtained,  he  may  be  made  a  defen- 

'  This  general  equitable  rule  has  dant,    the    reason    therefor    being 

been  embodied  in  the  codes  of  some  stated  in  the  complaint.  And  where 

states.  See  the  N.  Y.  Code  Civ.  Proc.  the  question  is  one  of  a  common  or 

^  448  :  "Of  the  parties  to  the  action,  general  interest  of    many  persons  ; 

those  who  are  united  in  interest  must  or  where  the  persons,  who  might  be 

be  joined  as  plaintiffs  or  defendants,  made  parties,  are  very  numerous, 

except  as  otherwise  expressly  pre-  and  it  may  be  impracticable  to  bring 

scribed    in    this    act.      But   if    the  them  all  before  the  court,  one  or 

consent  of  any  one.  who  ought  to  be  more  may  sue   or  defend  for  the 

joined  as  a  plaiulifi,   can    not   be  benefit  of  all." 


§§  73-74]         SOLE   MORTGAGEE ASSIGNOE.  85 

§  73.  Sole  mortgagee,  owning  the  mortgage,  may 
foreclose. — It  is  almost  axiomatic  that  a  sole  mortgagee, 
who  continues  to  own  his  mortgage,  may  be  plaintiff  in  an 
action  to  foreclose  the  same.  He  is  a  party  to  the  contract, 
and  the  only  person  who  can  be  injured  by  a  breach  of  it  on 
the  part  of  the  mortgagor,  or  those  who  succeed  to  the 
mortgagor's  interest ;  he  is  the  only  person  who  can  be 
plaintiff,  as  no  one  else  has  any  interest  in  the  mortgage  or 
in  the  indebtedness  thereby  secured.'  The  same  rule  is  true 
in  statutory  foreclosures." 

The  fact  that  a  mortgagee  has  been  appointed  adminis- 
trator of  his  mortgagor's  estate  will  not  prevent  his 
foreclosing  against  the  heirs  of  the  mortgagor.*  And  where 
a  decree  of  foreclosure  has  been  vacated  for  irregularity,  the 
mortgage  is  not  cancelled,  but  will  be  restored,  and  the 
mortgagee  may  foreclose  again.  A  surety  may  foreclose  an 
indemnifying  mortgage  which  he  holds  in  his  own  name, 
without  joining  his  principal  in  the  action.*  And  a  person 
holding  a  mortgage  conditioned  to  pay  an  annuity  in  certain 
quantities  of  produce,  may  foreclose  upon  a  breach  of  the 
condition,  and  have  the  premises  sold  for  the  amount  of 
damages  that  he  may  be  able  to  prove.* 

§  74.    Assignor  of  mortgage  can  not  foreclose. — If  the 

mortgagee  has  assigned  his  bond  and  mortgage  absolutely 
and  unconditionally,  he  has,  of  course,  no  further  interest  in 
it,  and  can  not,  even  nominally,  be  plaintiff  in  an  action  to 
foreclose.*  A  foreclosure  by  a  mortgagee,  who  had  parted 
with  all  his  interest  in  the  bond  and  mortgage,  has  been  held 


'  Haskell  v.  BaUey,  23  Conn.  573      (1859) ;   so  can  a  surety  of  a  note 


(1853) ;  Newall  v.  Wright,  3  Mass 
138  (1807) ;  Wendell  v.  New  Hamp- 
shire Bank,  9  N.  H.  404,  417  (1838) 
Sutton  V.  Stone.  2  Atk.  101  (1740) 
«  Hubbell  V.  Sibley,  5  Lans.  (N, 


after  payment,  Tilford  v.  James,  7 
B.  Mon.  (Xy.)  337  (1847) ;  McLean 
V.  Ragsdale,  31  Miss,  701  (1856); 
also  an  indorser,  Lewis  v.  Starke,  18 
IVIiss.  (10  Smed.  &  M.)  120  (1848). 


Y.)  51  (1871).  '  Peterson  v.  Oleson,  47  Wis.  122 

'  Hunsucker   v.    Smith,  49  Ind.  (1879),    citing    similar    cases.      See 

114  (1874).  Morrison  v.  Morrison,   4  Hun  (N. 

*  An  acceptor  of  a  bill  can  fore-  Y.)  410  (1875). 

close  after  payment,  Planters'  Bank  *  Barraque  v.  Manuel,  7  Ark.  (3 

V.   Douglass,  2    Head   (Tenn.)  699  Eng.)  516  (1847). 


86 


ASSIGNEE   MAY  FORECLOSE. 


[§V5. 


nugatory.*  And  in  an  action  brought  by  a  mortgagee  "  for 
the  use  of  his  assignee,"  the  complaint  was  dismissed  for  the 
reasons  that  the  assignee  was  not  made  a  party  and  that 
the  plaintiff  did  not  have  a  real  interest  in  the  action  ;'  but 
where  an  assignment  was  defective,  the  action  was  allowed 
to  be  maintained  in  the  name  of  the  mortgagee.*  After 
an  assignment,  the  mortgagee  is  neither  a  proper  nor  a  neces- 
sary defendant  to  the  action.* 

§  75.    Assignee,  sole  owner  of  mortgage,  may  foreclose. 

— A  person  who  acquires  the  absolute  and  unconditional 
ownership  of  a  bond  and  mortgage  by  assignment  from 
the  mortgagee,  or  from  a  mesne  assignee,  may  maintain 
an  action  for  the  foreclosure  of  the  same  ;*  he  is,  indeed, 
the  only  possible  plaintiff,  as  he  has  "contracted  to 
stand   in   the  place  of  the  original  mortgagee  and  of  all 


>  Gushing  v.  Ayer,  25  Me.  383 
(1845) ;  Call  v.  Leisner,  23  Me.  25 
(1843). 

*  Burton  v.  Baxter,  7  Blackf. 
(Ind.)  297  (1844).  See  Winkelman 
V.  Kiser,  27  111.  21  (1861) ;  Prjor  v. 
"Wood,  31  Pa.  St.  142  (1858). 

*  Partridge  v.  Partridge,  38  Pa. 
Bt.  78  (1860),  distinguishing  Pryor 
V.  Wood,  31  Pa.  St.  143  (1858). 

*  Andrews  v.  Gillespie,  47  N.  Y. 
487  (1872)  ;  Whitney  v.  McKinney, 
7  Johns.  Ch.  (K  Y.)  144  (1823).  See 
post  %%  75,  178  and  cases  cited. 

*  Andrews  v.  Gillespie,  47  N.  Y. 
487  (1872);  Christie  v.  Herrick,  1 
Barb.  Ch.  (N.  Y.)  254  (1845) ;  Frank- 
lyn  V.  Hayward,  61  How.  (N.  Y.) 
Pr.  43  (1881) ;  Whitney  v.  McKin- 
ney, 7  Johns.  Ch.  (N.  Y.)  144 
(1823).  See  Meeker  v.  Claghorn,  44 
N.  Y.  349  (1871),  and  Allen  v. 
Brown,  44  N.  Y.  228  (1870),  for  a 
general  discussion  of  the  rights  of 
an  assignee  of  a  chose  in  action  to 
maintain  a  suit  in  his  own  name. 
Brown  v.  Snell,  6  Fla.  741  (1856) ; 
Strother  v.  Law,  54  111.  413  (1870) ; 


Crooker  v.  Jewell,  81  Me.  306  (1850), 
where  the  assignor  was  an  adminis- 
trator; Hills  V.  Eliot,  12  Mass.  26 
(1815) ;  Gould  v.  Newman,  6  Mass. 
239  (1810);  Fisher  v.  Meister,  24 
Mich.  447  (1872) ;  McGuffey  v.  Fin- 
ley,  20  Ohio,  474  (1851),  relying 
upon  Miller  v.  Bear,  3  Paige  Ch.  (N. 
Y.)  466  (1833),  and  collating  author- 
ities. Kinna  v.  Smith,  3  N,  J,  Eq. 
(2  H.  W.  Gr.)  14  (1834),  where  the 
assignor  was  an  executor ;  Dolman 
V.  Cook,  14  N.  J.  Eq.  (1  McCart.) 
56  (1861) ;  Horstman  v.  Gerker,  49 
Pa.  St.  282  (1865);  Knox  v.  Galligan, 
21  Wis.  470  (1867).  In  Douglass  v. 
Durin,  51  Me.  121  (1863),  the 
assignor  was  an  heir,  and  as  the  as- 
signment passed  no  title  to  the 
assignee,  the  foreclosure  was  void. 
In  Casper  v.  Munger,  62  Ind.  481 
(1878),  the  assignee  of  a  mortgage, 
given  to  indemnify  the  mortgagee 
against  certain  contingencies,  was 
allowed  to  foreclose  on  the  accruing 
of  the  liability.  Wood  v.  Williams, 
4  Madd.  186  (1819) ;  Fisher  on  Mort- 
gages, §  355. 


§  76.]  FOKM   OP   ASSIGimENT.  87 

assignors.*'  No  other  person  can  be  interested  in  the 
mortgage  debt.  But  if  the  pretended  assignee  has  no  title 
whatever  to  the  mortgage,  a  foreclosure  conducted  by  him, 
will  be  absolutely  void  and  will  pass  no  title  to  the  purchaser.* 
It  has  been  held  that  if  the  husband  of  a  married  woman 
fails  to  unite  with  her  in  executing  an  assignment  of 
her  separate  bond  and  mortgage,  the  assignee  will  not 
obtain  a  title  upon  which  he  can  maintain  a  foreclosure.* 
And  the  assignment  to  a  wife  of  a  mortgage  executed 
by  her  husband  upon  lands  which  he  still  owned  at  the 
time  of  the  assignment  has  been  held  to  extinguish  the 
debt,  so  that  no  action  would  lie;*  but  in  New  York 
and  most  states  such  an  assignment  would  not  now  impair 
the  security.  So  where  a  husband  became  the  assignee  of  a 
mortgage  executed  by  himself  and  wife  upon  her  separate 
real  estate,  he  was  allowed  to  foreclose  it  as  a  valid  and 
subsisting  lien.*  The  assignee  of  a  land  contract  may  also 
forclose  by  an  equitable  action  ;*  so  may  the  assignee  of  a 
**  title  bond,"  which  is  much  in  the  nature  of  an  ordinary 
land  contract.*  Mortgages  containing  a  power  of  sale  may 
be  enforced  by  an  assignee,  the  same  as  by  the  original 
mortgagee.* 

§  76.  Form  of  Assignment  to  enable  assignee  to 
foreclose. — The  form  of  the  assignment  should  be  in  writing, 
but  that  is  not  indispensable.  A  parol  assignment  will  give 
the  assignee  such  an  equitable  interest  in  the  mortgage  that 
he   can    maintain   a   foreclosure    in    his   own    name;*   and 


'  Gale  V.  Battin,    12   Minn.   287  ^  Mason  v,  Ainsworth,  58  111.  163 

(1867) ;  Bolles  v.  CarU,  12  Minn.  113  (1871) ;  Heath  v.  HaU,   60  Dl.   344 

(1866).  (1871) ;    seemingly    contra,   "Wilson 

'  Stoops  V.  Blackford,  27  Pa.  St.  v.  Spring,  64  111.  14  (1872) ;  Demp- 

213  (1856).  ster  v.  West,  69  lU.  613  (1873). 

»  Clark  V.  Wentworth,   6  Me.  (6  »  Slaughter  v.   Foust,   4  Blackf. 

Greenl.)  259  (1830).  (Ind.)  379  (1837) ;  Clearwater  v.  Rose, 

*  Faulks  V.  Dimock,  27  N.  J.  Eq.  1  Blackf.   (Ind.)  137  (1821) ;  Green 

(12  C.  E.  Gr.)  65  (1876).  v.  Marble,  37  Iowa,  95  (1873) ;  Pease 

«  Wright  v.Troutman,  81  El.  374  v.  Warren,  29  Mich.  9  (1874) ;  Den- 

(1876).      See    also    Hutchinson    v.  ton  v.  Cole,  30  N.  J.  Eq.  (3  Stew.) 

Crane,  100  Dl.  269  (1881).  244  (1878) ;  Andrews  v.  McDaniel, 

«  Semour  v.  Freeman,  Smith  (Ind.)  68  K  C.  385  (1873). 

25  (1848^9).  • 


88  ASSIGNOE    ATTD    ASSIGNEE   BOTH   PARTIES.        [§  77. 

mere  delivery  has  been  held  sufficient.'  But  in  such  cases 
the  assignor  has  been  held  a  necessary  party,'  and  it  would 
certainly  be  unsafe  to  omit  him.  In  Massachusetts  and 
Maine  a  parol  assignee  can  not  foreclose  in  his  own  name.* 
A  quit-claim  deed  from  a  mortgagee  has  been  held  to  work 
an  equitable  assignment  of  the  mortgage  to  a  grantee/  and 
in  Maine  it  seems  to  be  a  common  form  of  assignment. 

The  assignee  of  one  of  several  notes  or  bonds  secured  by 
a  mortgage,  may  foreclose  the  mortgage  in  his  own  name,* 
for  the  reason  that  by  the  assignment  of  the  note  he 
acquires  an  equitable  interest  in  the  mortgage,  and  pro  tanto 
becomes  an  assignee  of  the  mortgage.'  In  some  states  the 
courts  hold  that  the  assignee  of  a  note  acquires  only  a 
fro  rata'  interest  in  the  mortgage  security,  unless  the 
contract  of  assignment  otherwise  provides.*  But  all  courts 
are  agreed  that  the  assignee  obtains  such  an  interest  in 
the  mortgage  that  he  can  maintain  a  foreclosure  and  sale 
for  the  recovery  of  his  part  of  the  debt. 

§  77.  When  assignor  and  assignee  should  or  should 
not  both  be  parties. — It  is  not  necessary  for  the  assignee 


•Galway  v.  FuUerton,  17  N.   J.  Ohio  St.  419  (1863).     See  ;)<?«<  §§84, 

Eq.   (2  C.  E.  Gr.)  390  (1866).     See  85,  86,  and  notes. 

post  §§  90,  93.  6  Grattan  v.  Wiggins.  23  Cal.    16 

*  Denby  v.  Mellgrew,  58  Ala.  147  (1863) ;  Andrews  v.  Fiske,  101  Mass. 
(1877).  422  (1869) ;  Brown  v.   Delaney,  23 

»  Smith    V.    Kelly,    27    Me.    237  Minn.  349  (1876);  Chappell  v.  Allen, 

(1847);  Prescott  v.  Ellingwood,   23  38  Mo.  213(1866);  Anderson  v.  Baum- 

Me.    345  (1843) ;  Adams  v.  Parker,  gartner,  27  Mo.  80  (1858) ;  Page  v. 

78  Mass.  (12  Gray)  53  (1858).  Pierce,  26  N.  H.  (6  Post.)  317  (1853); 

*  Johnson  v.  Leonards,  68  Me.  237  Furbush  v.  Goodwin,  25  N.  H.  (5 
(1878);  Dixfield  v.  Newton,  41  Me.  Fost.) 425  (1852).  ^Qepost  §§84,  85, 
221  (185G);  Dorkay  v.  Noble,  8  Me.  (8  86. 

Greenl.)  278  (1882) ;  Carll  v.  Butman,  '  Smith  v.  Day,  23  Vt.  662  (1850) ; 

7Me.  (7GreenI.)102(1830);  Bullard  Belding    v.    Manley,     31    Vt.     550 

V.  Hinckley.    5  Me.    (5  Greenl.)  273  (1849) ;  Keyes  v.  Wood,  21  Vt.  331 

(1828) ;  Stewart  v.  Thompson,  3  Vt.  (1849) ;  Wright  v.    Parker,   2  Aik. 

255  (1831).  (Vt.)  212  (1827). 

'  Gower   v.    Howe,    20  Ind.    396  « Langdon   v.    Keith,    9    Vt.    299 

ri86H)  ;  Hough  V.  Osborne,    7  Ind.  (1837) ;  Wright  v.    Parker,   2  Aik. 

140  (18r.5)  :  Stanley  v.  Beatty,  4  lud.  (Vt.)  212  (1827).     Seei?c>s<  g§  84,  85, 

134  (1853)  ;  Johnson  v.  Candage,  31  86. 
Me.  2«   (1849) ;  Swartz  v.   Ltiist,  13 


§  77.]  PAETLES    ON  ABSOLUTE   ASSIGNMENT.  89 

to  join  his  assignor  with  him  as  a  co-plaintiff,  as  the  assignor 
no  longer  has  any  interest  in  the  bond  and  mortgage.  This 
is  also  true  where  it  is  the  assignor's  intention  simply  to 
authorize  the  assignee  to  collect  for  his  benefit  the  moneys 
secured  by  the  mortgage.*  Neither  is  it  necessary  to  make 
the  assignor,  under  either  of  such  circumstances,  a  party 
defendant  to  the  action ;'  but  if  an  answer  is  pleaded,  setting 
up  a  defence  growing  out  of  the  bond  and  niortgage  while 
in  the  hands  of  the  assignor,  the  assignee,  as  plaintiff,  may 
give  notice  of  the  action  to  his  assignor,  and  offer  to  him 
the  conduct  of  the  defence;  upon  his  giving  such  notice  the 
assignor  will  be  bound  by  the  judgment  in  the  action, 
whether  he  undertakes  the  defence  or  not." 

After  an  absolute  assignment,  the  suit  can  not  ordinarily 
be  prosecuted  by  the  assignee  in  the  name  of  the  mortgagee, 
for,  as  has  been  stated,  it  is  a  cardinal  principal  of  foreclosures 
that  they  must  be  brought  in  the  name  of  the  real  party  in 
interest.*  An  allegation  in  the  pleading  that  the  suit  is  for 
the  benefit  of  the  assignee  will  not  vary  the  rule  ;*  and 
where  an  assignment  authorized  the  assignee  "  to  foreclose 
or  release  the  mortgage  at  pleasure,"  the  mortgagee  was 
considered  such  a  necessary  party  to  a  foreclosure  that  the 
title  offered  at  the  sale  would  be  defective  without  him.* 


'  Christie  v.  Herrick,  1  Barb.  Ch.  was    allowed  to   foreclose  in  the 

(N.  T.)  254  (1845).  name  of  the  mortgagee,  and  against 

*  Thayer  v.  Campbell,  9  Mo.  377  his  will,  on  giving  him  an  indemni- 
(1845).     See  post  §  178.  fying  undertaking  against  costs  ami 

*  Andrews  v.  Gillespie,  47  N.  T.  damages.  See  ante  %%  7.3.  74,  aiirl 
487  (1872).  notes 

*  Graham  v.  Newman,  21  Ala.  *  Prior  v.  Wood,  31  Pa.  St.  143 
497  (1852) ;  Irish  v.  Sharp,  89  111.  (1858),  distinguished  in  Partridge  v. 
261  (1878) ;  Winkelman  v.  Kiser,  27  Partridge,  38  Pa.  St.  78  (1860),  where 
111.  21  (1861) ;  Pryor  v.  Wood,  31  the  assignment  was  defective  and  the 
Pa.  St.  143  (1858).  For  cases  holding  assignor  foreclosed  for  the  benefit 
that  the  suit  may  be  maintained  in  of  the  assignee.  See  Clow  v.  Derby 
the  name  of  the  mortgagee,  see  Coal  Co.,  98  Pa.  St.  433  (1881')  which 
Holmesv.  French,  70  Me.  341  (1879);  seems  contrary  in  practice  to  the 
Hurd  V.  Coleman,  42  Me.  183  (1856);  other  Pennsylvania  cases  cited.  See 
also  Gable  v.  Scarlett,  56  Md.  169  anU  §S  73.  74. 

(1881),  indicating  that  the    rule  is  *  Wright  v.  Sperry,  31  Wis.  3R1 

fixed  by  "statute.      In   Calhoun  v.  (1867). 
Tullass,  35  Ga.  119  (1866),  an  assignee 


90 


JOENT   MORTGAGEES. 


[§78. 


Where  foreclosure  is  conducted  by  the  process  of  scire 
facias,  it  can  not  be  in  the  name  of  the  assignee,  but  must 
always  be  in  the  name  of  the  original  mortgagee.' 

It  may  be  remarked  here  that  the  assignee  of  a  bond  and 
mortgage  takes  it  subject  to  the  equities  between  the 
original  parties,  and  to  the  equities  which  third  persons 
could  enforce  against  the  assignor."  The  assignee  can 
generally  acquire  no  better  title  than  his  assignor  possessed ;' 
but  the  rule  is  limited  where  the  mortgage  is  given  to  secure 
a  negotiable  note.*  For  these  reasons  it  is  often  prudent  to 
make  the  assignor  a  party  defendant.*  The  assignee  also 
takes,  and  may  enforce,  all  the  collateral  securities  which  his 
assignor  holds.* 

§  78.  Joint  mortagees ;  any  one  or  more  may  fore- 
close.— Where  a  bond  and  mortgage  have  been  executed 
or  assigned  to  two  or  more  persons  jointly,  or  are  held  by 
them  in  any  way  jointly,  they  may  unite  as  co-plaintiffs  in  a 


»  Bourland  v.  Kipp,  55  111.  376 
(1870)  ;  Camp  v.  Small,  44  111.  37 
(1867) ;  Olds  v.  Cummings,  31  111. 
188  (1863). 

*  Greene  v.  Warnick,  64  N.  T. 
220  (1876),  reversing  4  Hun  (K  Y.) 
703  ;  Trustees  of  Union  College  v. 
Wheeler,  61  N.  Y.  88,  99,  104  (1874), 
(opinion  per  Theodore  W.  Dwight, 
C,  collating  and  reviewing  the 
authorities  at  length) ;  affirming  5 
Lans.  (N.  Y.)  160  ;  s.  c.  59  Barb.  (N. 
Y.)  585.  Schafer  v.  Reilly,  50  N.  Y. 
61  (1872) ;  Ingraham  v.  Disborough, 
47  N.  Y.  421  (1872).  See  Crane  v. 
Turner,  67  N.  Y.  437  (1876),  and 
Davis  V.  Bechstein,  69  N.  Y.  440,  442 
(1877),  per  Church,  Ch.  J. 

»  Kamena  v.  Huelbig,  23  N.  J. 
Eq.  (8  C.  E.  Gr.)  78  (1872) ;  Rose  v. 
Kimball,  If  N.  J.  Eq.  (1  C.  E.  Gr.) 
185  (1863) ;  Woodruff  v.  Depue,  14 
N.  J.  Eq.  (1  McCart.)  168  (1861). 
This  proposition  was  questioned  as 
to  a  boTiafide  purchaser  for  a  valuable 
consideration  by  Comstock,  J.,  in 


McLallen  v.  Jones,  20  N.  Y.  163 
(1859).  See  Bush  v.  Lathrop,  22  N. 
Y.  535,  537,  550  (1860),  per  Denio, 
J.,  who  examined  and  repudiated 
the  supposed  distinction  between 
"latent"  equities,  so  called,  and 
those  existing  between  the  original 
parties  to  the  instrument ;  but  this 
case  was  overruled  in  Moore  v. 
Metropolitan  Nat.  Bank,  55  N.  Y. 
41,  49  (1873),  opinion 'per  Grover,  J.; 
Allen,  J,,  dissented.  See  also  the 
later  cases  cited  above.  Lee  v.  Kirk- 
patrick,  14  N.  J.  Eq.  (1  McCart.) 
264  (1862).  In  Mott  v.  Clark,  9  Pa. 
St.  399  (1848),  it  was  held  that 
the  assignee  did  not  take  subject  to 
the  latent  equities  of  third  persons. 
See  Atwater  v.  Underbill,  22  N.  J. 
Eq.  (7  C,  E.  Gr.)  599  (1872.) 

*  Carpenter  v.  Longan,  83  U.  S. 
(16  Wall.)  271  (1872) ;  bk.  21  L.  ed. 
313. 

'  See  post  %  178  et  aeq. 

*  Philips  v.  Bank  of  'Lewistown, 
18  Pa.  St.  394  (1852). 


§  79.]  JOINT  MOETGAQEES.  91 

foreclosure ;  or  any  one  or  more  of  them  may  maintain  the 
action  without  joining  the  others  as  co-plaintiffs.'  A  joint 
foreclosure  has  been  allowed  where  the  mortgage  was  joint 
in  form,  but  given  to  secure  different  debts  in  severalty."  It 
is  quite  well  settled  that  in  such  cases  all  the  parties 
interested  in  the  mortgage  must  be  brought  before  the  court 
as  plaintiffs  or  defendants  ;*  so,  in  an  action  to  redeem,  all 
the  mortgagees  are  necessary  parties.*  Where  a  note  and 
mortgage  had  been  executed  by  thirteen  persons  to  three  of 
their  number,  the  three  were  allowed  to  foreclose  against 
the  other  ten  for  ten-thirteenths  of  the  debt.*  But  before 
any  person  who  is  jointly  interested  with  others  in  a 
mortgage  debt  can  be  made  a  defendant,  he  must  be 
requested  to  unite  as  a  co-plaintiff/ 

§  79.  Same  rule — Joint  mortgagees  in  representative 
capacity. — The  same  rules  hold  true  when  the  joint  mort- 
gagees hold  the  mortgage  in  a  representative  or  official 
capacity.  A  mortgagee,  by  his  will,  appointed  his  mortgagor 
and  another  person  his  executors;  the  second  executor  was 
entitled  to  foreclose  against  his  co-executor,  the  mortgagor, 
making  him  a  defendant  individually  and  as  executor,  upon 
the  principle  that  one  co-executor  may  maintain  an  action 
in  equity  against  another  co-executor  to  compel  the  payment 
of  a  debt  owing  by  him  to  the  estate.*  A  mortgagee  may 
also  foreclose,  though  he  has  with  others  been  made  an 
assignee  of  the   mortgagor  for  the  benefit   of  creditors.* 


*  Paton  V,  Murray,  6  Paige  Ch.  closiire,  it  is  not  necessary  to  bring 

(K.  Y. )  474  (1837);    Sanford    v.  the  others  into  the  action.    See  on^ 

Bulkley,  30  Conn.  344  (1862);  Baker  §  70. 

V.    Shephard,  80   Ga.  706   (1860) ;  *  Woodward  v.  "Wood,  19  Ala.  318 

Hopkins  V.  Ward,  12  B.  Men.  (Ky.)  (1851). 

185  (1851) ;   Gleises  v.  Maignan,  3  »  McDowell  v.  Jacobs,  10  CaL  887 

La.  530  (1832) ;  Brown  v.  Bates,  55  (1858). 

Me.  520  (1868).  «  See  ante  §  72 ;  N.  T.  Code  Clr. 

«  Shirkey  v.    Hanna,    3   Blackf .  Proc.  §  448. 

(Ind.)  403  (1834).  ■»  McGregor  v.  McGregor,  35  N. 

'Hopkins  v.  Ward,  12  B.  Men.  Y,218  (1866);  Lawrence  v.  Lawrence, 

(Ky.)  185  (1851) ;  seemingly  contra,  3  Barb.  Ch.  (N.  T.)  71  (1848). 

Piatt  V.  Squire,  53  Mass.  (12  Mete.)  *  Paton  v.  Murray,  6  Paige  Ch. 

494,  501  (1847),  holding  that  where  (N.  Y.)  474  (1837). 
one  joint  mortgagee  begins  a  fore- 


92  PARTNERS JOINT   MORTGAGEES.       [§§  80-81. 

And  the  fact  that  a  person  owns  an  undivided  part  of 
certain  premises,  and  at  the  same  time  holds  a  mortgage 
on  another  undivided  part,  will  not  prevent  his  foreclosing.* 

§  80.    Partners  ;    any  one  or  more   may  foreclose. — 

Partners  may  unite  in  the  foreclosure  of  a  mortgage  held  by 
them  as  a  part  of  their  joint  capital,  or  any  one  of  them 
may  bring  the  action  as  sole  plaintiff.  If  any  of  the  part- 
ners refuse  to  join  as  co-plaintiffs,  the  courts  generally 
require  them  to  be  brought  in  as  defendants  ;  but  it  must 
appear  in  the  pleadings,  and  be  a  fact,  that  the  co-partners 
have  refused  to  become  co-plaintiffs,  before  they  can  be 
made  defendants  to  the  action.*  Even  where  a  mortgage 
was  executed  to  one  member  of  a  co-partnership  to  secure 
a  partnership  debt,  all  the  partners  were  deemed  necessary 
parties  to  an  action  for  foreclosure."  It  would  seem,  how- 
ever, that  if  a  mortgage  is  held  by  one  of  the  partners  as  a 
trustee  for  the  partnership,  he  can  foreclose  without  in  any 
way  bringing  the  other  partners  into  the  action.*  In  case 
of  the  death  of  a  partner  pending  foreclosure,  a  bill  of 
revivor  against  his  personal  representatives  is  unnecessary, 
the  survivors  taking  the  entire  legal  title  to  the  bond  and 
mortgage  under  the  doctrine  of  survivorship  in  joint 
tenancy.* 

§  81.  Joint  mortgagees,  one  dying ;  doctrine  of  sur- 
vivorship.— It  seems  quite  well  established  that  the  doctrine 
of  joint  tenancy  and  survivorship,  as  applied  to  the  tenure  of 
lands,  is  also  applicable  to  the  joint  ownership  of  choses 
in  action,  including  mortgages.  In  People  v.  Keyser,* 
Selden,  J.,  says:  "There  was  never  any  doubt  that  the 
entire  legal  interest  remained  in  the  survivor.      The  only 


>  Baker  v.  Shephard,  30  Ga.  706  *  Shelden  v.  Bennett,    44   Mich. 

(1860) ;    Gleises  v.  Maignan,  3  La.  634  (1880). 

530  (1832).  »  Roberts  v.  Stigleman,  78  lU.  120 

«  N.  Y.  Code  Civ.   Proc.   §  448  ;  (1875).     See  post  §  81. 

Jewell  V.  West  Orange,  36  N.  J.  Eq.  «  28  N.  Y.  226,  236  (1863),  citing 

(9  Stew.)  403  (1883).  1   Cbitty    on    Pleading,    19,  20;   2 

3  DeGreiff   v.    Wilson,  30  N.    J.  Fonbl.  Eq.  103,  and  notes  ;  Rolls  v. 

Eq.  (3  Stew.)  435  (1879)  ;  Noyes  v.  Yate,  Yelv.  177  (1611),  note  1. 
Sawyer,  3  Vt.  100^1831). 


§  81.]  JOINT   MORTGAGEES — SURVIVORSHIP.  93 

doubt  was,  whether  the  survivor  did  not  take  the  whole 
interest,  legal  and  equitable,  according  to  the  rule  of  sur- 
vivorship applied  to  a  joint  tenancy  in  lands ;  but  it  was 
finally  held,  the  case  of  Petty  v.  Styward,'  being  the  leading 
case,  that,  although  the  entire  legal  interest  vested  in  the 
survivor,  he  was  to  be  regarded  in  equity  as  a  trustee  for 
the  personal  representatives  of  deceased  parties  for  their 
equal  shares."  It  is  also  well  settled  that  upon  the  death 
of  a  partner,  the  surviving  partners  take  the  legal  title  to 
the  property  of  the  partnership  for  the  purpose  of  settling 
its  affairs. 

The  courts  have  accordingly  deduced  the  rule  that  upon  the 
death  of  one  of  a  number  of  joint  owners  of  a  mortgage, 
the  surviving  owners  can  foreclose  it  without  bringing  the 
personal  representatives  or  heirs  of  the  deceased  joint 
mortgagee  into  the  action.*  It  has  been  explicitly  held, 
that  "  a  suit  upon  a  mortgage  to  obtain  a  foreclosure,  may 
be  brought  and  maintained  by  the  surviving  mortgagee."' 
Where  a  mortgage  had  been  executed  to  a  husband  and 
wife,  she  was  allowed  to  foreclose  upon  his  death,  without 
bringing  his  personal  representatives  into  the  action.* 
There  can  be  no  harm,  however,  in  making  the  personal 
representatives  of  a  deceased  joint  mortgagee  parties 
defendant  to  the  action,  for,  if  a  contest  as  to  the  ownership 
of  the  mortgage  should  arise,  they  would  then  be  conclu- 
ded by  the  decree  of  foreclosure  ;*  furthermore,  they  have 


» 1  Eq.  Cas.  Abr.  290.  (1868).     See   also   Kinsley  ▼.  Ab- 

•  Erwin  v.  Ferguson,  5  Ala.  158  bott,  19  Me.  430,  433,  opinion  par 

(1843) ;  Milroy  v.  Stockwell,  1  Ind.  Shipley,  J.    In  Penn  v.   Butler,  4 

85  (1848) ;  Lannay  v.  Wilson,  30  Md.  U.  S.  (4  Dall.)  354  (1801)  ;  bk.  1  L. 

636  (1860) ;   Blake   v.   Sanbom,  74  ed.  864  ;  the  court  say  that  the  sur- 

Mass.  (8  Gray)  154  (1857) ;  Martin  v.  viving  obligee  and  mortgagee  "was 

McReynolds,    6    Mich.    70  (1858);  entitled  to  the  possession  of  the  joint 

McAllister  v.   Plant,  54  Miss.   106  securities,  and  that  he  might  recover 

(1876) ;  Hansen  v.  Gregg,  7  Tex.  225  their  amount." 

(1851).  See  post  §§  103, 105.    Contra,  *  Lannay  v.  Wilson,  30  Md.  536 

Fisher  on  Mortgages,  §  361 ;  Vick-  (1869);  McMillan  y.  Mason,  5  Coldw. 

crs  V.    CoweU,  1  Beav  529  (1839) ;  (Tenn.)  263  (1868). 

Mutual  Life  Lis.  Co.  v.  Sturges,  32  *  Freeman  v,  Scofield,    16  N.  J. 

N.  J.  Eq.  (5  Stew.)  678,  683  (1880).  Eq.  (1  C.  E.  Gr.)  28  (1868). 
»  Williams  v.  HUton,  35  Me.  547 


94  MOETGAGEES  IN  SEVERALTY.     [§§  82-83. 

an  equitable  interest  in  the  proceeds  of  the  foreclosure,  a 
portion  of  which  must  ultimately  come  into  their  hands  for 
distribution. 

§  82.  When  personal  representatives  of  deceased 
joint  mortgagee  necessary  parties. — In  New  Jersey  the 
personal  representatives  of  a  deceased  joint  mortgagee  are 
considered  indispensable  parties  to  a  foreclosure  by  the 
survivors;'  they  may  be  united  as  co-plaintiffs  or  made 
defendants.'  And  where  a  personal  representative  com- 
mences the  action,  the  joint  survivors  are  necessary  parties. 
Thus,  where  a  mortgage  had  been  executed  to  a  husband 
and  wife,  and  after  the  husband's  death  foreclosure  was 
brought  by  the  assignee  of  his  administrator,  the  widow 
was  held  erroneously  omitted.*  The  rules  of  this  section 
apply  also  to  the  joint  assignees  of  a  mortgage  ;  and,  indeed, 
to  joint  owners  generally,  whatever  may  have  been  the 
source  of  their  title  to  the  mortgage.* 

§83.  Mortgagees,  owners  in  severalty;  any  one  or 
more  may  foreclose. — ^Any  one  or  more  of  a  number  of 
owners  of  a  mortgage,  each  of  whom  holds  a  specific  interest 
therein  in  severalty,  may  bring  an  action  to  foreclose  the 
mortgage,  making  defendants  such  other  owners  as  do  not 
consent  to  become  co-plaintiffs  ;*  likewise  all  the  owners  may 
unite  as  co-plaintiffs.*  Where  a  mortgage  is  owned  in 
severalty,  it  is  indispensable  that  all  the  interests  be  repre- 
sented in  an  action  to  foreclose.*  And  even  though  debts 
in  severalty  be  secured  by  a  joint  mortgage,  any  creditor 
may  maintain  a  foreclosure,  as   in  the  case  of  a  several 


'  Mutual  Life  Ins.  Co.  v.  Sturges,  »  Porter  v.  Clements,  3  Ark.  864, 

82  N.  J.  Eq.  (5  Stew.)  678,  683  (1880),  880  (1839),   where  the  question  of 

explaining  the  reason  for  the  rule,  parity  of  interest  in  the  action  is 

and    following   Freeman    v.   Scho-  considered    at   length ;    Brown   v. 

field,  16  N.  J.  Eq.  (1  C.  E.  Gr.)  28  Bates,  55  Me.  520  (1868). 

(1863).  •  Stevenson  v.  Mathers,  67  HI.  128 

'  Freeman  v.  Scofield,   16  N.   J.  (1873),  where  the  action  was  to  for»- 

Eq.  (1  C.  E.  Gr.)  28  (1863).  close  a  land  contract. 

8  Savings  Bank  v.  Freese,  26  N.  '  Nashville  «&  D.  R.  R  Co.  v.  Orr, 

J.  Eq.  (11  C.  E.  Gr.)  453  (1875).  85  U.  S.  (18  Wall.)  471  (1873)  ;  bk. 

*  Martin  v.  McReynolds,  6  Mich.  21  L.  ed.  810. 
70  (1858), 


§  84.J        MORTGAGEES  IN  SEVERALTY.  95 

mortgage,  but  the  other  creditors  are  absolutely  necessary 
parties  as  co-plaintiffs  or  defendants ;'  a  joint  bill  for  fore- 
closure is  also  allowable.*  Upon  the  death  of  any  of  the 
owners  in  severalty,  his  personal  representatives  must  be 
brought  before  the  court.*  The  decree  for  foreclosure  should 
be  for  the  payment  to  the  several  owners  of  the  sums 
respectively  due  to  each.*  Where  mortgagees  hold  separate, 
but  contemporaneous  and  equal  mortgages,  they  may  unite 
as  co-plaintiffs,  or  any  one  may  foreclose,  making  the  others 
defendants,  as  though  there  was  but  one  mortgage  in  which 
they  held  their  interests  in  severalty.* 

§  84.  Owner  of  one  of  several  notes  secured  by  a 
mortgage  may  foreclose. — In  most  of  the  Western  and  in 
some  of  the  Eastern  states,  notes  with  interest  coupons, 
instead  of  a  bond,  are  given  as  the  instrument  of  indebted- 
ness. In  order  to  facilitate  their  negotiability  as  investments, 
a  number  of  notes  are  often  given  instead  of  one.  In  these 
states  numerous  decisions*  have  been  rendered,  fixing  the 
legal  status  of  such  notes,  and  the  remedies  and  procedure 
of  owners  for  their  collection.  As  the  general  result  it  may 
be  stated  that  an  action  at  law  may  be   maintained   by 


»  See  Tyler  v.  Treka  Water  Co.,  (1854) ;  Goodall  v.  Mopley,  45  Ind. 

14  Cal.  212  (1859) ;  ^toa  Life  Ins.  355  (1873) ;  Merritt  v.  WeUs,  18  Ind. 

Co.  V.  Finch,  84  Ind.  301  (1882) ;  171  (1862) ;  Stanley  v.  Beatty,  4  Ind. 

Moffltt  V.  Roche,  76  Ind.  75  (1881);  134  (1858) ;  Barrett  v.  Blackmar,  47 

Howe  V.  Dibble,  45  Ind.  120  (1873).  Iowa,  569  (1877)  ;  Lyster  v.  Brewer, 

See  anfe§  78.  13  Iowa,  461   (1862);  Sangster   v. 

•  Shrrkey  v.  Hanna,  3  Blackf.  Love,  11  Iowa,  580  (1861) ;  Rankin 
Ind.  403  (1834).  v.  Major,  9  Iowa,  297  (1859) ;  Swen- 

«  Burnett  V.  Pratt,  39  Mass.  (23  son  v.  Moline  Plow  Co.,  14  Kan.  387 

Pick.)  556  (1839) ;   Vickers  v.  Co-  (1875) ;  Jenkins    v.  Smith,  4  Met. 

well,  1  Beav.   529  (1889) ;  Fisher,  (Ky.)  380  (1868) ;  Bell  v.  Shrock,  3 

on  Mortgages,  §§  349,  361,  B.  Mon.  (Ky.)  29  (1841) ;  Jordon  v. 

•  Higgs  V.  Hanson,  13  Nev.  356  Cheney,  74  Me.  359  (1883) ;  Moore 
(1878).                        .  V.  Ware,  38  Me.  496  (1854) ;  Johnson 

» Cochran  v.  Goodell,  131  Mass.  v.    Candage,    31   Me.    28    (1849) ; 

464  (1881).     See  post  §§  99,  184.  Haynes  v.  Wellington,  25  Me.  458 

•  HartweU  v.  Blocker,  6  Ala.  581  (1845) ;  Johnson  v.  Brown,  31  N.  H. 
(1844) ;  Wilson  v.  Hay  ward,  2  Fla.  405  (1855) ;  Wiley  v.  Pinson,  23  Tex. 
27  (184'8);  Myers  V.  Wright,  33111.  486  (1859);  Pettibone  v.  Edwarda, 
284  (1864) ;  Pogue  v.  Clark,  25  111.  15  Wis.  95  (1862). 

851  (1861) ;  Ross  v.  Utter,  15  111.  403 


96  SEVEEAL   NOTES    SECURED    BY   MORTGAGE.       [§  85. 

the  holder  of  any  note  as  upon  an  ordinary  promissory  note. 
Or,  the  holder  of  any  one  of  a  number  of  the  notes 
may  proceed  in  the  first  instance  by  a  suit  in  equity,  as  in  an 
ordinary  foreclosure ;  but  he  must  bring  all  the  other 
mortgagees  and  holders  of  notes  secured  by  the  mortgage 
into  court,  before  a  decree  can  be  made.'  It  is  peculiar  that 
two  holders  of  notes  can  not  join  as  plaintiffs ;  each  one 
holds  an  interest  in  the  mortgage  pro  tanto  for  his  own  note. 
But  where  one  person  holds  two  or  more  notes,  he  may 
foreclose  them  in  the  same  action ;'  in  New  Hampshire 
on  the  other  hand,  foreclosure  by  a  writ  of  entry  can  not  be 
maintained  unless  all  the  holders  of  notes  unite  as  plaintiffs,' 
and  then,  it  would  seem,  only  after  all  the  notes  have 
become  due.* 

§  85.  All  owners  of  notes  necessary  parties— Payable 
in  order  of  maturity. — All  holders  of  notes  must  be  brought 
into  the  action,*  so  that  the  amounts  and  priorities  of  their 
several  claims  may  be  determined,  for  it  is  another  peculiar- 
ity of  these  notes  in  some  states,  that  they  are  entitled  to 
payment  in  the  order  in  which  they  fall  due,  and  their 
respective  priorities  as  liens  on  the  mortgaged  premises 
follow  the  same  order.  This  rule  obtains  in  Alabama,* 
Florida,'    Illinois,'    Indiana,'    Iowa,"    Kansas,"    Missouri," 


•  King  V.  Merchants'  Exchange  that  they  might  come  in  on  their  own 
Co.,  5  N.  Y.  547,  556  (1851) ;  Pugh  motion.  But  see  the  later  cases  of 
V.  Hclt,  27  Miss.  461  (1854) ;  Archer  Mitchell  v.  Ladew,  36  Mo.  526 
V.  Jones,  26  Miss.  583  (1853).  See  (1865),  approved  and  followed  in 
also  the  cases  cited  in  the  first  note  Hurck  v.  Erskine,  45  Mo.  484  (1870) ; 
to  the  section.  Thompson  v.   Field,    38   Mo.    320 

•  Myers  v.  Wright,  33  HI.  284  (1866) ;  Mason  v.  Barnard,  36  Mo. 
(1864).     See  anU  §  83.  384  (1865). 

«  Noyes  v.  Barnet,  57  N.  H.  605  *  Bank  of  Mobile  v.  Planters'  and 

(1876).  Merchants'  Bank,  9  Ala.  645  (1846); 

•  Hunt  V.  Stiles,  10  N.  H.  466  McVay  v.  Bloodgood,  9  Port.  (Ala.) 
(1839).  547  (1839),  explained  in  Cullum  v. 

•  Myers  v.   Wright,    33  111.    284  Erwin,  4  Ala.  452  (1842). 

(1864).    See  §§  84  and  86,  and  cases  '  Cotton  v.  Blocker,  6  Fla.  1  (1855). 

cited.   In  Thayer  v.  Campbell,  9  Mo.  '  Humphreys  v.  Morton,  100  lU. 

277  (1845),   It   was   held   that   the  692  (1881) ;  Koester  v.  Burke,  81  111. 

holders    of   other   notes    were  not  436  (1876);  Herrington  v.  McCollum, 

necessary  parties  to  the  action,  but  73  HI.  476  (1874);  Flower  v.  Elwood« 


§  8 5. J      NOTES   PAYABLE   IN   ORDEE    OF  MATURITY. 


97 


New  Hampshire,'  Ohio,'  Virginia,  West  Virginia  and 
Wisconsin.*  The  principle  upon  which  it  proceeds  is 
potior  in  tempore,  potior  in  jure.  Justice  Walker  in  Preston 
V.  Hodgen,*  concisely  stated  the  rule  adopted  in  these 
states :  "  The  assignment  of  each  note  operates  as  an 
assignment  pro  tanto  of  the  mortgage,  and  by  each  assign- 
ment it,  in  effect,  becomes  so  many  separate  mortgages  to 
secure  the  several  notes  in  the  order  of  their  maturity."  But 
where  all  the  notes  mature  at  the  same  time,  they  are  equal 
liens;*  and  if,  by  the  terms  of  the  notes  and  mortgage, 
default  in  the  payment  of  the  first  note  or  of  the  interest, 
when  due,  renders  all  the  notes  due  and  payable,  they 
become  equal  liens  upon  default,  and  are  payable  pro  rata 
instead  of  pro  tanto  from  the  proceeds  of  a  sale/ 


66  ni.  438  (1872);  Preston  v.  Hodgen, 
50  111.  56  (1869);  Funk  v.McReynolds, 
83  HI.  481  (1864). 

•Gerber  v.  Sharp,  72  Ind.  653 
(1880);  Doss  v.  Ditmars,  70  Ind.  451 
(1880) ;  Evansville  People's  Sav. 
Bank  v.  Finney,  63  Ind.  460  (1878) ; 
Sample  v.  Rowe,  24  Ind.  208  (186^; 
Murdock  v.  Ford,  17  Ind.  52  (1861); 
Hough  V.  Osborne,  7  Ind.  140  (1855), 
followed  in  Harris  v.  Harlan,  14  Ind. 
439  (1860);  Stanley  v.  Eeatty,  4  Ind. 
134  (1853) ;  State  Bank  v.  Tweedy, 
8  Blackf .  (Ind.)  447  (1847). 

'"  Walker  v.  Schreiber,  47  Iowa, 
529  (1877),  and  the  cases  cited  in  the 
preceeding  section. 

"  Richardson  v.  McEim,  20  Ean. 
346(1878). 

»  Hurck  V.  Erskine,  45  Mo.  484 
(1870) ;  Thompson  v.  Field,  88  Mo. 
320  (1866);  MitcheU  v.  Ladew,  86 
Mo.  526  (1865);  Mason  v.  Barnard, 
86  Mo.  384  (1865). 

1  Noyes  v.  Bamet,  57  N.  H.  605 
(1876) ;  Johnson  v.  Brown,  31 N.  H. 
405  (1855) ;  Hunt  v.  Stiles,  10  N.  H. 
466  (1839). 

« Winters  v.  Bank,  83  Ohio  St. 
250  (1877);  Bushfleld  v.  Meyer, 
10  Ohio  St  834  (1859) ;   Bank  of 


United  States  v.  Coveit,  18  Ohio, 
240  (1844). 

•Pierce  v.  Shaw,  51  Wis,  816 
(1881);  Marine  Bank  v.  International 
Bank,  9  Wis.  57  (1859) ;  Wood  v. 
Trask,  7  Wis.  666  (1859). 

*  50  m.  56.  59  (1869) ;  Gerber  v. 
Sharp,  72  Ind.  553  (1880),  and  cases 
cited ;  Murdock  v.  Ford,  17  Ind.  52 
(1861).  See  also  Smith  v.  Stevens, 
49  Conn.  181  (1881).  In  Sargent  v. 
Howe,  21  lU.  148  (1859),  A.  executed 
three  notes  to  B.  and  conveyed 
property  in  trust  to  0.  to  secure 
their  payment ;  B.  assigned  two  of 
the  notes  to  D.  It  was  held  that 
the  assignment  carried  the  security 
with  it  as  an  incident  to  the  debt, 
and  that  D.,  by  an  equity  action, 
coiild  compel  the  trustee  to  sell 
enough  of  the  property  to  pay  his 
notes.  The  assignment  in  such  cases 
is  1^0  tomto,  not  pro  rata  ;  the  notes 
must  be  paid  in  the  order  in  which 
they  mature,  as  they  have  priority 
as  Uens  in  that  order.  See  Yansant 
V.  Allmon,  23  111.  80,  84  (1859). 

» Humphreys  v.  Morton,  100  HL 
592  (1881). 

•  Grattan  v.  Wiggins,  28  Cal.  16 
(1863) ;  Phelan  v.  Olney,  6  Cal.  478 

(7) 


98 


NOTES  PAYABLE  PKO  RATA. 


[§86. 


§  86.    Notes  payable  pro  rata  in  New  York  and  some 

other  states. — But  in  New  York,'  New  Jersey,'  Pennsyl- 
vania," Minnesota,"  Michigan,*  Mississippi,"  Kentucky,'  and 
Vermont'  the  rule  has  been  adopted  that  bonds  and  notes, 
maturing  at  different  times  and  secured  by  a  single  mortgage, 
are  equal  and  concurrent  liens  and  entitled  to  the  security /r<? 
rata.  In  a  recent  case  in  New  York,*  where  mortgages  were 
simultaneously  executed  and  recorded,  but  matured  at 
different  times,  Judge  Finch,  of  the  Court  of  Appeals, 
decided  that  the  one  falling  due  first  had  no  priority  of 
lien ;  and,  after  collating  and  reviewing  the  cases  in  the 
Western  States,  disapproved  the  proposition  established 
in  so  many  of  them,  that  different  obligations  maturing 
at  different  times  have  priority  of  security  according  to  the 
order   of   their   maturity.     Whichever  rule  is  adopted,  all 


(1856) ;  Winters  v.  Bank,  33  Ohio 
St.  250  (1877) ;  Bushfield  v.  Mayer, 
10  Ohio  St.  334  (1859),  supported 
in  p')int  by  Bank  of  United  States 
V.  Covert.  13  Ohio,  240  (1844); 
Pierce  v.  Shaw,  51  Wis.  316  (1881). 
Contra,  holding  that  the  notes  must 
be  paid  in  the  order  of  their  maturity, 
Hurck  V.  Erskine,45  Mo.  484  (1870) ; 
Mason  V.  Barnard,  36  Mo.  384  (1865). 

»  Granger  v.  Crouch,  86  N.  Y. 
494.  499  (1881) ;  Bridenbecker  v. 
Lowell,  32  Barb.  (N.  Y.)  9  (1860). 

>  CoUerd  v.  Huson,  34  N.  J.  Eq. 
(7  Stew.)  38  (1881).  See  the  note  to 
the  case,  giving  a  full  collation  of 
authorities. 

3  Perry's  Appeal,  22  Pa.  St.  43 
(1853),  where  four  bonds  and  mort- 
gages, simultaneous  in  execution  and 
record,  but  due  in  successive  years, 
were  held  to  be  equal  liens  and  to 
Bhare  pro  rata  ;  cases  collated.  The 
rule  was  also  applied  where  all  the 
bonds  matured  at  the  same  time. 
Hodge's  Appeal,  84  Pa.  St.  359 
(1877). 

*  Wilson  V.  Eigenbrodt,  30  Minn. 
4  (1882).     See  the  able  and  ingenious 


opinion  of  Mitchell,  J.,  holding  this 
to  be  the  rule  for  Minnesota  unless  a 
contract  to  a  different  effect  is  ex- 
pressed in  the  mortgage. 

»  Wilcox  V.  Allen,  36  Mich.  160 
(1877) ;  McCurdy  v.  Clark,  27  Mich. 
445  (1873). 

•  Trustees  Jefferson  College  v. 
Prentiss,  29  Miss.  46  (1855) ;  Bank 
of  England  v.  Tarleton,  23  Miss.  173 
(1851) ;  Henderson  v.  Herrod,  18 
Miss.  (10  Smed.  &  M.)  631  (1846) ; 
Dick  V.  Mawry,  17  Miss.  (9  Smed. 
&  M.)  448  (1848) ;  Terry  v.  Woods, 
14  Miss.  (6  Smed.  &  M.)  139  (1846)  ; 
Cage  V.  Her,  13  Miss.  (5  Smed.  & 
M.)  410  (1845) ;  Parker  v.  Mercer,  7 
Miss.  (6  How.)  320  (1842). 

'  Campbell  v.  Johnston,  4  Dana 
(Ky.)  182  (1836). 

8  Belding  v.  Manly,  21  Vt.  550 
(1849) ;  Keyes  v.  Wood,  21  Vt.  831 
(1849);  Wright  v.  Parker,  2  Aik. 
(Vt.)  212  (1827). 

9  Granger  v.  Crouch,  86  N.  Y. 
494,  499  (1881) ;  in  point  and  similar, 
Collerd  v.  Huson,  34  N.  J.  Eq.  (7 
Stew.)  38  (1881).     See^os^  §99. 


§§  87-88.]  MORTGAGE  ASSIG^OH)  COLLATEEALLT.  99 

holders  of  notes  and  bonds  are  indispensable  parties  to 
a  foreclosure  of  the  mortgage,  in  order  to  produce  a  perfect 
title  at  the  sale.  It  may  be  observed  here  that  questions 
affecting  the  rights  of  holders  of  bonds  given  with  railroad 
mortgages  are  not  within  the  scope  of  this  work,  and 
the  reader  is  referred  to  text-books  treating  specially  of 
railway  securities  and  kindred  subjects.* 

§  87.  Owner  of  mortgage,  having  pledged  the  same 
as  collateral  security,  may  foreclose. — Where  the  owner 
of  a  mortgage  has  pledged  it  as  collateral  security  for  a  debt  of 
less  amount  than  the  mortgage,  he  still  has  such  an  interest 
in  it  as  entitles  him  to  bring  an  action  for  the  foreclosure  of 
the  mortgage.  Vice-chancellor  McCoun  held,  in  Norton  v. 
Warner,^  that  "  the  complainant  had  not  divested  him.self  of 
all  interest  in  or  control  over  the  mortgage.  The  assign- 
ment is  but  a  partial  one,  made  to  secure  to  the  pledgee 
the  payment  of  a  loan,  being  less  than  the  amount  due  on  the 
mortgage.  In  equity,  he  is  still  the  owner,  subject  only 
to  the  lien  or  pledge  for  the  loan.  The  pledgee  might  have 
filed  a  bill  of  foreclosure  against  the  original  mortgagor  and 
all  parties  in  interest,  and  in  that  case  the  pledgee  would 
have  been  deemed  a  trustee  for  the  mortgagee,  for  the 
whole  mortgage  debt  after  satisfying  his  claim  ;  and  upon 
the  pledgee's  refusal  to  proceed — and  which  the  bill  alleges 
— I  see  no  good  reason  why  the  complainant  might  not 
proceed,  as  he  has  done,  to  foreclose." 

§  88.  Pledgee  necessary  party — Mortgage  collater- 
ally assigned. — But  in  such  an  action  the  pledgee  is  a 
necessary  party,^  and  may  be  made  a  co-plaintiff,*  or  a 
defendant ;  neither  the  mortgagor,  nor  any  person  other  than 


J  Jones  on  Railway  Securities.  40  Vt.  672  (1868);  Brunette  v.  Schett- 

2  3  Edw.  Ch.  (N.  Y.)  106  (1837) ;  ler,  21  Wis.  188  (1866).     See  post 

Simson  v.  Satterlee,   64  N.  T.  657  §§89,  181,  182. 

(1876),  affirming  6  Hun  (N.  Y.)  305.  'Plowman   v.    Riddle,    14   Ala. 

In  point  Sinking  Fund  Com'rs  v.  169(1848).     See  post  %%  181,  182. 

Northern   Bank,  1  Mete.  (Ky.)  174  *  Hoyt  v,  Martense,  16  N.  Y.  231 

(,1858) ;  McKinney  v.  Miller,  19  Mich.  (1857). 

142  (1869) ;  George  v.   Woodward, 


lUO  ASSIGNEE    OB    PLEDGEE    DEFENDANT.  [§  88. 

the  assignee  himself,  can  object  that  he  is  made  a  defendant.* 
And  if  the  assignee,  or  pledgee,  refuses  to  become  a  co- 
plaintiff  upon  the  request  of  the  mortgagee,  he  can  not 
himself  object  that  he  is  made  a  defendant  to  the  action  ;*  it 
should  be  alleged  in  the  complaint,  however,  that  he  has 
refused  to  join  as  a  co-plaintiff.  If  an  objection  is  made  at 
all,  it  must  be  by  demurrer  or  answer,  or  the  alleged  defect 
will  be  considered  waived  at  the  trial.'  The  rule  of  this 
section  is  in  accordance  with  the  general  principle  that  all 
parties  interested  in  the  mortgage  debt  must  be  before  the 
court,  or  the  decree  of  foreclosure  will  not  extinguish  their 
interests.  Equity  courts  are  not  particular  as  to  how  parties 
come  before  them,  so  long  as  all  persons  interested  in  the 
subject-matter  of  the  action  are  brought  within  their  juris- 
diction, so  that  a  complete  determination  can  be  made  of 
the  rights  of  all  the  parties  interested.  It  is  indispensable 
that  the  pledgee,  and  all  others  interested  in  the  mortgage 
as  a  collateral  security,  be  made  parties  to  the  action.*  The 
decree  should  provide  first  for  the  payment  to  the  pledgee  of 
the  amount  due  him,  and  then  for  the  payment  to  the 
mortgagee  of  the  balance.* 

It  is  also  proper  for  the  mortgagee  and  the  pledgee  to 
join  as  co-plaintiffs  in  the  action  to  foreclose,  as  they  are 
together  the  owners  of  the  entire  bond  and  mortgage. 
Neither  the  mortgagor  nor  other  parties  to  the  action  can 
object  to  such  joinder  of  plaintiffs,  as  all  parties  interested 
in  the  mortgage  debt  are  thereby  brought  before  the  court,  so 
that  its  decree  will  become  binding  and  conclusive  upon  them.* 


'  Simson  v.  Satterlee,  64  N.  Y.  *  Kittle  v.  VanDyck,  1  Sandf.  Ch. 

657  (1876),  affirming  6  Hun  (N.  Y.)  (N.    Y.)    76   (1843) ;   Woodruff   v. 

805(1875).  Depue,  14  N.   J.  Eq.  (1  McCart.) 

« Norton  v.  Warner,  3  Edw.  Ch.  168,  176  (1861) ;  Miller  v.  Hender- 

(N.  Y.)  106  (1837) ;  N.  Y.  Code  Civ.  son,10  N.  J.  Eq.(2  Stockt.)  320(1855). 

Proc.  §  448.     See  ante  §  72.  See  post  §§  181,  182. 

» Carpenter   v.    O'Dougherty,  67  » Overall   v.    Ellis,    82   Mo.    822 

Barb.  (N.  Y.)  397  (1873) ;  e.  c.  2  T.  (1862) ;    Brunette   v.   Schettier,   21 

&  C.  (N.  Y.)  427  ;  aff'd  58  N.  Y.  681  Wis.  188  (1866). 

(1874).     See  O'Dougherty  v.   Rem-  *  Hoyt  v.  Martense,  16  N.  T.  231 

ington    Paper  Co.,   81   N.   Y.    496  (1857). 
(1880)  ;  Remington  Paper  Company 
V.  O'Dougherty,  81  N.  Y.  474(1880). 


89.] 


ASSIGNEE   MAY   FORECLOSE. 


101 


§  89.  Assignee  of  mortgage  as  collateral  security  may 
foreclose. — In  the  foregoing  section  it  has  been  seen  that 
though  a  mortgagee  has  pledged  his  mortgage  as  a  collateral 
security,  he  may  nevertheless  maintain  an  action  to  foreclose 
it ;  also,  that  the  mortgagee  and  the  pledgee  may  unite  as 
co-plaintiffs  in  foreclosing.  It  has  now  become  well  settled, 
as  a  further  principle,  that  the  pledgee,  who  holds  the  mort- 
gage as  a  collateral  security,  may  also  maintain  an  action  for 
its  foreclosure.'  The  pledgee,  however,  can  recover  judg- 
ment only  for  the  amount  of  his  claim,  the  payment  of 
which  the  decree  should  direct.*   The  amount  secured  and  the 


«  Bard  v.  Poole,  12  N.  T.  495, 507 
(1855),  per  Denio  J.,  stating  the  rea- 
sons for  the  rule  ;  Bloomer  v.  Stur- 
ges,  58  N.  T.  168  (1874) ;  Carpenter 
V.  O'Dougherty,  67  Barb.  (N.  Y.) 
397  (1873) ;  8.  0.  2  T.  &  C.  (N.  Y.) 
427,  affirmed  in  58  N.  Y.  681  (1874); 
Dalton  V.  Smith,  86  N.  Y.  176 
(1881) ;  Bush  v.  Lathrop,  22  N.  Y. 
535  (1860) ;  Whitney  v.  M'Kinney, 

7  Johns.  Ch.  (N.  Y.)  144  (1823)  ; 
Lehman  v.  McQueen,  65  Ala. 
570  (1880);  Hunter  v..  Levan,  11 
Cal.  11  (1858);   Beers  v.  Hawley, 

8  Conn.  110  (1819) ;  Wilson  v.  Fat- 
out,  42  Ind.  52  (1873) ;  St.  John  v. 
Freeman,  1  Ind.  84  (1848).  See 
Compton    V.    Jones,    65    Ind.    117 

■  (1878),  where  the  debt,  for  which 
the  bond  and  mortgage  had  been 
assigned  as  collateral  security,  had 
been  paid  by  the  assignor,  entitling 
him  to  a  reassignment  of  the  securi- 
ties, and  the  assignee  unsuccessfully 
attempted  a  foreclosure  ;  Rice  v.  Dil- 
lingham, 73  Me.  59  (1881) ;  Cutts  v. 
York  Manuf.  Co.,  14  Me.  326  (1837)  ; 
8.  c.  18  Me.  190  (1841),  per  Weston, 
Ch.  J.,  where  the  assignor  was  made 
a  defendant ;  Brown  v.  Tyler,  74 
Mass.  (8  Gray)  135  (1857) ;  Graydon 
V.  Church,  7  Mich.  36,  50,  68  (1859), 
per  Christiaucy,    J.,    collating  and 


reviewing  the  authorities,  especially 
in  New  York  ;  Selectmen  of  Natchez 
V.  Minor,  17  Miss.  (9  Smed.  &  M.) 
544  (1848);  Paige  v.  Chapman,  58 
N.  H.  333  (1878) ;  Chew  v.  Bruma- 
gim.  21 N.  J.  Eq.(6  C.  E.  Gr.)520, 529 
(1870),  per  VanSyckel,  J.,  a  leading 
case,  collating  and  reviewing  the 
New  York  cases ;  reported  below  in 
19  N.  J.  Eq.  130  (1868),  and  affirmed 
in  Chew  v.  Bnmaagen,  80  U.  S.  (13 
Wall.)  497  (1871) ;  bk.  20  L.  ed.  663. 
where  the  proposition  of  this  section 
was  considered  at  length  ;  Wilson  v. 
Giddmgs,  28  Ohio  St.  554  (1876). 

'  Carpenter  v.  O'Dougherty,  67 
Barb.  (N.  Y.)  397  (1873).  See  the 
preceding  note.  Salmon  v.  Allen, 
11  Hun  (N.  Y.)  29  (1877).  a  compli- 
cated case;  McCrum  v.  Corby,  11 
Kan.  464  (1873).  In  Underbill  v. 
Atwater,  22  N.  J.  Eq.  (7  C.  E.  Gr.) 
16  (1871),  the  assignee  became  the 
owner  of  the  entire  mortgage  pend- 
ing the  foreclosure  of  his  original 
claim,  and  a  supplemental  bill  was 
held  necessary  to  cover  his  new  in- 
terest in  the  mortgage.  See  Acker- 
son  v.  Lodi  Branch  R.  R.,  28  N.  J. 
Eq.  (1  Stew.)  542  (1877) ;  Van  Deven- 
ter  V.  Stiger,  25  N.  J.  Eq.  (10  C.  E. 
Gr.)  224  (1874),  holding  that  the 
decree  must  be  for  the  amount  of  the 


102  FOEECLOSI  RE    BY    OWNER    OF   INTEREST.         [§  90. 

interests  of  all  the  parties  in  the  mortgage,  together  with 
the  fact  that  the  assignment  is  only  collateral  or  conditional, 
must  be  specifically  stated  in  the  complaint;  and  it  is 
indispensable  that  the  mortgagee,  or  owner  of  the  equity  of 
redemption  in  the  mortgage,  be  made  a  party  to  the  action 
in  order  that  his  interests  also  may  be  foreclosed.'  It  should 
also  appear  in  the  complaint  that  the  mortgagee  has  refused 
to  become  a  co-plaintiff  with  the  pledgee;  otherwise  the 
complaint  will  be  demurrable.  It  is  believed  that  a  person 
who  holds  an  assignment  of  a  mortgage  to  indemnify  and 
protect  him  against  liabilities  or  obligations  of  any  kind  may 
foreclose  as  soon  as  he  is  damnified. 

§  90.  Owner  of  an  equitable  interest  of  any  kind  in  the 
mortgage  may  generally  foreclose. — According  to  Mr, 
Pomeroy,  it  is  a  general  principle  of  practice  in  most  of  our 
states  that  every  action  must  be  prosecuted  in  the  name  of 
the  real  party  in  interest.*  Following  this  universal  and 
equitable  principle,  the  courts  have  established  a  rule 
that  whoever  holds  an  equitable  or  real  interest  of  any  kind 
in  a  mortgage,  may  bring  an  action  for  its  foreclosure;* 
indeed,  the  rule  in  such  actions  is  as  elastic  and  liberal  as 
equity  jurisprudence  could  possibly  make  it.  It  has  become 
almost  axiomatic  that  an  equity  court  cares  little  who  brings 
an  action,  so  that  he  be  a  real  party  in  interest,  nor  how 
it  is  brought,  so  long  as  it  acquires  complete  jurisdiction 
of  all  the  parties  interested  and  of  the  entire  subject-matter 
in  issue,  so  that  a  complete  adjudication  can  be  made, 
upon  the  whole  case.  It  has  been  shown  that  the  person 
who  holds  the  largest  interest  in  the  mortgage  should 
commence   the   action ;    and   it   is   undoubtedly    the    best 


debt  and  interest  only  ;  Kamena  v.  ^  Hill  v.  Meeker,    23  Conn.    594 

Huelbig.  23  N.  J.  Eq.  (8  C.  E.  Gr.)  (1855) ;    Wooden    v.   Haviland,    18 

78  (1872).  Conn.  107  (1846).  See  Irish  v.  Sharp, 

'  See  post  §§  181,  182  and  cases  89  111.  261  (1878),  holding  that  the 

cited;    also  ante  %  87;    Fisher    on  action  should  be  brought  in  the  name 

Mortgages,  i;  348,  and  the  English  of  the  equitable  owner  of  the  mort- 

ca.'^es  cited.  gage,  and  not  in  the  name  of  the  mort- 

*  Pomeroy  s  Remedies,  §  99.     See  gagee  for  his  use. 
ante  ^  72. 


§  91.  J  FORECLOSUEE   BY   AmSTTITAKTS,    ETC.  103 

practice  to  have  all  parties  interested  in  the  mortgage  united 
as  plaintiffs,  as  opposed  to  all  parties  interested  in  the  equity 
of  redemption,  who  are  best  made  defendants.*  But  where 
this  is  impossible,  or  parties  refuse  to  join  as  co-plaintiffs, 
they  can  equally  well  be  made  defendants,  and  the  decree  of 
the  court  will  be  conclusive  upon  them.  It  often  becomes 
necessary  to  make  persons  who  are  interested  in  the 
mortgage,  defendants,  as  their  interests  may  be  antagonistic 
to  the  interests  of  others  who  also  own  a  part  of  the 
mortgage.  Furthermore,  no  one  can  be  made  a  plaintiff 
against  his  will,  and  a  person  refusing  to  become  a  plaintiff 
can  be  brought  into  an  action  in  no  other  way  than  as  a 
defendant.' 

§  91.  Special  cases  of  equitable  interest — Annuitants, 
legatees,  executors. — The  cases  in  which  questions  have 
arisen  affecting  equitable  assignments  and  the  conditional 
and  contingent  rights  of  parties  in  mortgages,  are  so  varied 
in  character  that  it  is  almost  impossible  to  induce  from  them 
any  general  rules  or  principles  applicable  to  the  subject 
of  this  section.  A  legatee  may  foreclose  a  mortgage 
upon  default  where  it  is  bequeathed, — the  interest  to  him 
and  the  principal  to  another, — and  the  mortgage  is  to 
be  kept  on  foot  by  the  terms  of  the  will  as  a  living  security 
for  those  purposes.*  So  a  mortgagee  may  foreclose  a  mort- 
gage conditioned  for  his  support  and  maintenance  during 
life.*  In  Lawrence  v.  Lawrence,*  a  mortgage  had  been  given 
by  a  husband  and  wife  who  were  executors  to  their 
co-executrix  to  secure  the  payment  of  moneys  of  the  estate 
received  by  the  husband  as  executor ;  the  wife,  after 
her  husband's  death,  was  not  allowed  to  file  a  bill  in  her 
character  as  executrix  against  his  personal  representatives 
and  heirs  at  law,  to  foreclose  such  mortgage,  where  it  did  not 
appear  from  the  bill  that  she  was  entitled,  in  her  sole  and 
separate  right  as  a  legatee,  to  a  portion  of  the  fund  secured  by 


'  See  ante  §§  87,  89  and  notes.  *  Ferguson  v.  Ferguson,  2  N.  Y. 

»  N.  Y.  Code  Civ.  Proc.  §  448.  See  360(1849). 

Beebe  V.  Morris.  56  Ala.  525  (1876).  "3    Barb.    Ch.    (N.  Y.)    71,    75 

3  Hancock  v.  Hancock,  22  jS'.  Y.  (1848). 
568  (.I860),  per  Comstock,  Ch.  J. 


104  PUECHASER    AS    EQUITABLE    ASSIGNEE.  [§92. 

the  mortgage.  "  If  in  such  a  case  the  wife  had  an  interest  in 
the  fund,  and  the  co-executrix  to  whom  the  mortgage 
was  given,  upon  a  proper  application  to  her  for  that  purpose, 
refuses  to  proceed  to  foreclose  the  mortgage,  the  widow 
of  the  mortgagee  and  the  other  legatees  for  whose  benefit 
the  mortgage  was  given,  may  file  a  bill  showing  their  respec- 
tive rights  in  the  fund,  and  claiming  to  have  the  benefit 
of  such  mortgage  and  of  a  foreclosure  thereof.  But  in  that 
case  the  mortgagee  and  all  the  legatees  who  are  interested  in 
the  fund,  must  be  made  parties  to  the  suit ;  or  the  bill  must 
be  filed  by  some  of  the  legatees  in  behalf  of  themselves  and 
of  all  others  having  an  interest  in  the  fund."* 

§  92.  Special  cases  of  equitable  assignment — Purchaser 
on  defective  foreclosure — Payment  by  mistake  or  fraud. 
— It  may  be  stated  generally  that  a  purchaser  at  a  foreclosure 
sale  becomes  an  equitable  assignee  of  the  mortgage  fore- 
closed, for  the  purpose  of  maintaining  a  second  or  strict 
foreclosure  to  extinguish  the  liens  of  junior  incumbrancers 
who  were  not  made  parties  to  the  original  action,  or  of  perfect- 
ing a  foreclosure  in  any  way  defective ;'  he  is  entitled  to  an 
action  de  novo  on  the  mortgage.*  But  a  deed  executed  by 
both  United  States  loan  commissioners,  in  pursuance  of  a 
sale  held  by  one  only,  has  been  held  void  and  not  operative 
as  an  equitable  assignment  of  the  mortgage  to  the  purchaser, 
so  as  to  give  him  any  rights  under  it.*     Where  omitted 


>  The  above  quotation  is  abridged  (1883);  Jones  v.  Mack,.  53  Mo.  147 

from  the  chancellor's  opinion.  (1873) ;  Bank  of  Wis.  v.  Abbott.  20 

« BoUes  V.   Duff,  43  N.   Y.   469  Wis.  570  (1866) ;  Moore  v.  Cord,  1-1 

(1871) ;  Robinson  v.  Ryan,  25  K  Y.  Wis.  213  (1861) ;  Stark  v.  Brown,  12 

320  (1862) ;  Franklyn  v.  Hayward,  Wis.  572  (I860). 

61  How.  (N.  Y.)  Pr.  43(1881);  Stewart  »  Rogers  v.  Holyoke,  14  Minn.  220 

V.  Hutchinson,  29  How.  (N.  Y.)  Pr.  (1869).      In  Robinson  v.  Ryan,  25 

181   (1864) ;  Taylor  v.    Agricultural  N.  Y.  320  (1862),  the  purchaser  at  a 

&   M.    Ass.,   68    Ala.    229    (1880);  statutory  foreclosure  sale,  defective 

Goodenow    v.   Ewer,    16    Cal.   461  for  want  of  service  of  a  notice  upon 

(1860) ;  Muir  v.  Berkshire,  52  Ind.  the  mortgagor,  was  held  to  stand  as 

149(1875);  Shimer  v.  Hammond,  51  an  assignee   of  the  mortgage,  ami 

Iowa,  401  (1879) ;  Shaw  v.  Heisey,  was  allowed  in  this  action  to  fore- 

48     Iowa,     468    (1878);     Johnson  close. 

V.   Robertson,  34  Md.    165  (1870) ;  *  Olmsted  t.  Elder,  5  N.  Y.  144 

Wilcoxson  V.  Osburn,  77  Mo.  621  (1851). 


§  93.]         FORECLOSURE   BY   EQUITABLE    ASSIGNEE.  105 

parties  or  others  bring  an  action  to  redeem  from  a  foreclosure 
sale,  the  purchaser  is  likewise  regarded  as  an  equitable 
assignee  of  the  mortgage/  and  a  necessary  defendant. 

A  person  who  advances  money  for  the  payment  of  a 
mortgage,  with  the  expectation  of  having  another  mortgage 
executed  to  himself  as  security,  becomes  an  equitable 
assignee  of  the  existing  mortgage,  and  upon  refusal  of  the 
mortgagor  to  execute  a  new  mortgage,  he  may  maintain  an 
action  for  the  foreclosure  of  the  first  one.*  So  also  a  person 
who  loans  money  on  a  mortgage,  to  be  used  in  part  for  the  pay- 
ment of  a  prior  mortgage,  is  equitably  subrogated  as  assignee 
of  the  mortgage  so  paid,  and  may  foreclose  it,  in  case  the 
mortgage  executed  to  him  for  the  loan  is  declared  usurious 
or  void  for  other  reasons.*  A  valid  and  subsisting  obligation 
is  not  destroyed  because  included  in  a  security,  or  made 
the  subject  of  a  contract,  void  for  usury;  although  formally 
satisfied  and  discharged,  it  may  be  revived  and  enforced  in 
case  the  new  security  or  contract  is  invalidated.  And 
where  a  mortgage,  executed  to  a  clerk  in  chancery,  to  secure 
a  widow's  dower,  was  subsequently  discharged  by  the  clerk 
without  authority  of  the  court,  upon  the  execution  to  him 
of  a  second  mortgage  for  a  larger  sum,  the  court  decided 
that  if  the  owners  of  the  fund  had  not  elected  to  foreclose  the 
second  mortgage  they  might  have  foreclosed  the  first  one, 
on  tiie  ground  that  its  discharge  by  the  clerk,  without 
authority,  was  null  and  void.* 

§  93.  Equitable  owner  by  subrogation  may  foreclose. 
— It  often  occurs  that  a  purchaser  of  an  equity  of  redemption 
in  mortgaged  premises,  pays  and  procures  an  existing 
mortgage  to  be  discharged,  believing  it  to  be  the  only 
incumbrance  on  the  premises.     Upon  his  discovery  of  liens 


Bolles   V.  Duff,  43  K  T.  469  294,  298  (1876),    affirming  6  Hun 

(1871)-,   McSorley   v.   Larissa,   100  (N.  T.)  632  (1876).     See  MiUer  v. 

Mass.  270  (1868) ;  ChUds  v.  ChUds,  WincheU,  70  K  T.  437  (1877). 

10  Ohio  St.  339  (1859).  •*  Farmers'  Loan  &  Trust  Co.  T. 

«  Gilbert  v.  Gilbert,  39  Iowa,  657  Walworth,  1  N.  T.  433  (1848).     See 

(1874) ;  Bank  v.  Campbell,  2  Rich.  Homoeopathic  Mut.  Life  Ins.  Co.  v. 

(S.  C.)  Eq.  179  (1846).  Marshall,  32    N.  J.  Eq.    (5  Stew.) 

» Patterson  v.  Bii-dsall,  64  N.  Y.  103  (1880). 


100  EQUITABLE    OWI^'ER   MAY    FOEECLOSE.  \^  94. 

subsequent  to  the  mortgage  discharged,  the  mortgage  may 
be  revived,  and  he  will  be  held  equitably  subrogated  to  all 
the  rights  of  the  mortgagee.'  A  grantor  w^ho  pays  a 
mortgage  which  his  grantee  has  assumed,  is  held  subrogated 
to  all  the  rights  of  the  mortgagee,  and  in  an  action  to 
foreclose,  may  recover  a  judgment  for  deficiency  against  the 
grantee ;  and  it  is  questionable  whether,  where  the  security 
is  being  impaired,  he  has  any  remedy  to  protect  himself, 
except  to  pay  his  bond  and  mortgage  and  become  subrogated 
to  the  rights  of  the  mortgagee.' 

The  form  in  which  an  assignee  acquires  his  ownership  or 
interest  in  the  mortgage  is  quite  immaterial ;  it  may  be  by 
mere  delivery  or  by  parol,  but  to  enable  the  assignee  to  main- 
tain a  forclosure  there  must  be  a  distinct  intention  to  give 
him  an  interest  in  the  bond  and  mortgage.  Where  the 
intention  is  to  have  a  written  assignment,  a  mere  manual 
delivery  will  not  pass  the  title.* 

§  94.  A  surety  for  the  mortgage  debt  may  sometimes 
foreclose — First,  having  guaranteed  debt. — If  a  person 
who  stands  in  the  relation  of  surety  to  a  mortgage  debt  is 
compelled  to  pay  it,  he  is  entitled  to  be  subrogated  to  the 
rights  of  the  mortgagee,  and  may  foreclose  the  mortgage 
in  his  own  name,  without  a  formal  assignment  either  in 
writing  or  by  parol.*  There  are  three  principal  ways  in 
which  this  relation  and  its  attending  rights  may  arise :  First, 
where  the  surety  has  guaranteed  the  payment  of  the 
mortgage  debt,  in  an  assignment  or  a  separate  instrument, 
he  may  take  up  the  bond  and  mortgage  and  enforce  their 


'  Ayers  v.   Adams,   82  Ind.   109  •  So  held  by  Folger,  J.,  in  Strause 

(1882) ;  Lovejoy  v.  Vose,  73  Me.  46  v.  Josephthal,  77  N.  Y.  622  (1879). 

(1881);  Cobb  v.  Dyer,  69  Me.  494  See  Green  v.  Marble,  37  Iowa,  95 

(1879) ;  Youngman  v.  Elmira  &  W.  (1873) ;  Andrews  v.  McDaniel,  68  N. 

R.  R.,  65  Pa.  St.  278  (1870).  C.  385  (1873). 

*  Marshall  v.  Davies,  78  N.  Y.  414,  ••  Mims  v.  McDowell,  4  Ga.  183 

421  (1879),  reversing  16  Hun  (N.  Y.)  (1848);     Norton    v.    Soule,   2  Me. 

606.     See  Calvo  V.  Duvies.  73  N.  Y.  (2Greenl. )    341    (1823);    Saylors 

211,   215  (1878).     In  point,  Wads-  v.    Saylors,    3  Heisk.    (Term.)    525 

worth  V.  Lyon.  93  N.Y.  201  (1883);  (1871).      See    also    the    cases    cited 

Wood  V.  Smith,  51  Iowa,  156  below,  and  a7ite  §§  89,  90  and  notes. 
(1879). 


§  95.J         PAYTVtENT   BY   GRANTEE — ^SUBROaATION.  107 

payment  in  his  own  name ;'  and  it  has  been  held  that  not 
even  an  assignment  is  necessary.' 

§  95.  Surety  may  forclose— Second,  grantee  having 
assumed  mortgage. — Second,  where  a  grantor  is  obligated  to 
pay  a  mortgage  debt  and  conveys  the  land  to  a  grantee,  who 
assumes  the  payment  thereof,  he  is  entitled,  on  paying  the 
debt,  voluntarily  or  otherwise,  to  be  subrogated  to  the  rights 
of  the  mortgagee,  and  to  enforce  the  mortgage  against  the 
land  as  the  primary  fund  for  payment,  and  thereafter  against 
all  persons  liable  for  a  deficiency.  The  right  to  foreclose  is 
perfect  without  an  assignment  of  the  bond  and  mortgage  ;* 
even  in  a  case  where  the  grantee  had  not  assumed  pay- 
ment of  the  mortgage,  the  grantor,  on  paying  the  mortgage, 
was  deemed  equitably  subrogated  to  the  extent  that  he 
could  maintain  a  foreclosure.*  But  an  assignment  can  be 
compelled  upon  tender  of  the  amount  unpaid,  and  if  the 
mortgagee  refuses  to  assign,  an  action  can  be  maintained 
against  him  for  a  formal  assignment  of  the  bond  and 
mortgage.  The  theory  upon  which  an  assignment  will 
be  decreed  has  been  stated  as  that  of  equitable  subrogation.* 
Upon  the  rights  of  a  surety  in  this  connection,  Judge 
Morse,*  of  the  New  York  court  of  appeals,  has  said:  "I 
understand   the   law  to  be  as  well  settled,  as  the  reason 


«  Darst  T.  Bates,  95  Dl.  493  (1880);  (1853).   See  also  Marshall  v.  Davies. 

Gerber  v.  Sharp,  72  Ind.  553  (1880).  78  N.  Y.  414,  431  (1879);  a  c.  68 

» Walker  v.    King,    44   Vt.    601  How.  (N.  Y.)  Pr.   231 ;  Marsh  v. 

(1872).  Pike,  10  Paige  Ch.  (N.  Y.)  695  (1844), 

'  McLean  v.  Towle,  3  Sandf.  Ch.  cited    and   reviewed   in    Calvo    v. 

(N.  Y.)  117  (1845) ;  Risk  v.  Hoffman,  Davies,   73  N.  Y.    211,  215  (1878); 

69  Ind.  187(1879);  Hoffman  v.  Risk,  Cherry  v.  Monro,  2  Barb.  Ch.  (N. 

58  Ind.  113  (1877) ;  Josselyn  v.  Ed-  Y.)  618  (1848) ;  Stebbms  v.  Hall,  29 

wards,  57  Ind.  212  (1877) ;  "Wood  v.  Barb.  (N.  Y.)  525  (1859) ;  ComeU  v. 

Smith,  51  Iowa,  156  (1879);  Hoysradt  Prescott,  2  Barb,  (N.  Y.)  16  (1847)  ; 

V.  Holland,  50  N,  H.  433  (1870).  Ferris  v.  Crawford,  2  Den.  (N.  Y.) 

*  Baker  v.  Terrell,   8  Minn.   195  595  (1845)  ;  Tice  v.  Annin,  2  Johns. 
(1868).  Ch.  (N.  Y.)  125  (1816) ;  Halsey  y. 

5  Johnson  v.  Zink,  51  N.  Y.  333  Reed,    9    Paige    Ch.    (N.   Y.)   446 

(1873),   affirming  52  Barb.   (K  Y.)  (1842) ;  Cox  v.  Wheeler,  7  Paige  Ch. 

396  (1868) ;  Matteson  v.  Thomas,  41  (N.  Y.)  248,  258  (1888) ;  Brewer  v. 

lU.  110  (1866).  Staples,  3  Sandf.   Ch.   (N.  Y.)  579 

•  Averill  v.  Taylor,  8  N.  Y.  44,  51  (1846). 


108         FORECLOSURE  BY  SURETY  AGATNST  GRANTEE.    [^  95, 

and  justice  of  the  rule  is  clear,  that  any  one  who  holds  the 
actual  relation  of  surety  for  the  mortgage  debt,  charged 
upon  land  in  which  he  has  an  interest,  although  his  liability 
as  such  surety  extends  no  farther  than  to  lose  his  interest  in 
the  land,  has  a  right  to  redeem,  for  the  protection  of  such 
interest.  And  I  suppose  it  to  be  equally  well  settled,  that 
his  right  as  surety  in  such  a  case,  and  upon  his  redeeming, 
is,  to  be  subrogated  to  the  rights  and  to  occupy  the  position 
of  the  creditor  from  whom  he  redeems."  And  Chief  Commis- 
sioner Lott,  in  a  later  case'  in  the  same  court,  determined  that 
the  "relation  of  surety  between  the  mortgagor  and  his  grantee 
does  not  deprive  the  obligee  of  the  right  of  enforcing  the 
bond  against  the  obligor.  He  is  entitled  to  his  debt,  and 
has  a  right  to  avail  himself  of  all  his  securities.  Equity, 
however,  requires  that  the  obligor,  on  the  payment  of 
the  debt  out  of  his  own  funds,  should  be  subrogated  to  the 
rights  of  the  obligee,  so  that  he  can  reimburse  himself  by  a 
recourse  to  the  mortgaged  premises  for  that  purpose.  This 
can  not  prejudice  the  creditor,  and  it  is  clearly  equitable 
as  between  the  debtor  and  the  owner  of  the  land.  He  clearly 
has  no  right  or  color  of  right,  justice  or  equity  to  claim  that 
he,  notwithstanding  the  conveyance  of  the  property  subject 
to  the  mortgage,  and  thus  entitling  him  only  to  its  value 
over  and  above  it,  should  in  fact  enjoy  and  hold  it  discharged 
of  the  incumbrance,  without  any  contribution  toward  its 
discharge  and  satisfaction,  from  the  land.  This  equitable 
principle  is  fully  recognized  in  most  of  the  cases.  Indeed,  it  is 
so  consistent  with  right  and  justice  as  to  require  no  authori- 
ties to  sustain  it."  It  is  to  be  observed  in  all  cases  men- 
tioned in  this  section,  that  the  land  is  the  primary  fund  for 
the  payment  of  the  mortgage  debt."  The  surety  can  not 
compel  the  mortgagee  to  file  a  bill  to  foreclose  the  mortgage 
and  to  exhaust  his  remedy  against  the  principal  debtor  by  a 
judgment  for  deficiency ;  but  he  may  file  a  bill  against 
the  mortgagee'  and  the  subsequent  grantee,  who  has 
assumed    the  payment   of  the   debt   and    thereby   become 


«  Johnson  v.  Zink,  51  N.  Y.  333,      Y.)  595  (1844),   affirming  1  Sandf. 
336  (1873).  Ch.  (N.  Y.)  210  (1843). 

«  Marsh  v.  Pike,  10  Paige  Ch.  (N.  » Morse  v.  Larkin,  46  Vt.  371  (1874), 


§  96.]  SUBROGAnON   OF  INCUMBEAifOEE.  109 

the  principal  debtor,  to  have  the  debt  paid  to  the  mortgagee 
by  such  grantee,  or  from  the  proceeds  of  a  sale  of  the 
mortgaged  premises.  "  It  is  well  settled  that  a  surety,  after 
the  debt  has  become  due,  may  come  into  court  and  com- 
pel the  principal  to  pay  the  debt."* 

§  96.  Surety  may  foreclose  —  Third,  junior  interest 
redeeming  from  senior  interest. — Third,  where  a  subse- 
quent incumbrancer,  though  not  holding  the  actual  relation 
of  surety  for  the  mortgage  debt,  still  has  such  an  interest  in 
the  land  that  he  may  redeem  from  the  mortgage  debt  by 
paying  the  same,  and  thereby  become  subrogated  to  the 
rights  and  the  position  of  the  mortgagee.'  Cases  under  this 
head  are  numerous  in  those  states  where  foreclosure  may  be 
made  by  entry  and  possession,  and  the  mortgagor  and  those 
claiming  under  him  are  obliged  to  assert  their  rights  by 
redemption,  especially  in  Massachusetts,  Maine  and  Ver- 
mont. One  of  two  joint  mortgagors,  who  has  been  obliged 
to  pay  the  whole  debt,  has  been  held  subrogated  to  the 
rights  of  the  mortgagee  as  against  the  other  mortgagor  ;* 
and  if  a  purchaser  of  a  divided  or  an  undivided  part  of 
mortgaged  premises  pays  the  entire  mortgage  to  protect  his 
own  interest,  he  will  become  the  equitable  assignee  of  a 
proportional  part  of  the  mortgage,  and  will  be  allowed  to 
enforce  it  against  the  remaining  part  of  the  premises.*  So  a 
tenant  for  life,  upon  paying  a  prior  existing  mortgage,  in 


«  Marsh  v.  Pike,  1  Sandf.  Ch.  (N.  v.  Taylor,  8  N.  Y.  44  (1853) ;  Cor- 

Y.)  213  (1843),  per  Vice-chancellor  nell  v.  Prescott,  2  Barb.  (N.  Y.)  20 

Sandford,  citing  Warner  v.  Beards-  (1847) ;  Carpentier  v.  Brenham,  40 

ley,  8  Wend.  (N.  Y.)  194  (1831) :  1  Cal.  221  (1870) ;  TyrreU  v.  Ward, 

Story's  Eq.  327  ;  2  Story's  Eq.  35,  102  IlL  29  (1882) ;  Lowrey  v.  Byere, 

§730;  144,  §  849.     See  Cornell  v.  80  Ind.  443(1881);  Benton v.Shreeve, 

Prescott,  3  Barb.  (N.  Y.)  16  (1847) ;  4  Ind.  66  (1853).     For  an  exhaus- 

Norton  v.  Warner,  3  Edw.  Ch.  (N.  tive  discussion  of  the  doctrine  of 

Y.)  108  (1837),  and  note.     Hayes  v.  subrogation  and  substitution,  as  ap- 

Ward,  4  Johns.  Ch.  (N.  Y.)  123,  133  plied  to  parties  to  a  mortgage,  se« 

(1819) ;  McLean  v.  Lafayette  Bank,  Rardin   v.   Walpole,    38   Ind.    140 

3  McL.  C.  C.  587  (1845).  (1871),  collating  the  authorities. 

»  EUsworth  V.  Lockwood,  42  N.         *  Shinn  v.  Shinn,  91  111.  477  (1879) ; 

Y.  89,  99  (1870),  is  the  leadmg  case ;  White  v.  Fisher,  63  111.  258  (1871), 
relied  upon  in  Dings  v.  Parshall,  7         *  Champlin  v.  Williams,  9  Pa.  St 

Hun  (N.  Y.)  522  (1876).   See  AveriU  841  (1848). 


1  iO  ASSIGNEE    OF   MOKTGAGE   WITHOUT   BOND.       [§  97. 

order  to  protect  his  own  estate,  is  deemed  an  equitable 
assignee  of  the  mortgage.'  But  a  surety  is  never  entitled  to 
subrogation  and  foreclosure  until  he  has  paid  the  debt.'  The 
propositions  stated  in  this  section  are  dependent  upon  the 
general  principles  of  law  which  govern  the  relation  of  princi- 
pal and  surety,  and  more  especially  upon  those  principles 
M^hich  entitle  a  surety  to  be  subrogated  to  the  securities  of 
a  creditor  upon  the  default  of  the  principal  debtor  in  making 
payment,' 

§  97.  Assignee  of  a  mortgage  without  the  bond  can 
not  foreclose. — It  is  now  a  well  established  principle  in  the 
law  of  mortgages  that  the  assignee  of  a  mortgage  without 
the  bond,  note  or  indebtedness  which  the  mortgage  was 
given  to  secure,  acquires  no  title  whatever  to  the  mortgage 
debt,  and  can  not  maintain  a  foreclosure  ;  the  mortgage  in* 
his  hands  is  a  mere  nullity.  The  assignment  of  the  mortgage 
alone  is  scarcely  presumptive  evidence  of  an  intention  to 
assign  the  indebtedness  which  it  was  given  to  secure  ;*  but 
an  assignment  of  a  bond  and  mortgage,  and  the  moneys  due 
and  to  grow  due  thereon,  carries,  by  its  terms,  a  note  for 
which  they  are  held  as  collateral  security.*  In  Merritt  v. 
Bartholick,*  a  leading  case  in  New  York,  Judge  Parker  says: 
**  As  a  mortgage  is  but  an  incident  to  the  debt  which  it  is 
intended  to  secure,  the  logical  conclusion  is,  that  a  transfer 
of  the  mortgage  without  the  debt  is  a  nullity,  and  no  interest 
is  acquired  by  it.     The  security  can  not  be  separated  from 


«  Hamilton  v.  Dobbs,  19  N.  J.  Eq.  Flanders,  32  Me.  175  (1850).     See 

(4  C.  E.  Gr.)  227  (1868).  Bulkley   v.  Chapman,  9  Conn,   8 

«  Conwell  V,  McCowan,  53  111.  363  (1831),  on  the  question  of  intent ; 

(1870).  PoweU,  1115, 1116.    Bee  post  %  98. 

'  Brandt  on  Suretyship  and  Guar-  » Belden  v.  Meeker,  2  Lans.  (N. 

anty.  Y.)  471  (1870);  afltened  47  N.  Y. 

*  Jackson  v.  Blodget,  5  Cow.  (N.  307(1872). 

Y.)  206  (1825) ;  Nagle  v.  Macy,  9  «  36  N.  Y.  44,  45  (1867),  affirming 

Cal.  426  (1858) ;   Peters  v.   James-  47  Barb.  (N.  Y.)  253  (1866),  and  34 

town  Bridge  Co.,  5  Cal.  334  (1855) ;  How.   (N.  Y.)  Pr.   129,  and  citing 

Hamilton  v,  Lubukee,   51  111.   415  many  cases ;    Cooper  v.  Newland, 

(1869) ;    Hubbard  v.   Harrison,   38  17  Abb.  (N.  Y.)  Pr.  342,  344  (1863) ; 

Ind.  323  (1871) ;  WUIis  v.  Vallette,  Langdon  v.  Buell,  9  Wend.  QX.  Y.) 

4  Met.   (Ky.)  195  (1862) ;    Lunt  v.  80  (1832). 
Lunt,  71  Me.  377  (1880) ;  Webb  v. 


§  9 8. J       ASSIGNEE   OF   DEBT    WITHOUT  MOETGAGE.  Ill 

the  debt  and  exist  independently  of  it.  This  is  the  neces- 
sary legal  conclusion,  and  is  recognized  as  the  rule  by  a  long 
course  of  judicial  decisions  *  *  *  for  the  legal  maxim  is, 
the  incident  shall  pass  by  the  grant  of  the  principal,  but 
not  the  principal  by  the  grant  of  the  incident."  Accessoriuni 
non  ducit,  sed  sequitur  principale.  In  a  later  case,*  a  bond 
and  mortgage  had  been  given  to  secure  the  performance  of 
a  contract ;  after  the  contract  had  been  rescinded,  the 
assignee  of  the  bond  and  mortgage  brought  an  action  for 
foreclosure,  but  it  was  dismissed  on  the  ground  that  the 
rescission  of  the  contract  extinguished  the  indebtedness  and 
the  liability  thereunder  and  destroyed  the  validity  of  the 
bond  and  mortgage. 

Some  courts  have  held  that  an  assignment  of  the  mortgage 
without  the  note  or  bond  transfers  a  naked  trust,"  and  that 
the  assignee  must  hold  the  mortgage  at  the  will  and  disposal 
of  the  creditor  who  owns  the  bond.*  Where  a  mortgage  is 
executed  without  a  bond  or  other  written  evidence  of  the 
debt  secured,  and  it  contains  no  covenant  for  the  payment 
of  the  debt,  the  assignee  acquires  a  valid  claim  and  lien  upon 
the  land,  but  nothing  more.* 

§  98.  Assignee  of  the  note,  bond  or  debt  may  foreclose, 
though  the  mortgage  is  not  assigned. — ^As  has  been  seen 
in  the  preceding  section,  the  mortgage  debt  is  the  essential 
fact,  while  the  mortgage  is  merely  an  incident.  Consequently 
the  assignee  of  the  debt  may  foreclose,  as  he  is  the  equitable 
assignee  of  the  mortgage,  though  he  holds  neither  a  written 
nor  a  parol  assignment  of  it.*    He  is  the  real  party  in  interest 


»  Wanzer  v.  Gary,  76  K  T.  526  66  Me.  204  (1868) ;  Bailey  v.  Gould, 

(1879).  In  point,  Emory  v.  Keighan,  Walk.  Ch.  (Mich.)  478  (1844). 

94  111.  543  (1880).  •»  Severence  v.   Griffith,  2   Lans. 

»  Johnson  v.  Cornett,  29  Ind.  59  (N.  Y.)  38  (1870). 
(1867) ;  Johnson  v.  Walter,  60  Iowa,  »  For  the  New  York  cases  see  the 
315   (1882);    Pope  v.   Jacobiis,    10  preceeding  section.     Center  v.  Plant- 
Iowa,    262    (1859) ;    Cleveland    v.  ers'  &  Mechanics'  Bank,  22  Ala.  743 
Cohrs,  10  Rich.  (S.  C.)  224  (1878).  (1853) ;  Doe  v.   McLoskey,  1  Ala. 

3  Dudley  v.  CadweU,  19  Conn.  228  708  (1840) ;  Willis  v.  Farley,  24  Cal. 

(1848) ;    Huntington    v.    Smith,    4  490  (1864) ;  Bennett  v.  Solomon,  6 

Conn.  237(1822);  Medley  v.  Elliot,  Cal.  134  (1856);   Ord  v.  McKee, 'fj 

62  111.  532  (1872);  Webster  v.  Calden,  Cal.   516  (1855) ;   Quinebaug  Bank 


112 


MAKING   ASSIGNOR   PARTY    DEFENDANT. 


[§98. 


and  can  give  a  full  quittance  of  the  debt,  though  he  is  not 
in  a  position  to  execute  a  legal  discharge  of  the  mortgage.' 
The  rule  of  this  section  holds  good  even  after  the  debt  has 
been  put  into  a  judgment." 

While  in  a  foreclosure  it  may  not  be  indispensable  to 
join  the  assignor  as  a  party  plaintiff  or  defendant,  it  would 
certainly  be  advisable  to  do  so,  in  order  to  extinguish  any 
possible  interest  which  he  might  continue  to  have  or  claim. 
The  assignor  has  sometimes  been  held  a  necessary  party,  on 
the  ground  that  an  assignment  of  the  note  alone  carries 
only  the  equitable,  and  not  the  legal  title  to  the  security.' 


V.  French,  17  Conn.  134  (1845); 
Huntington  v.  Smith,  4  Conn.  237 
(1823) ;  Austin  v.  Burbank,  2  Day 
(Conn.)  474  (1807);  Hamilton  v. 
Lubukee,  51  lU.  415  (1869) ;  Olds  v. 
Cummings,  31  111.  188  (1863); 
Herring  v.  Woodhull,  29  Dl.  92 
(1862) ;  Ryan  v.  Dunlap,  17  HI.  40 
(1855) ;  Holdrige  v.  Sweet,  23  Ind. 
118(1864);  Gowerv.  Howe,  20  Ind. 
396  (1863) ;  Garrett  v.  Puckett,  15 
Ind.  485(1860);  Walker  v.  Schreiber, 
47  Iowa,  529  (1877);  Preston  v. 
Morris,  43  Iowa,  549  (1876);  Bremer 
Co.  Bank  v.  Eastman,  34  Iowa,  392, 
394  (1872);  Bank  of  Indiana  v. 
Anderson,  14  Iowa,  544  (1863); 
Sangster  v.  Love,  11  Iowa,  580 
(1861) ;  Blair  t.  Marsh,  8  Iowa,  144 
(1859);  Crow  v.  Vance,  4  Clarke 
(Iowa),  434  (1857)  and  the  cases 
cited  at  pages  440,  441  ;  Kurtz 
V.  Sponable,  6  Kan.  395  (1870) ; 
Burdette  v.  Clay,  8  B.  Hon.  (Ky.) 
295  (1847);  Vimont  v.  Stitt,  6  B. 
Mon.  (Ky.)  478  (1846);  Bank  of 
United  States  v.  Huth,  4  B.  Mon. 
(Ky. )  450  (1844);  Warren  v. 
Homestead,  33  Me.  356  (1851); 
Byles  V.  Tome,  39  Md.  461  (1873) ; 
Ohio  Life  Ins.  &  Trust  Co.  v.  Winn, 
4  Md.  Ch.  Dec.  253  (1853) ;  Briggs 
V.  Hannowald,  35  Mich.  474  (1877) ; 
Martin  v.  McReynolds,  6  Mich.  70 


(1858) ;  Holmes  v.  McGinty,  44  Misa. 
94  (1870);  Laberge  v.  Chauvin,  3 
Mo.  145(1839);  Richards  v.  Kountze, 
4  Neb.  208  (1876) ;  Kyger  v.  Ryley, 
2  Neb.  20,  28  ( 1865  )  ;  Wheeler  v. 
Emerson,  45  N.  H.  527  (1864); 
Whittemore  v.  Gibbs,  24  N.  H.  484 
(1852) ;  Lane  v.  Sleeper,  18  N.  H. 
209  (1846) ;  Rigney  v.  Lovejoy,  13 
N.  H.  253  (1843);  Southerin  v. 
Mendum,  5  N.  H.  420,  432  (1831) ; 
Hyman  v.  Devereux,  63  N.  C.  624 
(1869);  Perkins  v.  Sterne,  23  Tex.  561 
(1859) ;  Keyes  v.  Wood,  21  Vt.  331 
(1849) ;  Pratt  v.  Bank  of  Bennington, 
10  Vt.  293  (1838) ;  Body  v.  Jewsen, 
33  Wis.  402  (1873);  Martineau  v. 
McCoUum,  3  Pin.  (Wis.)  455  (1853) ; 
Carpenter  v.  Longan,  83  U.  S.  (16 
Wall.)  271  (1872) ;  bk.  21  L.  ed.  313. 

■  Way  man  v.  Cochrane,  35  HI. 
152  (1864). 

'  Wayman  v.  Cochrane,  35  HI. 
152  (1864) ;  Swartz  v.  Leist,  13  Ohio 
St.  419  (1862) ;  Moore  v.  Cornell,  68 
Pa.  St.  320  (1871). 

«Bibb  V.  Hawley,  59  Ala.  403 
(1877) ;  Denby  v.  Mellgrew,  58  Ala. 
147  (1877) ;  Prout  v.  Hoge,  57  Ala. 
28  (1876) ;  Graham  v.  Newman,  21 
Ala.  497  (1852) ;  Burton  v.  Baxter, 
7  Blackf.  (Ind.)  297  (1844) ;  Stone  v. 
Locke,  46  Me.  445  (1859) ;  Moore  v. 
Ware,  38  Me.  496(1854).  8ee  ante  %97. 


§  99.]  CONTEilPOEANEOUS    MOETGAGES.  113 

Vice  versa,  if  the  assignor  should  commence  a  foreclosure  of 
his  mortgage  after  having  assigned  the  bond  or  debt,  his 
assignee  would  certainly  be  a  necessary  party.  According 
to  the  cases,  however,  the  assignor  could  hardly  maintain 
an  action  to  foreclose.  The  assignee  and  the  assignor  may 
unite  as  co-plaintiffs ;'  and  it  has  been  held  that  the  assignee 
can  prosecute  the  action  in  the  name  of  the  assignor.' 

§  99.  Mortgagees  owning  contemporaneous  mort- 
gages, being  equal  liens,  any  one  or  more  may  foreclose. — 
Where  two  or  more  bonds  and  mortgages  have  been  simul- 
taneously executed  and  recorded  to  secure  independent 
debts,  or  parts  of  the  same  debt,  and  are  equal  liens  upon 
the  premises,  the  mortgagees  may  unite  as  co-plaintiffs 
to  foreclose  their  mortgages,  or  any  one  or  more  may 
foreclose  upon  refusal  of  the  others  to  unite  as  co-plaintiffs." 
One  of  the  mortgagees  can  not  ignore  the  rights  of  the  others, 
and  foreclose  without  making  them  parties ;  if  they  are 
omitted,  the  decree  and  sale  will  be  defective,*  and  they  can 
redeem,  or  maintain  a  separate  foreclosure.*  The  courts 
seem  to  regard  such  mortgages  the  same  as  though  they 
constituted  a  single  mortgage  given  to  secure  to  the 
mortgagees  in  severalty  the  amounts  of  their  respective 
claims.*  In  a  New  York  case,^  it  appeared  that  a  part  of  the 
purchase  money  for  a  farm  was  secured  to  a  widow  and 
several  heirs  by  separate  mortgages  given  to  the  widow 
and  each  of  the   heirs   for  their  proportionate  shares  of 


>  Holdridge  v.  Sweet,  23  Ind.  118  Pa.  St.  43  (1853),  collating  and  re- 

(1864).  viewing  the  Pennsylvania  cases,  per 

»  Calhoun  v.  Tullass.  35  Ga.  119  Woodward,  J.     See  post  §  184. 

(1866) ;  English  v.  Register,  7  Ga.  *  But  in  Dungan  v.  American  Life 

887  (1849).  Ins.  Co.,  52  Pa.  St.  258  (1866),  one 

« Potter  V.  Crandall,  Clarke  Ch.  mortgagee  foreclosed,  ignoring  the 

(N.  T.)  119,  123  (1839).    See  Greene  other,  and  the  decree  was  held  to 

V.   Warnick,   64  N.  Y.   220  (1876),  divest  both. 

reversing  4  Hun  (N.  T.)  703,  where  *  Cain    v.    Hanna,    63   Ind.    408 

the  respective  rights  of  simultaneous  (1878). 

mortgagees  came  before  the  court  in  *  See  ante  §§  83,  84.    See  Granger 

a  contest  for  surplus  moneys ;  Deck-  v.  Crouch,  86  N.  Y.  494,499  (1881). 

er  v.  Boice,  83  N.  Y.  215  (1880);  '  Potter  v.  Crandall,  Clarke  Ch.(N. 

Cochran  v.  Goodell.  131  Mass.  464  Y.)     119,     123    (1839),    p&r   Vice- 

(1881).    See  also  Perry's  Appeal,  23  Chancellor  Whittlesey. 

(8) 


114  DtFTERE^T  MOETGAGES SEPARATE  SUITS.    [§  100. 

the  purchase  money;  all  the  mortgages  covered  the  same 
property,  and  were  executed  and  recorded  simultaneously. 
On  default,  one  of  the  heirs  filed  a  bill  of  foreclosure  against 
the  mortgagor,  the  widow  and  the  other  heirs.  The  court 
determined  that  a  decree  could  not  be  granted,  unless 
the  widow  and  co-heirs  had  refused  to  unite  with  him  as 
parties  plaintiff,  and  unless  all  the  rights  of  all  the  parties 
were  set  forth  in  the  plaintiff's  bill.  Vice-Chancellor 
Whittlesey,  writing  the  opinion,  said  :  "  The  proper  course 
for  the  complainant  to  pursue  is  to  ask  his  mother  and 
co-heirs  to  join  with  him  in  foreclosing  all  the  mortgages  in 
one  bill ;  if  any  refuse,  he  can  then  make  such  as  refuse, 
defendants.  He  should  set  forth  in  his  bill  all  the  circum- 
stances of  the  simultaneous  execution  of  the  mortgages;  and 
then  the  court  can  make  a  decree  which  will  satisfactorily 
dispose  of  all  the  rights  of  all  the  parties,  whether  some  of 
them  are  reluctant  to  proceed  or  not." 

§  100.  Owner  of  two  mortgages  can  not  foreclose  both 
at  same  time  in  separate  actions. — A  person  who  owns 
two  or  more  mortgages  upon  the  same  premises,  can  not 
maintain  separate  actions  at  the  same  time  for  their  fore- 
closure.' In  a  case'  where  this  proposition  was  squarely 
before  the  court,  Chancellor  Walworth  held  that  "  the  com- 
plainant not  only  unnecessarily,  but  contrary  to  the  settled 
practice  of  the  court,  which  is  for  the  complainant  to  state 
all  of  his  junior  incumbrances  upon  the  mortgaged  premises 
in  his  bill  to  foreclose  his  prior  mortgage,  commenced  two 
separate  and  distinct  foreclosure  suits  upon  these  two  mort- 
gages, on  one  piece  of  land,  given  by  the  same  mortgagors 
to  the  same  mortgagee,  and  which  mortgages,  at  the  time  of 
filing  these  bills,  belonged  to  the  same  person."    The  best 


•  Fitzhngh  v.  McPherson,  3  Gill  other  lands  also,  and  an  action  waa 

(Md.)  408  (1845).     In  Demarest  v.  then    commenced   on   the    second 

Berry,  16  N.  J.  Eq.  (1  C.  E.  Gr.)  mortgage;  but  the  second  foreclosure 

481  (1864),  after  an  action  had  been  was  allowed  to  continue  only  on  the 

commenced  on  a  first  mortgage,  it  discontinuance  of  the  first  one.    See 

was  discovered  that  a  second  mort-  ante  §  99. 

gage   covered   the   same    premises  '  Roosevelt  v.  Ellithorp,  10  Paige 

described  in  the  first  mortgage  and  Ch.  (N.  Y.)  415,  419  (1843). 


§101.]    ASSIGNEE    OR   RECEIYER   MAT   FOEECLOSE.  115 

practice  is  to  foreclose  all  the  mortgages  in  one  action,'  or  to 
foreclose  the  senior  mortgage,  setting  forth  in  the  complaint 
the  claims  upon  the  junior  incumbrances.  It  matters  not 
that  the  mortgages  are  of  different  dates,  and  given  to 
different  persons  to  secure  different  debts  ;  it  is  essential 
only  that  they  be  owned  by  the  same  person  at  the  time  of 
foreclosure,  and  that  they  cover  the  same  premises.  If  the 
junior  mortgage  covers  other  premises  also,  the  fact  should 
be  set  forth  in  the  complaint.  If  the  junior  mortgage  alone 
is  foreclosed,  the  senior  mortgage  may  remain  as  a  valid  and 
subsisting  lien." 

§  loi.    Assignee  in  bankruptcy  or  by  general  assign- 
ment, or  receiver  of  a  corporation,  may  foreclose. — An 

assignee  in  bankruptcy  or  by  general  assignment  may  foreclose 
a  bond  and  mortgage  which  belonged  to  the  estate  of  the 
assignor,  as  he  succeeds  to  the  entire  legal  title  to  the  assets ; 
he  acquires  no  better  title,  however,  than  the  assignor 
possessed.*  Likewise,  he  may  assign  the  mortgage,  and  the 
assignee  can  maintain  a  foreclosure.*  The  assignor  is  not  a 
necessary  party  plaintiff  or  defendant ;  if  deemed  best,  how- 
ever, he  may  very  properly  be  made  a  defendant,  so  as  to 
extinguish  any  possible  equities  that  he  may  claim.  The 
assignee  may  decline  to  collect  the  mortgage  or  to  prosecute 
a  foreclosure  if  he  believes  that  nothing  can  be  realized.  In 
such  a  case  the  bankrupt  or  assignor  is  at  liberty  to  com- 
mence the  suit  in  his  own  name,  but  the  assignee  should  be 
brought  into  the  action,  or  at  least  be  notified  of  its  pen- 
dency, and  requested  to  prosecute  it.  The  general  rule 
is  that,  if  an  assignee  abandons  any  property  or  choses  in 
action  belonging  to  the  bankrupt's  estate,  or  if  he  declines 
to  appear  as  prosecutor  when  summoned  in  a  suit  pending 
in  favor  of  the  bankrupt,  the  right  remains  in  or  reverts  to 
the  bankrupt ;  he  is  still  the  legal  and  equitable  owner  of 
his  estate  as  against  every  one  but  his  assignee.' 


*  McGowen   v.   Branch  Bank  at  '  Upton  v.  National  Bank  of  Head- 
Mobile,  7  Ala.  823  ;  Hawkins  v.  Hill,  ing,  120  Mass.  153  (1876), 

15  Cal.  499  (1860) ;  Phelps  v.  Ells-  *  Ward  v.  Price,  13  N.  J.  Eq.  (1 

worth,  8  Day  (Conn.)  397  (1809).  Beas.)  543  (1859). 

•  Clements  v.  Griswold,  46  Hun  » Towle  v.  Rowe,  58  N.  H.  394 
(N.  Y.)  377  (1877).  (1878). 


116  ASSIG]!^EE    PE]ST)EXTE    LITE.       [§|  103-1 OST. 

The  receiver  of  an  insolvent  corporation  may  also  foreclose 
a  mortgage,'  and  his  successor  in  ofifice  likewise  succeeds  to 
the  same  right."  "  It  is  the  settled  doctrine  that  the  receiver 
of  an  insolvent  corporation  represents  not  only  the  corpor- 
ation, but  also  creditors  and  stockholders,  and  that,  in  his 
character  as  trustee  for  the  latter,  he  may  disaffirm  and 
maintain  an  action  as  receiver  *  *  *  to  recover  its  funds  or 
securities  invested  or  misapplied.'" 

§  102.  Assignee  pendente  lite  may  continue  a  fore- 
closure.— A  person  who  purchases  a  bond  and  mortgage 
pending  its  foreclosure  may  be  substituted  as  plaintiff  and 
continue  the  action  in  his  own  name,  or  the  action  may 
be  continued  in  the  name  of  the  assignor,  if  no  one  objects 
and  the  matter  is  not  brought  to  the  attention  of  the  court. 
But  objection  can  be  made  by  answer  if  the  assignment 
is  executed  before  the  answer  is  pleaded.*  If  the  assignment 
is  recorded,  or  the  fact  of  the  transfer  is  brought  to  the 
knowledge  of  the  court,  it  would  seem  that  the  action  can  be 
continued  only  in  the  name  of  the  true  owner  and  real  party 
in  interest,*  who  should  bring  himself  forward  in  the  suit  by 
petition  or  a  supplemental  bill.* 

§  103.  Owner  of  mortgage  dying — Personal  represen- 
tatives may  foreclose. — The  legal  title  to  a  bond  and  mort- 
gage passes,  upon  the  death  of  its  owner,  to  his  personal 
representatives,  who  are  in  equity  trustees  for  the  benefit  of 
the  decedent's  heirs  or  legatees.  When,  at  an  earlier  day,  it 
was  held  that  the  mortgagee  had  a  vested  interest  in  the  title 
to   the   lands   under  his    mortgage,   his  heirs,   instead    of 


»  Robinson  v.  Williams,  22  N.  Y.  Ch.  (N.  Y.)  539  (1836) ;  Wallace  ▼. 

880  (1860),  was  an  action  by  a  re-  Dunning,   Walk.    Ch.    (Mich.)  416 

ceiver  against  a  receiver  ;  Iglehart  v.  (1844).     See  Smith  v.  Bartholomew, 

Bicrce,  36  111.  133  (1864).  42  Vt.  356  (1869). 

« Iglehart  v.   Bierce,   36  111.   133  »  Bigelow  v.  Booth,  39  Mich.  623 

(1864).  (1878).     See  Ellis  v.  Sisson,  96  111. 

«  See  Attorney-General  v.  Guard-  105  (1880).     See  post  §§  130-133. 

Ian  Mutual  Life  Ins.  Co.,  77  N.  Y.  •  Foster  v.  Deacon,   6  Madd.   59 

272,  275  (1879),  per  Andrews,  J.  (1821) ;  Coles  v.  Forrest,   10  Beav. 

«Mill3v.  Hoa?,  7PaigeCh.(N.Y.)  552  (1847);    Fisher  on   Mortgages, 

18  (1837) ;  Field  v.  Maghee,  5  Paige  §§  385-388. 


§  lOS.]  FORECLOSUKE   BY   EEPEESENTATTYES.  117 

his  personal  representatives,  were  held  to  succeed  to  that 
inters '  apon  his  death.  But  at  present  it  is  the  uniform 
law  of  America  that  a  bond  and  mortgage  are  only  securities, 
and  pass  as  personal  property  to  the  control  and  disposition 
of  a  decedent's  personal  representatives  ;*  and  the  absence  of 
a  personal  obligation  by  bond,  note  or  covenant  for  the 
debt,  does  not  affect  the  right  of  the  personal  representatives 
to  the  possession  of  the  mortgage. 

A  personal  representative  upon  coming  into  due  possession 
and  control  of  a  bond  and  mortgage  may  maintain  an  action 
for  its  foreclosure;  indeed,  he  is  the  only  person  who  can 
foreclose  the  mortgage,  as  he  holds  the  entire  legal  title  to 
it.*  The  administrator  of  a  mortgagee,  to  whom  the 
mortgage  was  given  to  secure  an  annuity,  may  foreclose,  if 


»  Kinna  v.  Smith,  3  K  J.  Eq.  (2  H. 
W.  Gr.)  14  (1834) ;  Grace  v.  Hunt, 
1  Cooke  (Tenn.)  844  (1813) ;  Thorn- 
borough  V.  Baker,  3  Swan.  628 
(in75);  Tabor  v.  Tabor,  3  Swan. 
636  (1679).  See  the  cases  cited  below. 

»  People  V.  Keyser,  28  N.  T.  226 
(1863) ;  Newton  v.  Stanley,  28  N.  Y. 
61  (1863) ;  Peck  v.  Mallams,  10  N. 
Y.  509  (1853) ;  Renaud  v.  Conselyea, 
7  Abb.  (N.  Y.)  Pr.  105  (1858), 
reversmg  4  Abb.  (N.  Y.)  Pr.  280  and 

5  Abb.(N.Y.)Pr.346;Routh  V.Smith, 

6  Conn.  135,  139  (1823);  Buck  v. 
Fischer,  2  Colo.  182  (1873) ;  Dixon 
V.  Cuyler,  27  Ga.  248  (1859).  In 
Hunsucker  v.  Smith,  49  Ind.  114 
(1874),  an  administrator  held  person- 
ally a  mortgage  on  the  lands  of  the 
decedent.  Merrin  v.  Lt  wis,  90  111. 
505  (1878) ;  Nolte  v.  Libbert,  34  Ind. 
163  (1870) ;  Cryst  v.  Cryst,  Smith 
(lud)  370  (1848) ;  Talbot  v.  Dennis, 
Smith  (Ind.)  357  (1849);  White  v. 
Rittemeyer,  30  Iowa,  272  citing 
many  cases ;  Grimmel  v.  Warner, 
21  Iowa,  13  (1866);  Burton  v.  Hin- 
trager,  18  Iowa,  348,  351  (1865). 
So  by  statute  in  Missouri,  Riley's 
Adm'r  v.  McCord's  Adm'r,  24  Mo. 


265  (1857),  (R.  C.  1845,  p.  749) ;  also 
in  Michigan,  Albright  v.  Cobb,  80 
Mich.  855  (1874).  See  Webster  v. 
Calden,  56  Me.  204,  211  (1868); 
Fay  V.  Cheney,  81  Mass.  399  (1833) ; 
Dewey  v.  VanDeusen,  21  Mass.  (4 
Pick.)  19  (1826) ;  Smith  v.  Dyer,  16 
Mass.  18  (1819) ;  Scott  v.  McFarland, 
13  Mass.  309  (1816);  Baldwm  v. 
Allison,  4  Minn.  25  (1860) ;  Griffln 
V.  LoveU,  42  Miss.  402  (1869); 
Mutual  Life  Ins.  Co.  v.  Sturges,  33 
N.  J.  Eq.  (5  Stew.)  678  (1880) ;  8.  o. 
33  N.  J.  Eq.  (6  Stew.)  828  (1880); 
Gibson  v.  Bailey,  9  N.  H.  168  (1838); 
Trimmier  v.  Thomson,  10  Rich. 
(S.  C.)  164  (1877);  Collamer  v. 
Langdon,  29  Vt.  32  (1856)  ;  Pierce 
V.  Brown,  24  Vt.  165  (1852) ;  Weir 
V.  Mosher,  19  Wis.  311  (1865).  For 
the  English  cases  see  Cave  v.  Cork, 
2  Y.  &  C.  C.  C.  130  (1843);  Wilton  v. 
Jones,  2  Y.  &  C.  C.  C.  244  (1843) ; 
Hobart  v.  Abbott,  2  P.  Wms.  643 
(1731) ;  Meeker  v.  Tanton,  2Ch.  Cas. 
29  (1680) ;  Gobe  v.  Carlisle,  2  Vern. 
67  (1688),  cited  in  Clerkson  v.  Bow- 
yer,  2  Vern.  67  (1688).  Fisher  on 
Mortgages,  §§  359,  360. 


116  £XECUIOii   3IAY    EEVIVE   rOllECLOSUEE.       []§  103. 

the  condition  was  broken  during  the  decedent's  life-time, 
and  recover  the  unpaid  annuity."  If  two  or  more  executors 
or  administrators  have  quahfied,  all  should  unite  as  plaintiffs  ; 
but  if  any  who  have  qualified  refuse  to  join  as  co-plaintiffs, 
they  may  be  made  defendants  to  the  action  ;  they  must  be 
brought  before  the  court  in  some  capacity.*  In  most  states 
it  is  not  necessary  to  bring  the  heirs  of  the  mortgagee  into  the 
action/  while  in  a  few  they  are  held  indispensable  parties.* 

Where  a  testator  dies  pending  his  foreclosure,  his  ex- 
ecutor after  qualifying  may  properly  revive  the  action ; 
and  he  may  do  this,  though  his  co-executor  be  the  owner 
of  the  equity  of  redemption.  In  such  a  case  it  was  held 
advisable  in  reviving  the  action  to  make  the  co-executor 
a  defendant  personally,  as  he  was  the  owner  of  the  equity  of 
redemption,  and  a  defendant  also  in  his  representative 
capacity;  and  the  action  was  sustained  upon  the  principle 
that  one  co-executor  may  maintain  an  action  in  equity 
against  another  co-executor  to  compel  the  payment  of  a 
debt  owing  by  him  to  the  estate/  The  executor  of 
a  trustee  has  been  allowed  to  foreclose  a  mortgage  held  in 


'  Marsh  v.    Austin,  83    Mass.   (1  absolutely  and  died  insolvent  with- 

Allen)  235  (1861);  Pike  v.  Collins,  out  the  state,  but  ordinarily  the  heirs 

83  Me.  38  (1851).  of  the  mortgagee  are  held  necessary 

*  Ralhbone  v.  Lyman,  8  R.  I.  155  parties.     For  the  English  cases  see 

(1865);  but  see  Alexander  |v.  Rice,  Fisher  on  Mortgages,   §359;   Scott 

52  Mich.  451  (1884).  v.  Nicoll,  3  Russ.  476  (1827) ;  Ellis 

3  Dayton  v.  Dayton,  7  111.  App.  136  v.    Guavas,   2  Ch.    Cas.    50  (1680) ; 

(1879) ;    Griflin  v.  Lovell,  42  Miss.  Freak  v.  Hearsey,    1   Ch.   Cas.  51 

402  (1869).     This  is  the  rule  la  New  (1664). 
York.  '  McGregor  v.   ]\IcGregor,  35  N. 

■*Huggins  V.   Hall,    10  Ala.   283  Y.   218,    222    (1866),   Wright    and 

(1846) ;  Mclver  V.  Cherry,  8  Humph.  Smith,   JJ.,    writing  the  opinions, 

(Tenu. )  713  (1848);    Atchison   v.  and  relying  largely  upon  Smith  v. 

Surguine,  1  Yerg.  (Tenn.)400  (1830).  Lawrence,  11  Paige  Ch.  (N.  Y.)  206 

They  were  necessary  parties  in  Illi-  (1844).     In  Miller  v.  Donaldson,  17 

nois  until  the  statute  of  1874,  Ch.  95,  Ohio,  264  (1848),  an  administrator 

i;  9,    dispensed   with   tlie  old    rule.  de  bonis  non  f(n-eclosed  a  mortgage 

Dayton  v.  Dayton,  7  111.  App.  136  belonging  to  the  estate  of  a  testator 

(1S79).     In  Etlieridge  V.  Vernoy,  71  whose  e.xecutor  was  his  mortgage 

IS.  C.  l.'54(1874).  tlie  heirs  were  held  debtor;  the  fact  that  he  was  made 

not  necessary  where  the  mortgagee  executor  was  held  not  to  extiuguish 

iiud  asal^ued  Ike  boud  and  mortgage  the  debt. 


§§  104-105.]    EEPEESENTATIYES  OF  VENDOR.  119 

trust  by  the  decedent,  where  the  trust  was  well  defined  and 
did  not  rest  in  the  discretion  of  the  trustee  ;'  but  the  general 
rule  is  for  the  successor  of  the  trustee  to  foreclose." 

§  104.  Vendor  under  land  contract  dying — Personal 
representatives  may  foreclose. — In  the  foreclosure  of  a 
land  contract,  the  rule  as  stated  above  is  somewhat  limited. 
The  personal  representatives  of  a  deceased  vendor  may 
foreclose  a  land  contract,  but  they  must  either  show  that 
they  have  tendered,  and  are  able  and  ready  to  give  a  deed 
with  a  good  title,  or  else  they  must  make  the  heirs  or 
devisees  of  the  deceased  vendor,  inheriting  his  legal  title, 
parties  to  the  action,  so  that  they  may  be  bound  by  the  de- 
cree. Upon  this  subject  Judge  Earl  has  said  that  "  by  the 
contract  of  sale,  the  land  conveyed  became  real  estate  in 
the  purchasers,  and  would  descend  as  such  to  their  heirs  or 
devisees.  The  vendor  held  the  legal  title  as  trustee  for  the 
purchasers.  The  purchase  money  due  upon  the  contract 
was,  as  to  him,  personal  estate,  and  upon  his  death  passed  to 
his  personal  representatives,  as  part  of  his  personal  estate ; 
and  the  legal  title  to  the  real  estate  passed  to  his  heirs 
or  devisees  in  trust  for  the  purchasers.'" 

§  105.  Owner  of  mortgage  dying — Heirs,  devisees  and 
legatees  generally  can  not  forclose. — As  has  been  shown 
in  the  preceding  section,  the  heirs  of  a  deceased  mortgagee 
receive  no  title  whatever  to  the  bond  and  mortgage ;  con- 
sequently, having  no  interest   in  the  security,  they  can  not 


*  Bunn  V.  Vaughan,  1  Abb.  App.  at  law  of  a  decedent  executed  to  his 
Dec.  (N.  Y.)  253  (1867).  administrator  a  deed  of  their  title  to 

*  See  post  §§  110-113.  the  premises  to  enable  her  to  transfer 

*  Thomson  v.  Smith,  63  N.  Y.  301,  it  to  the  purchaser  in  fulfillment  of  a 
803  (1875),  citing  Dart  on  Purchasers  land  contract,  and  the  oixirt  held,  in 
and  Vendors,  121  ;  Moyer  v.  Hin-  an  action  to  foreclose  the  lail<i  con- 
man,  13  N.  Y.  180  (1855) ;  Lewis  tract,  that  the  heirs  were  not  necf,<?- 
V.  Smith,  9  N.  Y.  502,  510  (1854) ;  sary  parties.  In  Leaper  v.  Lyo\i,  68 
Moore  v.  Burrows,  34  Barb.  (N.  Y.)  Mo.  216  (1878),  on  the  other  hand, 
173  (1861) ;  Adams  v.  Green,  34  the  heirs  were  held  necessajy  parties. 
Barb.  (N.  Y.)  176(1861) ;  Champion  even«  though  a  deed  executed  by 
V.  Brown,  6  Johns.  Ch.  (N.  Y.)  398  them  had  been  tendered  to  the  vendee 
(1822).  In  Schroeppel  v.  Hopper,  by  the  personal  representatives.  See 
40  Barb.  (N.  Y.)  425  (1863),  the  heirs  Anshutz'  App.  34  Pa.  St.  375  (1859). 


120  HEIES    ATsT)    LEGATEES    FOEECLOSIN-G.  [§  105. 

maintain  an  action  for  its  foreclosure.*  In  a  case  where  no 
personal  representative  had  been  appointed,  an  heir  was 
allowed  to  foreclose  on  filing  an  indemnifying  security 
to  protect  the  mortgagor  from  being  subsequently  called 
upon  for  payment."  Neither  can  an  heir  make  such  an 
assignment  of  a  mortgage  as  will  entitle  the  assignee  to 
maintain  a  foreclosure.*  Where  a  mortgagee  died  pending  a 
foreclosure,  his  heirs  were  allowed  to  revive  the  action  ;* 
and  after  administration  had  been  closed  upon  the  affairs  of 
a  decedent,  his  distributees  were  allowed  to  foreclose  a 
mortgage  belonging  to  his  estate.'  In  an  action  to  redeem 
from  a  mortgage,  the  heirs  and  personal  representatives 
of  the  mortgagee  have  both  been  held  necessary  parties.* 

Where,  however,  a  mortgage  is  specifically  bequeathed  to 
a  legatee,  the  entire  title  passes  to  him  and  he  may  foreclose 
the  mortgage.^  But  even  in  such  a  case  it  has  been  held 
that  the  personal  representatives  should  be  made  defen- 
dants.* Where  the  legacy  is  made  a  general  bequest  to 
be  paid  out  of  the  mortgage,  the  action  may  properly  be 
brought  by  the  executor,  making  the  legatee  a  defen- 
dant ;'  and  an  executor  has  been  allowed  to  foreclose,  even 


»  Anthony  v.  Peay,   18  Ark.   24  ">  White  v.  Secor,   58  Iowa,   533, 

(1856) ;  Roath  v.  Smith,  5  Conn.  135,  536  (1882) ;  Grimmell  v.  Warner,  21 

139  (1823) ;  Kinna  v.  Smith,  3  N.  J.  Iowa,    13  (1866) ;  Trenton  Banking 

Eq.  (2  H. W.  Gr.)  14  (1834).    Cotitra,  Co.  v.  Woodruff,  2  N.  J.  Eq.  (1  H.W. 

English  authorities  :    Gobe  v.  Carl-  Gr.)  117  (1838).  For  the  English  auth- 

isle,  cited  in  2   Vern.    67  ( 1688 ) ;  orities,   see    Fisher    on    Mortgages, 

Clerkson  v.  Bowyer,    2    Vern.    67  §  355 ;  Wood  v.  Williams,  4  Madd. 

(1688);  Fisher  on  Mortgages,  §364.  186  (1819)  ;  Wetherell  v.   Collins,  3 

See  ante  %  103,  and  the  cases  cited.  Madd.  255  (1818) ;  Hichens  v.  Kelly, 

«  Babbitt  v.  Bowen,   32  Vt.    437  2  Sm.  &  G.  264  (1854).     The  heir  is 

(1859).  not  a  necessary  party  ;  Fisher  on 

« Douglass  V.  Durin,    51  Me.  121  Mortgages,  §  359  ;  How  v.  Vigures, 

(1863).  1  Rep.  in  Ch.   32  (1629) ;  Skipp  v. 

*  Mclver  v.    Cherry,   8    Humph.  Wyatt,  1  Cox  Ch.  353  (1787). 
(Tenn.)    713    (1848);     Atchison    v.  «  Gibbes  v.  Holmes,  10  Rich.  (S. 
Surguine,  1  Yerg.  (Tenn.)  400  (1880).  C.)  Eq.  484,  493  (1859). 

»  Hill  V.  Boy  laud,   40  Miss.   618  '  Newton  v.  Stanley,  28  N.  T.  61 

(1866).  (1863).    See  Buck  v.  Fischer  2  Colo 

•  Hiltnr  T.  Lothrop,   46   Me.   297  182  (1873). 
(1858):     Haskins    v.    Hawkes,    108 

Mass.  379(1871). 


I  106. J   EXECUTOR  OE  ADJIESTISTRATOR  MORTGAGEE.  121 

where  the  mortgage  has  been  specifically  bequeathed.'  It  is 
beh'eved  that  such  a  foreclosure  will  always  be  allowed, 
if  there  should  be  a  deficiency  of  assets  to  pay  the  dece- 
dent's debts. 

§  io6.  An  executor  or  administrator  to  whom  a  mort- 
gage is  executed  may  foreclose. — Whenever  a  bond  and 
mortgage  are  executed  or  assigned'  to  the  personal  represen- 
tative of  a  decedent,  to  secure  assets  belonging  to  his  estate, 
the  personal  representative  may  bring  an  action  in  his  official 
capacity  for  foreclosure.  The  same  principle  is  true  where 
a  personal  representative  holds  funds  in  the  capacity  of  a 
trustee ;  and  the  fact  that  the  investment  of  trust  funds 
in  bonds  and  mortgages  is  so  highly  favored  by  courts, 
renders  this  principle  very  important  in  the  administration 
of  estates.  The  persons  beneficially  interested  need  not  be 
brought  into  the  action.'  The  character  of  the  personal  repre- 
sentative should  clearly  appear  in  the  bond  and  mortgage, 
and  must  be  specifically  alleged  in  the  pleadings  to  foreclose.* 

In  a  leading  New  York  case^  the  mortgagee  was  described 
as  "  T.  B.,  executor  of  the  estate  of  T.  T.,  deceased  "prima 
facie,  the  mortgage  was  held  to  be  the  private  property 
of  T.  B.  After  the  death  of  T.  B.,  an  administrator  of  T.  T., 
with  the  will  annexed,  filed  a  bill  for  the  foreclosure  of  the 
mortgage.  The  court  held  that  the  personal  representatives 
of  T.  B.  were  necessary  parties,  and  that  the  plaintiff  should 


1  Cryst  V.  Cryst,  Smith  (Ind.)  370  &  W.,  executors  of  E. ;"  after  the 

(1848-49).  death  of  M.,  the  question  arose  as  to 

'  Flagg  V,  Johnston,   39   Ga.   26  whether  "W.,  the  surviving  executor, 

(1869).  could  execute  a  sufficient  discharge 

'  For  the  English  cases,  see  "Wood  of  the  mortgage,  and  whether  the 

V.   Harman,   5  Madd.    368    (1820) ;  executors  of  M.  ought  not  to  unite 

Locke  V.  Lomas,  5  DeG.  &  S.  326  with  him  in  executing  the  discharge. 

(1852);  B.C.  16  Jur.  814(1852-53).  It  was  held  that  the  discharge  hy 

■*  Flagg  V.   Johnston,  39  Ga.   26  W.   was  sufficient.      Qucere,  as   to 

(1869).  whether    the    surviving    mortgagee 

5  Peck  v.  Mallams.lON.T.  509,537,  could  not  have  maintained  an  action 

546  (1853),  opinions  by  Willard,  John-  for  the  foreclosure  of  the  mortgage, 

son  and  Mason,  J  J.  In  People  v.  Key-  if  he  had  sufficient  authority  to  exe- 

8er,28]Sr.Y.226(1863),(reportedbelow  cute  a  discharge  of  the  debt.     See 

in  39  Barb.  587  ;  17  Abb.  (N.  Y.)  Pr.  ante  g  81,  on  the  doctrine  of  survl- 

215),  a  mortgage  was  made  to  "  M.  vorship  among  joint  mortgagees. 


122  succEssoES  m  oiFicE.        f§§  107-108. 

show  by  proper  allegations  that  the  mortgage  was  a  part  of 
the  assets  of  the  estate  of  T.  T.  In  a  similar  case/  a 
mortgage  was  executed  to  "  P.,  acting  executor  of  the  estate 
of  D."  Upon  the  death  of  P.,  it  was  held  that  the  mortgage 
belonged  prima  facie  to  his  estate,  and  could  be  foreclosed 
by  his  personal  representatives,  but  later  the  court  decided 
that  evidence  was  admissible  showing  the  real  ownership  of 
the  mortgage  ;  and  it  then  appearing  that  it  actually  belonged 
to  D.,  the  personal  representatives  of  P.  were  not  allowed 
to  maintain  the  action.  And  where  an  executor  invests 
estate  funds  in  his  individual  name  and  capacity,  his  personal 
representative  alone,  and  not  his  successor,  can  foreclose  the 
mortgage.' 

§  107.  The  successor  in  office  of  an  executor  or  ad- 
ministrator may  foreclose. — When  a  mortgage  is  made  to 
A,,  as  executor  or  administrator,  his  successor  in  office 
receives  the  legal  title  to  the  mortgage,  and  may  foreclose 
it.  The  personal  representatives  of  A.  have  nothing  what- 
ever to  do  with  the  bond  and  mortgage,  which  legally  and 
equitably  belong  to  the  assets  of  the  deceased  person  whom 
he  represented.'  Thus,  a  mortgage  had  been  executed  to  an 
administrator  to  secure  a  widow's  dower  ;  upon  his  death  his 
successor  and  not  his  personal  representative  was  allowed  to 
foreclose." 

§  108.  Foreign  executors  and  administrators — When 
they  may  foreclose. — For  more  than  a  half  century  it  has 
been  well  established  as  a  principle  of  inter-state  law,  that  an 
executor  or  administrator,  appointed  in  a  foreign  political 
jurisdiction,  can  not  maintain  a  suit  in  the  courts  of  other 
states ;  and  the  word  "  foreign "  is  used  in  each  state  to 
designate  all  jurisdictions  and  laws  without  itself.  While 
foreign  laws  are  recognized  in  all  courts  under  the  principle 


»  Renaud  v.  Conselyea,  4  Abb.  (N.  «  Caulkins  v.  Bolton,  98  N.  Y.  511 

Y.)  Pr.  280  (1856) ;  s.  c.  5  Abb.  (N.  (1885). 

Y.)  Pr.  346  (1857).    On  re-argument,  »  Renaud  v.    Conselyea,    4    Abb. 

Strong,  J.,  revised  his  opinion,  writ-  (N.  Y.)Pr.  280(1856).    Seepos^§113. 

ing  the  decision  in  7  Abb.    (N.  Y.)  -»  Brooks  v.  Smyser,  48  Pa.  St.  86 

Pr.  105  (1858).  (1864). 


§  108 J     rOEEIGN   EXECUTOR   OE   ADMINISTEATOE.  123 

of  lex  loci  contractus,  the  machinery  used  for  the  enforce- 
ment of  such  laws  in  their  native  jurisdictions  is  never 
recognized  or  allowed  in  any  other  jurisdiction.  "  The  right 
which  an  individual  may  claim  to  personal  property  in  one 
country,  under  title  from  a  person  domiciled  in  another,  can 
only  be  asserted  by  the  legal  instrumentalities  which  the 
institutions  of  the  country  where  the  claim  is  made  have 
provided.  The  foreign  law  furnishes  the  rule  of  decision  as 
to  the  validity  of  the  title  to  the  thing  claimed  ;  but  in 
respect  to  the  legal  assertion  of  that  title  it  has  no  extra- 
territorial force.  As  a  result  of  this  doctrine  it  is  now 
generally  held  everywhere,  and  it  is  well  settled  in  this  state, 
that  an  executor  or  administrator  appointed  in  another 
state  has  not,  as  such,  any  authority  beyond  the  sovereignty 
by  virtue  of  whose  laws  he  was  appointed."  *  Accordingly 
a  foreign  executor  or  administrator  can  not  foreclose  a  mort- 
gage by  an  equitable  action  in  New  York.* 

If  a  foreign  personal  representative  desires  to  foreclose  a 
mortgage  in  New  York,  or  in  any  state  outside  of  the  politi- 
cal jurisdiction  in  which  he  was  appointed,  it  is  necessary 
for  him  to  take  out  letters  testamentary  or  of  administration 
in  some  probate  court  within  the  state  where  the  mortgaged 
premises  are  situated ;  otherwise  he  can  not  obtain  such  a 
standing  in  a  court  of  equity  as  will  enable  him  to  maintain 
an  action  for  foreclosure.*  "  It  is  not  because  the  executor 
or  administrator  has  no  right  to  the  assets  of  the  deceased, 


»  Parsons  V.  Lyman,  20  N.  T.  103  Smith  v.  Webb,  1  Barb.  (N.  Y.)  233 

(1859),  'per  Denio,  J.,  citing  Morrell  (1847) ;  Williams  v.  Storrs,  6  Johns. 

V.  Dickey,  1  Johns.  Ch.  (N.  Y.)  153  Ch.    (N.    Y.)  353  (1822);   Stone  v. 

(1814);  Doolittle  v.  Lewis,  7  Johns.  Scripture,  4  Lans.(N.  Y.)  186(1870). 

Ch.   (N.   Y.)  45  (1823) ;  Vroom  v.  See  the  cases  cited  above. 
VanHorne,  10  Paige  Ch.  (N.  Y.)  549  *  See  the  cases  cited  in  the  preced- 

(1844).  ing  notes  to  this  section.    Alexander 

«  Peterson  v.  Chemical  Bank,  32  v.  Rice,  52  Mich.  451  (1884) ;  Wood- 

N.  Y.  21,    40  (1865).   affirming   29  ruff  v.  Mutchler,  34  N.  J.  Eq.  (7 

How.  (N.  Y.)  Pr.  240  ;  Parsons  v.  Stew.)  33  (1881),  and  note;  Porter 

Lyman,  20  N.  Y.  112  (1859) ;  Brown  v.  Trail,  30  N.  J.  Eq.  (3  Stew.)  106 

V.  Brown,  1  Barb.  Ch.  (N.  Y.)  189  (1878) ;  Trecothick  v.  Austin,  4  Ma- 

(1845);  Vermilya  v.  Beatty,  6  Barb.  son  C.  C.  16  (1825).     Contra,  Hey- 

(N.    Y.)    429  (1848);    Lawrence   v.  wood  v.    Hartshorn,    55  2^.  H.  4iU 

Elmendorf,  5  Barb.  (N.  Y.)  73  (1848);  (1875). 


124  bojiestic  adminsteator  plaesttiff       [§109. 

existing  in  another  country,  that  he  is  refused  a  standing  in 
the  courts  of  such  country,  for  his  title  to  such  assets,  though 
conferred  by  the  law  of  the  domicile  of  the  deceased,  is 
recognized  everywhere.  Reasons  of  form,  and  a  solicitude 
to  protect  the  rights  of  creditors  and  others,  resident  in  the 
jurisdiction  in  which  the  assets  are  found,  have  led  to  the  dis- 
ability of  foreign  executors  and  administrators,  which 
disability,  however  inconsistent  with  principle,  is  very  firmly 
established."* 

§  109.  Methods  of  avoiding  rule  requiring  domestic 
administrator  for  plaintiff. — The  rule,  requiring  a  foreign 
personal  representative  to  take  out  letters  testamentary  or 
of  administration,  may,  however,  be  avoided  by  his  making 
an  assignment  of  the  bond  and  mortgage  to  some  person 
residing  in  the  state  where  the  premises  are  situated ;  and 
the  assignee  may  maintain  an  action  for  their  foreclosure. 

It  seems  that  the  disability  of  a  foreign  executor  or  admin- 
istrator to  sue  in  other  states  does  not  attach  to  the  subject- 
matter  of  the  action,  but  to  \\it.  person  of  the  plaintiff ^  So  a 
foreign  specific  legatee  of  a  bond  and  mortgage  may  foreclose, 
on  the  ground  that  he  is  legally  and  equitably  the  absolute 
owner  of  them.*  But  such  a  foreclosure  by  a  specific  legatee 
or  an  assignee  will  not  produce  a  perfect  record  title, 
inasmuch  as  no  evidence  of  the  authority  of  the  personal 
representative  to  act  in  the  place  of  the  deceased  mortgagee, 
and  to  execute  a  proper  assignment  of  the  mortgage,  is 
to  be  found  in  the  state.*     Where  a  voluntary  payment  of 


'  Peterson  v.  Chemical  Bank,  32  and  administrators.  Attention  ifl 
N.  y.  43  (1865).  Hiram  Deuio,  Ch.  also  called  to  the  elaborate  briefs 
J.,  has  written  the  opinions  in  the  printed  with  the  opinion  in  Peterson 
leading  cases  of  Parsons  v.  Lyman,  v.  Chemical  Bank. 
20  N.  Y.  108  (1859),  and  Peterson  v.  «  Peterson  v.  Chemical  Bank,  39 
Chemical  Bank  («M25?'a),with  so  much  N.  Y.  43  (1805) ;  Smith  v.  Webb,  1 
learning  and  with  such  clearness.  Barb.  (N.  Y.)  233  (1847) ;  Smith  v. 
after  an  exhaustive  review  of  all  the  Tiffany,  16  Hun  (N.  Y.)  552  (1879), 
cases  which  in  any  way  affect  the  per  Hardin,  J.,  collating  and  review- 
principles  stated  in  this  section,  that  ing  the  cases  upon  this  point, 
they  are  worthy  of  the  careful  study  ^  Smith  v.  Webb,  1  Barb.  (N.  T.) 
of  any  one  who  has  occasion  to  ex-  202  (1847). 

amine  the  law  afferting  the  extra-  *  SuJth  v.   Tiffany,  16  Hun  (N, 

teniloiial  ri^^hls  of  fuiciiin  executors  Y.)  552  (1879). 


§  109.]      PAY3IENT   TO   FOREIG-N"  ADJIDflSTEATOR.  125 

the  mortgage  debt  is  made  by  the  mortgagor  to  a  foreign 
executor  or  administrator  of  the  mortgagee,  such  payment 
will  discharge  the  debt  and  cancel  the  lien.  "The  result  of 
the  cases  seems  to  be  that  a  foreign  executor  or  adminis- 
trator, appointed  by  the  proper  tribunal  of  the  decedent's 
domicile,  is  authorized  to  take  charge  of  the  property  here 
and  to  receive  debts  due  to  the  decedent  in  this  state,  where 
there  was  no  conflicting  grant  of  letters  here,  and  where  it 
could  be  done  without  suit."*  But  in  a  recent  case  in  New 
York,  where  an  administrator  had  been  appointed  upon  the 
estate  of  a  deceased  non-resident,  and  the  mortgagor  never- 
theless paid  his  mortgage  debt  to  a  foreign  administrator 
who  was  subsequently  appointed  at  the  intestate's  place  of 
residence,  the  domestic  administrator  in  New  York  was 
allowed  to  foreclose  the  bond  and  mortgage,  and  the  court 
determined  that,  under  the  circumstances,  payment  to  the 
foreign  administrator  was  no  defense  to  the  action.*  In 
foreclosures,  as  in  other  actions,  an  objection  that  the  plain- 
tiff is  a  foreign  executor  or  administrator,  and  therefore 
legally  disqualified  from  suing,  must  be  taken  by  demurrer 
or  answer,  or  it  will  be  considered  waived.* 

It  is  stated  by  Mr.  Thomas,*  that  the  foreclosure  of  a 
mortgage  by  advertisement  under  a  power  of  sale,  and  pur- 
suant to  statute,  is  a  matter  of  contract  and  not  n*"  iMn'sdiction, 


•  Vroom  V.  VanHome,  10  Paige  Lewis,  7  Johns.  Ch.  (N.  Y.)  45 
Ch.(N.T.)  549  (1844),  :per  Chancellor  (1823);  Averill  v.  Taylor,  5  How. 
Walworth,  cited  with  approval  and  (N.  Y.)  Pr.  476  (1850) ;  but  it  is  very 
quoted  by  Denio,  J.,  in  Parsons  v.  doubtful  whether  this  proposition 
Lyman,  20  N.  Y.  115  (1859).  The  would  be  approved  at  the  present 
same  principle  is  stated  as  good  law  day.  The  former  case  was  decided 
by  Judge  Story,  in  Trecothick  v.  by  Chancellor  Kent  in  1823,  under  a 
Austin,  4  Mason  C.  C.  33  (1825).  statute  which  made  provision  for  the 

'  Stone  V.  Scripture,  4  Lans.  (N.  foreclosur*  of  mortgages  containing 

Y.)  186  (1870).  a  power,  and  the  mortgage  in  that 

'  McBride  v.   Farmers'  Bank  of  case  contained  a  special  power  which 

Salem,  26  N.  Y.  457  (1863) ;  Zabris-  led  the  Chaucellor  to  say  that  the 

kie  v.  Smith,    13  N.    Y.   322,   326  foreclosure  was  a  matter  of  private 

(1855);  Robbins  v.  Wells,  26  How.  contract  and  not  of  court  jurisdiction. 

(N.  Y.)  Pr.  15  (1863).  He  cited  a  colony  statute  as  old  aa 

*  Thomas  on  Mortgages,  p.  476,  1774.  The  court,  in  Averill  v.  Tay- 
citing   as    authority,    Doolittle    v.  lor,  seemed  to  be  in  much  doubt  as 


126 


TRUSTEES   MAY   FORECLOSE. 


[§110. 


and  that  a  foreign  executor  or  administrator  may  therefore 
adopt  that  method  of  foreclosure  without  seeking  the 
authority  of  our  courts  of  probate. 

§  lie.  Trustees  may  foreclose. — It  may  be  stated  as  a 
general  rule  that  a  person  who  is  in  any  manner  appointed 
the  trustee  of  a  person  owning  a  mortgage  or  an  interest 
therein,  may  maintain  an  action  in  his  own  name,  as  trustee, 
for  its  foreclosure.*  So,  also,  a  trustee,  like  a  personal 
representative,  to  whom  a  mortgage  is  executed  to  secure 
funds  of  the  trust  estate,  may  foreclose  in  his  own  name  as 
such  trustee."  When  the  trust  is  merely  nominal,  it  is  usual 
for  the  trustee  to  join  the  cestuis  que  trust  with  him  as 
co-plaintiffs ;  indeed,  some  courts  have  held  that  the  bene- 
ficiaries are   necessary   parties   plaintiff.*      It    is    believed, 


to  whether  thl  3  proposition  was  good 
law,  and  with  some  hesitation  relied 
upon  Chancellor  Kent's  opinion. 
See  Demarest  v.  Wynkoop,  3  Johns. 
Ch.  (N.  Y.)  129  (1817).  The  propo- 
sition, however,  is  supported  by  the 
late  case  of  Hayes  v.  Frey,  54  Wis. 
503,  518  (1882),  which  relies  upon 
Doolittle  V.  Lewis,  7  Johns.  Ch.  (N. 
T.)  45  (1823). 

•  Fisher  on  Mortgages,  §§  355,  358, 
365.  For  the  English  cases,  see 
Oshourn  v.  Fallows,  Russ.  «fe  M.  741 
(1830) ;  Adams  v.  Paynter,  1  Coll. 
530  (1844) ;  Smith  v.  Chichester,  2 
Dm.  &  "War.  404  (18?9) ;  Browne  v. 
Lockhart,  10  Sim.  426  (1840) ;  Wil- 
ton V.  Jones,  3  Y.  &  C.  C.  C.  244 
(1848);  Allen  v.  Knight,  5  Hare, 
280  (1846);  Barkley  v.  Reay,  2 
Hare,  306  (1843). 

«  Hays  V.  Dorsey,  5  Md.  99  (1853), 
act  of  1833,  chap.  181  ;  Hackensack 
Water  Co.  v.  DeKay,  36  N.  J.  Eq. 
(9  Stew.)  548  (1883).  In  Hays  v. 
Gallon  G.  L.  &  C.  Co.,  29  Ohio  St. 
330  (1876),  the  trustee  owned  in  his 
own  right  no  part  of  the  mortgage 
debt,  and  the  relation  of  trustee  did 
not  appear  on  the  face  of  the  notes  or 


mortgage.  Holmes  v.  Boyd,  90  Ind. 
332  (1883),  where  a  note  and  collat- 
eral mortgage  were  held  in  the  name 
of  a  cashier  for  his  bank.  See 
ante  §106  ;  N.  Y.  Code  Civ.  Proc. 
§449. 

*  Hitchcock's  Heirs  v.  United 
States  Bank  of  Penn.,  7  Ala.  386 
(1845) ;  Freeman  v.  Schofield,  16  N. 
J.  Eq.  (1  C.  E.  Gr.)  28  (1863) ;  Large 
V.  VanDoren,  14  N.  J.  Eq.  (1 
McCart.)  208  (1862)  ;  Woodruff  v. 
Depue,  14  N.  J.  Eq.  (1  McCart.)  168, 
176  (1861);  Stillwell  v.  McNeely, 
2  N.  J.  Eq.  (1  H.  W.  Gr.)  305  (1840); 
Davis  V  Hemingway,  29  Vt.  438 
(1857) ;  Fleming  v.  Holt,  12  AV.  Va. 
143  (1877).  In  Cassidy  v.  Bigelow, 
25  N.  J.  Eq.  (10  C.  E.  Gr.)  112, 
(1874),  the  trustee  and  cestui  que 
trust  united  as  plaintiffs.  In  Wright 
V.  Bundy,  11  Ind.  398  (1858),  it  was 
held  that  the  beneficiaries  were  not 
necessary  parties,  but  that  they 
might  properly  be  united  as  co-plain- 
tiffs. This  case  was  thoroughly 
argued  twice  by  able  counsel.  For 
the  English  authorities,  see  Fisher  on 
Mortgages,  §  367;  Goldsmid  v.  Stone- 
hewer,  9  Hare  Appx.  39;  &  c.  17  Jur. 


§  111.]  BENEFICIAKIES   NECESSAET   PAETTES.  127 

however,  that  if  a  beneficiary  refuses  to  become  a  co-plaintiff, 
he  can  be  made  a  defendant ;'  it  is  best,  at  least,  when 
possible,  to  bring  all  parties  interested  in  the  trust  within 
the  jurisdiction  of  the  court. 

Where  the  number  of  beneficiaries  is  so  large  that  great 
inconvenience  and  expense  would  be  incurred  by  making 
them  parties  to  the  bill  of  foreclosure,  the  courts  may,  in 
their  discretion,  dispense  with  a  strict  adherence  to  the  rule.* 
Thus,  in  one  case  a  mortgage  was  executed  to  a  person  as 
"  the  agent  and  trustee  of  the  several  subscribers  to  the 
loan,"  which  was  of  large  amount ;  the  mortgagee  was 
allowed  to  file  a  bill  for  foreclosure  in  his  own  name,  without 
bringing  the  beneficiaries  into  the  action.'  The  complaint 
in  such  a  case  should  state  that  the  foreclosure  is  for  the 
benefit  of  the  bondholders,  and  that  they  are  too  numerous 
to  be  made  parties.* 

§  III.  Beneficiaries — When  not  necessary  parties. — 
In  the  foreclosure  of  railroad  mortgages  this  limitation  has 
become  so  well  established  as  to  be  a  separate  rule ;  the 
bondholders  are  never  necessary  nor  proper  parties  plantifl 
or  defendant,  but  there  may  be  circumstances  which  would 
authorize  the  court  to  admit  any  of  them  as  defendants  on 


199  (1852),  holding  that  the  benefl-  Mortgages,  §374.      In  point.  Swift 

ciaries  are  unnecessary  parties.     See  v.    Stebbins,   4    Stew.  «S5  P.   (Ala.) 

Wood   V.    Harman,   5    Madd.   368  447  (1833).    In  Carpenter  v.  Canal) 

(1820) ;  Locke  v.  Lomas,  5  DeG.  &  Co.,  35  Ohio    St.    307    (1880),   the 

S.  326.(1852);  8.  c.  16  Jur.  814(1852).  lienholders  were  so  numerous  that 

But  where  the  trustee  had  died,  it  it     was     impracticable     to    bring 

was  deemed  best  to  make  the  cestui*  them  all  before  the  court,  and  one, 

que  trust  parties,  Stansfield  v.  Hob-  as  trustee,  prosecuted  for  all.     See 

son,  16  Beav.  189  (1852).  Bardstown  &  Louisville  R.   R.  Co. 

'  Large  v.  Van  Doren,  14  N.    J.  r.    Metcalfe,    4   Met.    ( Ky. )    199 

E%.  (1  McCart.)  208  (1862) ;  Davis  v.  (1862). 

Hemingway,  29  Vt.  438  (1 857).    See         «  Willink  v.  Morris  Canal  Banking 

Fisher    on    Mortgages,    §373,    for  Co.,  4  N.  J  Eq.  (3  H.  W.  Gr.)  377 

English  cases;    Minn  v.    Stant,  13  (1843). 

Beav.  190  (1849) ;  s.  c.  15  Beav.  49  ;         *  Carpenter  v.   Blackhawk   Gold 

Browne  ▼.  Lockhart,  10  Sim.  426  Mining  Co.,   65  N.  T.  43  (1875); 

(1840).  King  v.  The  Merchants'  Exchange 

«  See  post,  §§  112, 186,  for  English  Co.,  5  N.  T.  547  (1851). 
and  other  authorities ;    Fisher    on 


128  FOEECLOSUEE   BY   BENEFICIAEIES.  [§112. 

their  own  application.'  Another  limitation  to  the  general 
rule  is  made  in  cases  where  a  trustee  is  appointed  to  receive 
and  administer  a  fund  for  the  benefit  of  creditors ;  he  may 
foreclose  without  bringing  the  creditors  before  the  court.' 
In  some  cases  the  creditors  are  so  numerous  that  it  would 
be  simply  impossible  to  make  all  of  them  parties  to  the 
action  ;  furthermore,  creditors  are  often  decribed  as  a  class, 
and  not  by  their  individual  names. 

§  112.  Beneficiaries,  cestuis  que  trust,  may  sometimes 
foreclose. — It  is  stated  by  Justice  Story,  on  the  authority  of 
English  cases,  that  a  beneficiary,  or  cestui  que  trust,  may 
maintain  an  action  for  the  foreclosure  of  a  mortgage 
belonging  to  his  trust  estate,  or  in  which  he  has  an  interest.* 
So  one  or  two  beneficiaries  may  bring  a  foreclosure  for 
themselves  and  other  beneficiaries,*  especially  if  the  trustee 
is,  for  any  reason,  disqualified  from  acting.*  But  in  such 
cases  it  also  necessary  to  make  the  trustee  a  party  plaintiff 
or  defendant  to  the  action,  as  the  legal  title  to  the  mortgage, 


'  See  Jones  on  Railroad  Securities,  Co.,  35  Pa.  St.  30  (1860),  where  the 

§§431,  437.  cestuis    que   trust    were   numerous 

*  Christie  v.  Herrick,  1  Barb.  Ch,  bondholders,  and  the  trustee  was  for 
(N.  Y.)  254  (1845).  some  reason  disqualified  from  acting ; 

»  Ala.   Life  Ins.   &  Trust  Co.  v.  also  Davis  v.  N.  Y.  Concert  Co.,  41 

Pettway,  24  Ala.  544  (1854) ;  Carra-  Hun  (N.  Y.)  492  (1886),  where  the 

dine  V.  O'Connor,  21  Ala.  573  (1852) ;  trustee    for  numerous  bondholders 

Marriott  v.  Givens,  8  Ala.  694  (1846);  refused  to  foreclose  at  their  request. 

McGowan  v.  Branch  Bank  Mobile,  Winton's   Appeal,    87    Pa.    St.    77 

7  Ala.  823  (1845) ;  Somes  v.  Skinner,  (1878).    In  Bank  of  Commerce  v. 

16  Mass.  848  (1820) ;  Martin  v.  Mc-  Lanahan,  45  Md.  396  (1876),  a  deed, 

Reynolds,  6  Mich.  70  (1858) ;  Hack-  intended  as  a  mortgage,  was  executed 

ensack  Water  Co.  v.  DeKay,  36  N.  to  one  of  a  number  of  creditors  to 

J.  Eq.  (9  Stew.)  548  (1883)  ;  Mitch-  secure  his  own  claim  and  the  claims 

ell  V.  McKinney,  6  Heisk.  (Tenn.)  of  others  ;  it  was  held  that  the  c^i'ww 

83(1871);  Wood  V.Williams,  4  Madd.  que    trust    could    not    maintain  an 

186  (1819) ;  Hichens  v.  Kelly,  2  Sm.  action  for  foreclosure,  although  the 

&  G.    264   (1854);    Story   Eq.   PI.  grantee  in  the  deed  was  a  trustee, 

§§  201,  209.    See  N.  Y.  Code  Civ.  and  the  other  creditors  were  benefi- 

Proc.  §  449.  claries.    But  in  Dorsey  v.  Thomp- 

*  Berry  v.   Bacon,   28  Miss.   818  eon,  37  Md.  25  (1872),  the  cestuis  que 
(1854).  trust  foreclosed  a  mortgage,  making 

*  See  Ashhurst  v.  Montour  Iron  the  trustee  a  defendant. 


§  113.]    FORECLOSUKE   BY   SUCCESSOES   IN   OFFICE.  129 

if  not  the  equitable  title,  is  vested  in  him.'  The  best 
practice  is  for  the  trustee  and  the  beneficiary  to  unite  as 
co-plaintifTs.* 

§  113.  Mortgages  to  persons  in  ofificial  capacity;  they 
or  their  successors  may  foreclose. — A  person  to  whom  a 
bond  and  mortgage  are  executed  in  an  official  capacity  may 
foreclose  the  same  in  his  own  name  as  such  officer,  as  he 
holds  the  entire  legal  title  ;  the  real  party,  who  equitably 
owns  the  fund,  is  not  held  a  necessary  party  to  the  action. 
So  also  a  successor  in  office  may  foreclose  in  his  own  name 
as  such  officer,  as  the  courts  hold  him  to  be  the  equitable 
assignee  of  the  security.*  His  predecessor,  in  whose  name 
the  mortgage  was  taken,  need  not  be  brought  into  the  action, 
and  upon  his  death  his  personal  representatives  are  not 
necessary  parties.  The  rule  of  this  section  is  in  harmony 
with  the  principles  stated  in  §§  107  and  no,  as  to  executors, 
administrators  and  trustees.  Thus  the  successor  of  a 
receiver  of  an  insolvent  corporation  is  allowed  to  sue  in  his 
own  name  as  such  receiver.*  Illustrations  may  be  taken 
from  the  reported  cases,  where  mortgages  have  been  given  to 
guardians  of  infants*  and  lunatics,"  to  the  comptroller  of  a 


*  In  Hays  v.  Lewis,  21  Wis.  663  mortgage  were  turned  over  by  an 
(1867),  the  trustee  was  held  an  indis-  administrator  to  a  guardian  as  a  part 
pensable  party,  and  it  was  questioned  of  his  ward's  distributive  share.  In 
■whether  the  cestuia  que  trust  alone  Commonwealth  v,  Watmough,  12 
could  maintain  an  action  for  fore-  Pa.  St.  316  (1849),  a  mortgage  was 
closure.  executed  to  a  guardian  ;  the  wards, 

*  See  ante  §§  110,  111  and  notes.  on  becoming  of  age,  assigned  their 
» Iglehart  v.   Bierce,   36  HI.   133  interests,  and  the  assignee  was  held 

(1864);  Hiatt  v.  The    State-Kitsel-  to   have    the    full    legal    title   and 

man,  110  Ind.  472(1886);  Vanarsdall  allowed  to  foreclose.    See  Caulkins 

V.  The  State,  65  Ind.  176  (1879).  v.  Bolton,  98  N.  Y.  511  (1885) ;  Nor- 

*  Leavitt  v.  Pell,  27  Barb.  (N.  Y.)  ton  v.  Ohrens,  (Mich.)  12  West.  Rep. 
822  (1858) ;  affirmed  25  N.  Y.  474  415  (1888) ;  MiUer  v.  Clark,  56  Mich. 
(1862);  Iglehart  v.  Bierce,  36  111.  133  337  (1885). 

(1864).  6  See  Peabody  v.  Peabody,  59  Ind. 

»Lyon  V.   Lyon,    67  N.   Y.   250  556  (1877),  for  an  action  brought 

(1876) ;  Cleveland  v.  Cohrs,  10  Rich.  by  a  guardian  or  committee  of  a 

(S.   C.)  224   (1878).     In  Walter  v.  lunatic  to  foreclose  a  mortgage  exe- 

Wala,  10  Neb.  123  (1880),  a  note  and  cuted  to  the  lunatic  while  sane. 

(9) 


130  FORECLOSUEE    BY    ^[ARr.IED    WOMAX,  [§114. 

state,'  to  the  state  superintendent  of  insurance,"  to  United 
States  loan  commissioners,'  and  to  personal  representatives* 
and  trustees/  It  is  not  necessary  for  a  general  guardian,  to 
whom  as  such  a  mortgage  has  been  assigned,  to  join  his 
ward  as  a  party  in  an  action  for  foreclosure.* 

§  114.  A  married  woman  owning  a  mortgage  may 
foreclose. — It  is  now  a  universal  principle  of  law  in  England 
and  in  America  that  a  married  woman  can  own  and  control  a 
separate  estate  in  real  and  in  personal  property,  and  that  she 
is  entitled  to  all  the  rights  and  remedies  pertaining  to 
property  which  2.  feme  sole  possesses,  and  may  enforce  them 
as  fully  in  the  courts.  She  can  own  and  foreclose  a  bond 
and  mortgage  in  her  own  name,  and  it  is  not  necessary  for 
her  to  make  her  husband  a  party  to  the  action,  as  he  can 
have  no  interest  in  it.*  Where  a  bond  and  mortgage  were 
executed  to  a  husband  and  wife,  the  wife  was  held  entitled  to 
foreclose  in  her  own  name  on  the  death  of  the  husband,  upon 
the  ground  of  survivorship  in  joint  ownership  ;*  and  it 
appearing  that  the  money  was  actually  loaned  by  the  wife, 
that  fact  was  held  as  another  circumstance  which  entitled 
her  to  foreclose  in  her  own  name.  And  so  a  discharge  by  a 
husband  of  a  mortgage  executed  to  him  and  his  wife,  but 


1  Flagg  V.  Hunger,   9  N.  Y.   483  5  N.  T.  144  (1851) ;  Powell  v.  Tut- 

(1854),  holding  that  the  the  comp-  tie,   3  N.  Y.   396  (1850) ;  Wood  v. 

troUer  of  New  York  had  power  to  Terry,  4  Lans.   (N,  Y.)  80  (1871). 

foreclose  a  mortgage  assigned  to  him  The  foreclosure  of  United  States  loan 

by  a  bank  to  secure  the  redemption  mortgages  is  strictly  statutory,  and 

of  its  notes  ;  so  to  the  treasurer  of  is  governed  by  the  laws  of  the  United 

the  state  of  New  Jersey,  Townsend  States  ;   Laws  of  1837,  Ch.  150. 

V.  Smith,  12  N.  J.  Eq.  (1  Beas.)  350  *  See  ante  §  106. 

(1858) ;  Supervisors  of  Iowa  Co.  v.  *  See  ante  §  110. 

Mineral  Point  R.  R.,   24  Wis.   93  «  Bayer  v.  Phillips,  17  Abb.  (N.  Y.) 

(1869).     See    Delaplaine  v.    Lewis,  N.   C.   425  (1886),   with  foot  note. 

Governor,  etc.,  19  Wis.  476  (1865).  N.  Y.  Code  Civ.  Proc.  §  1686. 

»  Smith  V.  Lombardo,  15  Hun  (N.  '  Bartlett   v.    Boyd,    34  Vt.   256 

Y.)  415  (1878),  where  the  action  was  (1861).     So  she  can  assign  her  mort- 

in  the  name  of  the  deputy.  gage  ;    Kamena  v.  Huelbig,  23  N. 

»  Thompson  v.  Comm'rs,  79  N.  Y.  J.  Eq.  (8  C.  E.  Gr.)  78  (1872). 

54  (1879) ;  York  v.  Allen,  30  N.  Y.  «  Shockley  v.  Shockley,  20  Ind. 

104  (1864);  Pell  v.  Ulmar,   18  N.  108(1863). 
Y.   139  (1858) ;  Olmstead  v.  Elder, 


§114.]  FOKECLOSUKE   BY   MAREEED    WOMAK.  131 

really  belonging  to  her,  will  not  prevent  her  foreclosing.* 
The  marriage  of  a  mortgagee,  a  fejne  sole,  to  a  mortgagor 
will  not  extinguish  the  mortgage  ;  the  mortgage  remains 
unaffected  and  may  be  foreclosed.'  A  husband  can  execute 
a  valid  mortgage  on  his  lands  to  his  wife,  who  can  foreclose 
against  him.*  She  can  also  foreclose  a  mortgage  assigned  to 
her  on  her  husband's  lands.  The  assignment  does  not 
operate  as  a  discharge  of  the  mortgage.* 


'  McKinney  v.  Hamilton,  51  Pa.  Wochoska,  45  Wis.  423  (1878) ;  Put 

St.  63  (1865).  nam  v.  BickneU,  18  Wis.  333  (1864). 

•  This  has  been  the  law  in  New  Such  a  mortgage  was  held  void  in 

York  since  the  act  of  1848.    Power  Terry  v.  Wilson,  63  Mo.  493  (1876). 

V.  Lester,  17  How.  (N.  T.)  Pr.  413  *  Bean  v.  Boothby,  57  Me.  295 

(1858) ;  affd  23  N.  T.  527  (1861),  a  (1869) ;    Trenton   Banking   Co.    v. 

leading  case.  Woodruff,  2  N.  J.  Eq.  (1 H.  W.  Qr.) 

•Mix  y.  Andes  Ins.  Co.,  9  Hun  117(1838). 
(N.  Y.)  397  (1876);  Wochoska  T. 


CHAPTER    VL 

PARTIES  DEFENDANT— KECESSARY  TO  PERFECT  THE  TITLB. 


OWNERS  OF  THE  FEE  TITLE. 


§  115.  Introductory. 

116.  General  principles. 

117.  Mortgagor,  still  owning  the 

equity  of  redemption,  neces- 
sary. 

118.  Mortgagor,  no  longer  owning 

the  equity  of  redemption, 
not  necessary. 

119.  Mortgagor  always  a  desirable 

defendant. 

120.  Mortgagor,  still  owning  only 

a  divided  or  undivided  part 
of  the  premises,  or  being  a 
tenant  in  common  by  de- 
scent or  grant,  a  necessary 
party. 

121.  Mortgagor,  being  a  tenant  in 

common  or  by  the  entirety, 
a  necessary  defendant. 

122.  Joint  mortgagors— Survivor- 

ship. 

123.  Mortgagor,  still  holding  any 

kind  of  an  equitable,  con- 
tingent or  latent  interest, 
generally  necessary — Sher- 
iff's execution  sale. 

124.  Vendor  and    vendee    under 

land  contract  necessary. 

125.  Parties  to  deeds  for  security, 

in  escrow  or  in  fraud,  nec- 
essary. 

126.  Purchaser  and  owner  of  the 

equity  of  redemption  by 
grant  or  otherwise  from  the 
mortgagor  necessary. 

127.  Owner  of  mortgaged  premises 

omitted  as  defendant — Ef- 
fect. 

128.  Remedies  of  omitted  owner 

of  mortgaged  premises. 

129.  Mesne  owners  of  the  equity 

of  redemption,  no  longer 
owners,  generally  not  neces- 
sary. 


130.  Purchaser  pendente  lite  not 

necessary. 

131.  Common  law  doctrine  of  li$ 

pendens. 

132.  New  York  statutory  provis- 

ions for  lis  pendens ;  other 
states. 

133.  Effect  on  parties  of  omitted 

or  defective  lis  pendens. 

134.  Mortgagor  a  married  woman, 

having  a  separate  estate, 
necessary. 

135.  "Wife  of  mortgagor  or  owner 

of  the  equity  of  redemption 
necessary. 

136.  Wife  not  executing  mortgage 

— Her  remedies  if  omitted 
as  defendant. 

137.  Wife  of  mortgagor ;  service 

of  summons  or  process 
under  early  practice. 

138.  Wife  of  mortgagor ;  service 

of  summons  under  present 
practice. 

139.  Wife  of  mortgagor  or  owner 

of  equity  of  redemption,  not 
necessary  in  those  states 
where  the  common  law 
doctrine  of  dower  has  been 
changed. 

140.  The  husband  of  a  mortgagor 

who  is  a  married  woman, 
having  a  separate  estate, 
generally  not  necessary. 

141.  Heirs  of  mortgagor  or  owner 

of  the  equity  of  redemption 
necessary. 

142.  Heirs  of  mortgagor  or  owner 

— When  not  necessary. 

143.  Devisees  of  mortgaged  prem- 

ises necessary. 

144.  Legatees  and  annuitants  nec- 

essary. 

145.  Executors  and  administrators 

generally  not  necessary. 


133 


§  115.]   NECESSARY  AND  PEOPEE  DEFENDANTS.      133 


146.  Trustees,  holding  an  interest 

of  whatever  kind  in  mort- 
gaged premises  for  benefi- 
ciaries, necessary. 

147.  Cestnis  que  trust  and  benefi- 

ciaries— When  necessary. 

148.  Cestuis  que  trust — When  not 

necessary. 

149.  Statutes  making  Gestuia  que 

trust  necessary. 

150.  Remaindermen    and    rever- 

sioners necessary. 

151.  A  defendant  in  esse  necessary. 

152.  Assignee  in  bankruptcy  or  by 

voluntary  general  assign- 
ment, and  receiver,  neces- 
sary. 


§  153.  Assignee  in  bankruptcy  per^ 
dente  lite  not  necessary. 

154.  Infants,  lunatics,  idiots  and 

habitual  drunkards  neces- 
sary parties. 

155.  Mortgage    executed    by   ad- 

ministrator or  executor  to 
pay  decedent's  debts  ;  heirs 
and  devisees  of  the  decedent 
necessary. 

156.  Corporations  necessary  par- 

ties by  corporate  name. 

157.  Tenants  and  occupants  neces- 

sary. 


§  115.  Introductory. — Most  text-book  writers  have  con- 
sidered the  subject  of  parties  defendant  to  mortgage  fore- 
closures under  the  sub-divisions  of  necessary  parties  and 
proper  parties.  Mr.  Jones'  has  defined  a  necessary  party  as 
"  one  whose  presence  before  the  court  is  indispensable  to  the 
rendering  of  a  judgment  which  shall  have  any  effect  on 
the  property  ;  without  whom  the  court  might  properly  refuse 
to  proceed,  because  its  decree  would  be  practically  nugatory." 
This  definition,  however,  can  not  be  considered  logical,  nor 
in  accordance  with  the  decisions  of  the  courts  ;  for  at  present 
no  one  can  be  said  to  be  a  necessary  party  in  order  to  main- 
tain the  action,  nor  necessary  in  the  sense  that  his  omission 
would  defeat  the  action  or  render  the  decree  absolutely  void. 

The  words  "  necessary  "  and  "  proper  "  are  used  with  much 
looseness,  inaccuracy  and  uncertainty  of  definition  in  the 
courts  of  our  various  states, — apparently  in  disregard  of 
the  fact  that  the  words  are  relative  in  signification,  and  that 
they  should  be  used  as  descriptive  of  parties,  only  with 
reference  to  the  purposes  for  which  the  parties  are  made 
defendants  to  the  foreclosure.  Under  the  above  definition 
neither  an  owner  of  a  part  or  of  the  whole  of  an  equity  of 
redemption,  nor  a  subsequent  lienor,  nor  any  other  person 
interested  in  the  subject-matter  of  the  action,  can  be  called 
a  necessary  party. 


'  Jones  on  Mortgages,  §  1394. 


134  WnO    NECESSARY    DEFENDANTS.  [§116. 

To  make  a  logical  analysis  of  the  subject  of  parties  defen- 
dant to  foreclosures,  it  will  be  necessary  to  divide  the  subject 
according  to  the  purposes  for  which  the  parties  are  brought 
into  the  action.  This  chapter  will  be  given  to  the  consider- 
ation of  parties  who  are  necessary  defendants  for  the  purpose 
of  extinguishing  or  of  cutting  off  the  entire  equity  of 
redemption,  and  the  interests  of  all  persons  who  claim  under 
the  owner  of  the  equity  by  subsequent  mortgages,  judgments 
or  otherwise, — that  is,  of  parties  who  are  necessary  in  order 
to  exhaust  every  remedy  against  the  land  for  the  collection 
of  the  mortgage  debt,  and  in  order  to  produce  a  perfect  title 
at  the  sale,  or  such  a  title  as  the  courts  will  compel  a  bidder 
to  accept.  The  word  "  necessary  "  will  be  used  throughout 
the  work  in  this  sense  alone;  the  word  "proper"  can  not 
enter  into  the  analysis,  for  it  is  too  uncertain  in  meaning, 
and  conveys  the  idea  that  there  may  be  an  option  on  the 
part  of  the  plaintiff  as  to  whether  he  will  bring  a  party  into 
the  action  or  not. 

For  convenience  of  treatment  and  to  make  a  logical  division 
of  this  part  of  the  work,  parties  defendant  will  be  considered 
in  this  and  the  following  chapter  under  the  heads  of  Owners 
of  the  Fee  Title,  and  Subsequent  Mortgagees  and  Lienors.  In 
this  chapter  exclusive  attention  will  be  given  to  parties  who 
own  the  equity  of  redemption  in  the  mortgaged  premises,  or 
who  have  any  interest  in  the  quality  or  the  quantity  of  the 
title.  In  the  following  chapter,  attention  will  be  given  to 
parties  holding  liens  and  incumbrances  upon  the  mortgaged 
premises  which  accrued  subsequent  to  the  execution  and 
delivery  of  the  mortgage  under  foreclosure. 

§  Ii6.  General  principles. —  Many  states  have  now 
codified  the  general  equitable  principle,  that  any  person  may 
be  made  a  defendant  to  an  action  who  has  or  claims  to  have 
an  interest  in  the  controversy  adverse  to  the  plaintiff,  or  who 
is  a  necessary  party  to  a  complete  determination  or  settle- 
ment of  the  questions  involved  therein.'  Applying  this 
principle  to  foreclosures,  it  may  be  said  that  any  person  who 


'  N.  Y.  Code  Civ.  Proc.  §  447  ;   Pomeroy's  Remedies,  §  271. 

See  ante  §§  70.  71. 


§  117.]         MOKTGAGOE   NECESSAET   DEFET^^DATTT.  135 

is  interested  in  any  way  in  the  mortgaged  premises,  or 
who  has  an  interest  in  the  mortgage  debt  adverse  to  that  of 
the  plaintiff,  may  be  made  a  defendant  in  the  action.  Thus 
the  owner  of  any  quantity  or  quality  of  estate  in  the 
premises,  even  in  the  remotest  degree  or  of  the  most  trifling 
value,  becomes  as  necessary  a  party  defendant  to  perfect  the 
title  as  the  sole  owner  of  the  entire  equity  of  redemption. 
The  holder  of  a  lien  by  mortgage,  judgment  or  any  contin- 
gent equity,  is  also  generally  a  necessary  defendant. 

The  primary  object  of  the  suit  is  to  divest  the  title,  which 
existed  in  the  mortgagor  at  the  instant  of  the  delivery  of  the 
mortgage,  of  every  interest  which  he  or  those  claiming  under 
him  can  possibly  have  in  it.  If  any  such  party  is  omitted,  he 
stands,  of  course,  unaffected  by  the  action,  and  the  decree 
produced  will  be  defective.  It  matters  not  how  valueless  or 
remote  any  interest  may  be ;  it  is  of  the  utmost  impor- 
tance that  it  be  brought  within  the  jurisdiction  of  the  court, 
so  that  it  may  be  extinguished.  The  omitted  party  has, 
moreover,  a  right  to  redeem,  and  may  thus  put  a  purchaser 
of  a  defective  title  to  endless  trouble  and  expense  in  defend- 
ing an  estate  which  should  have  been  perfected  in  the  original 
action. 

§  117.  Mortgagor,  still  owning  the  equity  of  redemp- 
tion, necessary. — If  the  mortgagor  continues  to  own  the 
equity  of  redemption,  he  is  for  all  purposes  a  necessary  party 
to  an  action  to  foreclose  a  mortgage;'  if  he  has  not  incum- 
bered the  property,  he  is  the  sole  necessary  defendant,  and 
the  simplest  possible  case  of  foreclosure  exists.  "  There  is 
no  doubt  that  the  owner  of  the  equity  of  redemption  is  a 


'  Eaynor  v.  Selmes,  53  N.  Y.  579  Hughes  v.  Patterson,  23  La,  An.  679 
(1873),  reversing  7  Lans,  (N.  Y.)  440  ;  (1871).  For  the  English  authorities, 
Kay  V.  Whittaker,  44  N.  Y.  565,  see  Fisher  on  Mortgages,  §  298 ; 
572  (1871) ;  Griswold  v.  Fowler,  6  Fell  v.  Brown,  2  Bro.  Ch.  276 
Abb.  (N.  Y.)  Fr.  113  (1857) ;  Keed  (1787) ;  Palk  v.  Clmton,  12  Ves.  48 
V.  Marble,  10  Paige  Ch.  (K  Y.)  409  (1806) ;  Thomson  and  Baskerville 
(1843) ;  Lane  v.  Erskine,  13  111.  501,  Case,  3  Rep.  in  Ch.  215  (1688).  For 
503  (1851),  authorities  collated  by  a  mortgage  of  a  life  estate,  see  Hun- 
Treat,  Ch.  J. ;  followed  in  Harvey's  ter  v.  Macklew,  5  Hare,  238  (1846). 
Adm's  V.  Thornton,  14111.  317  (1852);  See  post  §§  126-128,  and  notes. 


136  MOETGAGOE NECESSAEY    WHEN.  [§  117. 

necessary  party  to  a  suit  for  the  foreclosure  of  a  mortgage. 
The  mere  statement  of  this  proposition  is  sufficient  to  show 
its  correctness,  without  the  citation  of  any  authorities  in  its 
support.  The  action  is  brought  for  the  express  purpose  of 
foreclosing  the  equitable  estate  and  right  to  redeem  remain- 
ing against  the  mortgage,  and  of  transferring  to  the  purchaser 
at  a  sale  by  virtue  of  the  decree,  a  complete  legal  title  to  the 
mortgaged  premises.  The  very  object  of  the  proceeding 
would,  therefore,  be  completely  defeated  if  the  owner  of  the 
equity  of  redemption  were  not  a  party.  No  title  could  be 
made  that  would  not  be  defeasible  by  the  person  in  whom 
this  equity  of  redeeming  the  mortgage  remained,  not  barred 
or  destroyed."*  If  there  are  two  or  more  mortgagors,  all  are 
necessary  defendants  ;  one  can  not  represent  the  others.^  If 
the  title  is  held  by  a  husband  and  wife  as  tenants  by  the 
entirety,  both  will  be  necessary  defendants.'  And  if  com- 
munity lands,  held  by  tenants  in  common,  are  mortgaged,  all 
of  the  owners  will  be  necessary  defendants.*  A  person  who 
has  signed  a  note,  for  which  another  person  executes  a  mort- 
gage as  collateral  security,  is  not  a  necessary  party  to  a 
foreclosure,  as  he  has  no  interest  in  the  land  ;*  he  can  be 
made  a  defendant,  however,  if  a  judgment  for  deficiency  is 
sought  against  him. 

If  the  mortgagor  has  conveyed  the  premises  by  an  instru- 
ment which  remains  unrecorded,  he  is  still  a  necessary  party, 
as  the  record  continues  to  show  the  title  in  him  ;'  it  would 


I  Hall  V.  Nelson,  23  Barb.  (N.  Y.)  (Ky.)  301  (1830),  per  Robertson.  Ch. 

90  (1856) ;  s.  c.  14  How.  (N.  Y.)  Pr.  J.     See  post  §  122,  on  joint  mort- 

32,  per  Eraott,  .J. ;  Watson  v.  Spence,  -gagors. 

20  Wend.   (N.  Y.)  260  (1838),  per  ^  Curtis  v.    Gooding,  99  Ind.   45 

Cowen,  J.;    Buckner  v.  Sessions,  27  (1884). 

Ai'k.  219  (1871)  ;  Cox  v.  Vickers,  35  *  Johnson  v.  San  Francisco  Sav. 

Ind.  27  (1870)  ;  Lenox  v.  Reed,  13  Union,  63  Cal.  554(1883). 

Kan.   223,  228  (1873)  ;  Champlin  v.  ^  Deland  v.    Mershon,    7    Clarke 

Foster,  7  B.  Mon.  (Ky.)  105  (1846).  (Iowa),  70  (1858). 

In  Louisiana  a  curator  will  be  ap-  '  Hall  v.  Nelson,  23  Barb.  (N.  Y.) 

pointed  by  the  court  to  represent  the  88  (1856)  ;  Kipp  v.  Brandt,  49  How. 

mortgagor,  if  he   is  a  non-resident  (N.   Y.)  Pr.   358  (1875j  ,  Ostrom  v. 

or  hides  himself  ;  Lasere  v.   lioclie-  McCann,  21  How.  (N.  Y.)  Pr.  431 

reau,   21  La.  An.  205  (1869).  (I860);  Boice  v.  Mich.  Mut.  Life  Ins. 

*  Slucktirv.  Sluckcr,  3J.  J.  Marsh.  Co.,    (Mich.)    13    West.    Rep.    3?7 


118.]        MOETGAGOR NOT   NECESSAEY   WHElf.  137 


be  unsafe  at  least  to  omit  such  a  mortgagor.  It  is  believed 
that  the  safest  and  securest  practice  is,  always  to  make  the 
mortgagor  a  party,  if  he  can  be  easily  served  with  the  sum- 
mons.* If  the  mortgagor  has  contracted  to  sell  and  convey 
the  premises,  he  remains  a  necessary  party  in  order  to  cut 
off  the  entire  equity  of  redemption,  even  though  the  contract 
be  under  seal  and  recorded.* 

In  strict  foreclosures,'  and  also  in  foreclosures  by  adver- 
tisement under  statute,  the  mortgagor,  or  those  succeeding 
to  his  interests,  are  necessary  parties  defendant  ;*  the  statute 
must  be  strictly  followed  in  the  service  of  the  required  notice 
upon  the  necessary  parties.* 

§  ii8.  Mortgagor,  no  longer  owning  the  equity  of 
redemption,  not  necessary. — A  mortgagor  who  has  made  an 

absolute  conveyance  of  all  his  interest  in  mortgaged  premises 
is  not  a  necessary  party  to  a  foreclosure  for  the  purposes  of 
perfecting  the  title  and  of  exhausting  all  remedies  against 
the  land   for  the  collection  of  the  debt  ;*  neither  are  the 


(1888).     See  N.  Y.  Code  Civ.  Proc. 
§§  1670,  1671.  and  post  §  132. 

'  See  post  §  129,  on  intermediate 
purchasers. 

*  Crooke  v.  O'Higgins,  14  How. 
(N.  Y.)  Pr.  154  (1857).  See  post 
%%  120,  121. 

*  Hornby  v.  Cramer,  12  How.  (N. 
Y.)  Pr.  490  (1855). 

*  Robinson  v.  Ryan,  25  N.  Y.  320 
(1862) ;  Cole  v.  Moffitt,  20  Barb.  (N. 
Y.)  18  (1854)  ;  Stanton  v.  Kline,  16 
Barb.  (N.  Y.)  9  (1852);  VanSlyke 
V.  Shelden,  9  Barb.  (N.  Y.)  278 
(1850). 

6  Mowry  v.  Sanborn,  65  X.  Y.  581 
(1875). 

«  Daly  V.  Burchell,  13  Abb.  (N.  Y.) 
Pr.  N.  S.  264,  268  (1872)  ;  Griswold 
V.  Fowler,  6  Abb.  (N.  Y.)  Pr.  113 
(1857) ;  VanNest  v,  Latson,  19 
Barb.  (N.  Y.)604,  608(1855);  Cherry 
V.  Monro,  2  Barb.  Ch.  (N.  Y.)  627 
(1848);  Rhodes  v.  Evans,  Clarke  Ch. 
(N.    Y.)    108    (1840);    Trustees    v. 


Yates,  1  Hoff.  Ch.  (N.  Y.)  142  (1839); 
Drury  v.  Clark,  16  How.  (N.  Y.)Pr. 
428  (1857)  ;  Crooke  v.  O'Higgins,  14 
How.  (N.  Y.)  Pr.  154  (1857)^  Bram 
v.  Bram,  34  Hun  (N.  Y.)  487,  491 
(1885) ;  Root  V.  Wright,  21  Hun(N. 
Y.)  344,  348  (1880),  reversed  in  part, 
but  not  as  to  this  point,  in  84  N.  Y. 
72  (1881) ;  Whitney  v.  McKinney,  7 
Johns.  Ch.  (K  Y.)  144  (1«23) ;  Bige- 
low  V.  Bush,  6  Paige  Ch.  (N.  Y.) 
343  (1837)  ;  Horn  v.  Jones,  28  Cal. 
194  (1865) ;  Boggs  v.  Fowler,  16  CaL 
559  (1860) ;  Swift  v.  Edson,  5  Conn. 
534  (1825);  Bennett  v.  Mattingly, 
110  Ind.  197  (1886);  Stevens  v. 
Campbell,  21  Ind.  471  (1803) ;  Burk- 
ham  V.  Beaver,  17  Ind.  367  (1861) ; 
Shaw  V.  Hoadley,  8  Blackf.  (Ind.) 
165  (1846) ;  Johnson  v.  Monell,  13 
Iowa,  300,  303  (1862);  Jones  v. 
Lapham,  15  Kan.  540  (1875) ;  Bailey 
v.  Myrick,  36  Me.  50  (1853) ;  True 
v.  Haley,  24  Me.  297  (1844);  Os- 
borne v.  Crump,  57  Miss.  622  (1880); 


loS  MORTGAGOR PROPER    WHEN.  [§118. 

assignees  in  bankruptcy,  nor  the  heirs,  nor  the  personal 
representatives^  of  such  a  mortgagor  necessary  parties.'  But 
a  mortgagor  who  has  sold  his  equity  of  redemption  by  a 
warranty  deed,  may  be  made  a  party  defendant  on  his  own  ap- 
pHcation ;  so  also  if  he  has  any  other  interest  in  the  foreclos- 
ure, but  if  he  fails  to  show  a  real  interest  in  the  action  when 
admitted,  the  court  will  subsequently  dismiss  him  from  it.* 

The  decisions  are  clear  and  uniform  in  sustaining  these 
propositions,  and  it  is  only  in  exceptional  cases  and  for 
special  reasons  that  a  court  will  require  a  mortgagor,  who 
has  parted  with  his  entire  interest  in  the  property,  to  be 
brought  in  if  the  plaintiff  has  omitted  him.*  The  mortgaged 
premises  are  always  the  primary  fund  for  the  payment  of  the 
debt,  and  a  grantee  has  no  right  to  object  if  the  mortgagor 
is  not  made  a  party  to  the  bill  of  foreclosure.*  Neither  will 
the  objection  of  any  other  defendant  be  considered,  unless 
he  shows  that  his  interests  will  be  prejudiced  by  the  omission 
of  the  mortgagor.*  It  is  only  when  the  party  against  whom 
the  mortgagee  asks  a  personal  judgment  for  deficiency  is  a 
mere  surety  of  the  mortgagor,  that  he  can  insist  that  the 
latter  be  made  a  defendant  and  that  the  plaintiff's  remedy 
against  him  for  the  deficiency  in  the  property  be  exhausted 


Andrews  v.  Stelle,  23  N.  J.  Eq.  (7  7  Sim.  317  (1835) ;  Fisher  on  Mort- 

C.  E.  Gr.)  478  (1871).     In  Crenshaw  gages,  §  306. 

V.  Thackston,  14  S.  C.  437  (1881),  »  Huston  v.  Stringham,  21  Iowa, 

such  a  mortgagor  was  held  a  neces-  36  (1866) ;  Gifford  v.  Workman,  15 

eary  party.  Wright  v.  Eaves.lO  Rich.  Iowa,  34  (1863). 

(S.  C.)  Eq.    583  (1858)  ;    Buchanan  *  Mims  v.  Mims,  35  Ala.  23  (1859) 

V.    Monroe.    32    Tex.    537    (1858)  ;  Swift  v.  Edson,  5  Conn.  534  (1825) 

Miner  v.  Smith,  53  Vt.  551  (1881) ;  Lane  v.  Erskine,  13  Dl.  501  (1851) 

Delaplaine  -v.  Lewis,   19  Wis.  476  Shaw  v.  Hoadley,  8  Blackf.  (Ind.) 

(1865)  ;     Brown    v.    Stead,    5  Sim.  165  (1846) ;  Murray  v.  Catlett,  4  G. 

585  (1832).     Fisher  on  Mortgages,  Greene  (Iowa),  108  (1853) ;  Vreeland 

§  305.  V.  Loubat,  3  N.  J.  Eq.  (1  H.  W.  Gr.) 

•  Rickards  v.  Hutchiuson,  18  Nev.  104,  105  (1858);  McGuffey  v.  Finley, 
215  (1883).  20   Ohio,   474  (1851) ;    1  PoweU  od 

*  Bryce  v.  Bowers,  11  Rich.  (S.  C.)  Mortgages,  405,  and  note  2. 

Eq.  41(1859).    For  the  English  cases,  »  Bigelow  v.  Bush,  6  Paige  Ch, 

see  Rochfort  v.  Battersby,  14  Jur.  (N.  Y.)  343,  346  (1837). 

239(1849);  Lloyd  V.Lander,  5  Madd.  «  Williams  v.  Meeker,   29  lowK 

282  (1821) ;  Collins  v.  Shirley,  1  R.  292,  294  (1870). 
&  M.  638  (1830);  Kerrick  v.  Saffery, 


§§  119-120.]         MOEIUAGOE  DESIEABLE.  139 

before  resorting  to  the  surety.'  If  there  are  equities  or 
disputes  between  the  grantee  and  the  mortgagor,  they  must 
be  settled  in  another  suit.* 

§  119.    Mortgagor  always  a  desirable  defendant. — It 

is  nearly  always  desirable,  however,  to  make  the  mortgagor 
a  party  defendant,  even  if  he  does  not  continue  to  hold  the 
equity  of  redemption ;  it  is  against  him  especially  that  a 
judgment  for  deficiency  is  sought  on  his  bond  or  note  which 
the  mortgage  accompanies.*  There  may  be,  moreover,  latent 
or  secret  interests  to  be  cut  off,  which  he  continues  to  hold 
in  the  property;  creditors  may  attack  his  conveyance  as 
fraudulent ;  or  his  conveyance,  absolute  on  its  face,  may  be 
intended  only  as  a  collateral  security.*  Thus,  in  an  action 
to  foreclose  a  mortgage  and  to  correct  the  description  of  the 
premises,  both  the  mortgagor  and  his  grantee  have  been 
deemed  necessary  defendants ;'  and  the  grantor  of  a  trust 
deed  has  been  held  a  necessary  defendant  for  similar  reasons.* 
When  the  plaintiff  has  no  knowledge  or  suspicion  of  such 
equities,  or  fraudulent  conveyance  or  collateral  security 
deeds,  he  will  generally  be  bound  only  by  what  appears  on 
record. 

§  120.  Mortgagor,  still  owning  only  a  divided  or 
undivided  part  of  the  premises,  or  being  a  tenant  in 
common  by  descent  or  grant,  a  necessary  party.  —  As 

long  as  a  mortgagor  continues  to  own  any  part  of  the  title 
which  he  mortgages,  he  is  just  as  necessary  a  party  to  a 
foreclosure  as  he  would  be  if  he  continued  to  own  the  whole 
title. ^    A  mortgagee's  joining  with  his  mortgagor  in  a  deed 


»  Drury  v.  Clark,  16  How.  (N.  Y.)  (1821) ;  King  v.  Martin,  2  Ves.  Jr. 

Pr.    424,    431    (1857) ;    Bigelow   v.  641  (1795).     This  point  is  well  illu- 

Bush,  6  Paige  Ch.  (N.  Y.)343  (1837).  Btrated  by  the  litigation  in  Griswold 

5  VanNest    v.   Latson,   19    Barb.  v.  Fowler,  6  Abb.  (N,  Y.)  Pr.  113 

(N.  Y.)  604  (1855).  (1857) ;    Crooke    v.    O'Higgins,    14 

»  Root  V.  Wright,  21  Hun  (N.  Y.)  How.  (K  Y.)  Pr.  154  (1857). 

344,  348  ;  aff'd  84  N.  Y.  72  (1881) ;  '  Sickmon  v.  Wood,  69  111.  329 

Pelry  v.   Ambrosher,  100  Ind.  511  (1873). 

(1884)  ;  Stevens  v.  Campbell,  21  Ind.  «  Marsh  v.  Green,  79  HI.  385  (1875). 

471  (1863)  ;  Miller  v.  Thompson,  04  ■>  See  ante  %  117;  Taylor  v.  Porter, 

ilich.  10  (187G).     See  post  chap.  x.  7  Mass.  355  (1811) ;  Spiller  v.  Spiller, 

*  Lluyd  V.  Lander,  5  Madd.  282  1  Hayw.  (N.  C.)  L.  482  (1797). 


140  MOIITGAGOK   NECESSARY   PARTY WHEN.     [§  120. 

of  an  undivided  part  of  the  mortgaged  premises,  for  the  pur- 
pose of  releasing  his  mortgage  debt  on  that  part,  has  been  held 
inoperative  as  a  release.  The  mortgage  still  continued  a 
lien  on  the  entire  premises.*  A  mortgage  executed  by  a  ten- 
ant in  common  upon  his  undivided  interest  in  real  property 
will  not  affect  the  rights  of  his  co-tenants."  Such  a  mortgage 
can  not  be  enforced  against  the  mortgagor's  divided  part  of 
the  premises,  until  commissioners  in  partition  have  made  an 
actual  division  of  the  lands,  and  a  decree  has  been  entered 
adjudging  the  mortgage  a  lien  upon  his  part  alone.*  After  a 
mortgage  has  been  adjudged  by  a  decree  in  partition  to  be 
a  lien  upon  a  divided  instead  of  an  undivided  part  of  the 
premises,  the  mortgagee  will  be  confined  for  his  remedy 
exclusively  to  the  share  set  off  to  his  mortgagor.*  Thus,  in 
an  action  to  foreclose  a  land  contract  or  "  title  bond  "  of  an 
undivided  half  of  certain  premises,  the  vendee  of  the  remain- 
ing undivided  half  was  allowed  to  file  a  cross  bill  for  partition, 
and  to  have  a  decree  entered  that  the  divided  half  set  apart 
to  him  be  held  free  and  clear  of  the  lien  of  the  title  bond.* 

It  has  been  intimated  in  some  cases*  that  a  purchaser 
of  an  undivided  interest  in  mortgaged  premises  would  not 
be  an  absolutely  necessary  party ;  but  it  is  nowhere  ques- 
tioned that  a  mortgagor  still  owning  the  remaining  undivided 
interest  is  always  a  necessary  defendant.  The  above  inti- 
mation is  not  to  be  relied  upon  in  New  York  or  in  those 
states  where  foreclosure  is  generally  accomplished  by  an 
equitable  action. 


*  Torrey  v.  Cook,  116  Mass.  163  217  (1874) ;    CorneU  v.  Prescott,  2 
(1874),  per  Gray,  Ch.  J.  Barb.   (N.   Y.)  16  (1847).     See  also 

5  Marks  v.  Sewall,  120  Mass.   174  Loomis  v.  Riley,  24  Dl.  307  (1860) , 

(1876).  Williams  v.  Perry,  20  Ind.  437  (1868). 

«  Reid  V,  Gardner,  65  N.  Y.  578  « Frost  v.  Frost,  3  Sandf.  Ch.  (N. 

(1875) ;  Hatch  v.  Kimball,  14  Me.  9  Y.)  188  (1846) ;  Mims  v.  Mims,  85 

(1836) ;  Rich  v.  Lord,  35  Mass.  (18  Ala.  23  (1859) ;  Douglass  v.  Bishop, 

Pick.)  322  (1836)  ;  Colton  v.  Smith,  27  Iowa,   214,   216  (1869);  HuU  v. 

28    Mass.    (11    Pick.)    311    (1831) ;  Lyon,  27  Mo.  570  (1858)  ;  Crenshaw 

Stewart  V.  Allegheny  National  Bank,  v.  Thackston,  14  S.  C.  437  (1881); 

101  Pa.  St.  342  (1882).  Cholmondeley  v.  Clinton,  2  Jac.  & 

*  Kline  v.  McGuckin,  24  N.  J.  Eq.  W.  134  (1820) ;  Palk  v.  Clinton,  12 
(9  C.  E.  Gr.)  411  (1874\  Ves.  48,  59  (1806) ;  Jones  on  Mort- 

*  Hammond   v.    Perry,   38  Iowa,  gages,  §  1405. 


§§121-122.]  TENANTS   BY   ENTIKETY.  141 

§  121.  Mortgagor,  being  a  tenant  in  common  or  by 
the  entirety,  a  necessary  defendant. — The  owner  of  an 
undivided  interest  in  lands,  prior  to  the  execution  of  a 
mortgage  by  his  co-tenant,  is  not  a  necessary  party  to 
a  foreclosure.  If  he  is  made  a  defendant,  he  can  have  the  bill 
dismissed  as  to  himself ;  even  if  the  action  proceeds  to  a 
decree  and  sale,  the  judgment  will  not  be  binding  upon  him. 

One  of  four  joint  tenants  executed  a  mortgage  purporting 
to  convey  the  whole  estate;  on  foreclosure  the  remaining 
three  were  held  not  necessary  parties ;  and  even  if  they  had 
been  made  parties,  their  rights  would  not  have  been  con- 
cluded by  the  decree.'  Where  tenants  in  common  jointly, 
or  jointly  and  severally,  mortgage  property,  a  foreclosure 
can  not  be  maintained  against  one  of  them  separately  to 
collect  a  moiety  of  the  debt ;  the  action  must  be  against 
both  and  those  claiming  under  them.  Neither  can  either  of 
them  compel  the  mortgagee  to  receive  half  of  the  debt,  and 
thereby  relieve  him,  and  to  proceed  against  his  co-tenant  for 
the  collection  of  the  other  half.  The  interests  of  tenants  in 
common  in  such  cases  must  always  be  sold  together,  no 
matter  how  numerous  the  owners  may  be.*  If  the  mort- 
gaged premises  have  been  divided  and  conveyed  in  separate 
parcels,  as  frequently  happens,  all  the  owners  of  the  several 
parcels  must  be  made  defendants  to  the  foreclosure  in  order 
to  produce  a  perfect  title.* 

§  122.    Joint  Mortgagors— Survivorship.— It  has  been 

held  that  neither  the  heirs  nor  the  personal  representatives 
of  a  deceased  joint  mortgagor,  or  owner  of  the  equity  of 
redemption,  are  necessary  parties  to  a  foreclosure.  This 
rule  is  undoubtedly  based  upon  the  common-law  doctrine  of 
survivorship  in  cases  of  joint  tenancy.  But  as  it  is  frequently 
an  open  question  whether  a  title  is  held  by  persons  as  joint 
tenants  or  as  tenants  in  common,  it  is  the  safest  practice 
to  make   the   heirs  of  the  deceased  owner  parties  to  the 


>  Stephen  v.  Beall,  89  U.  8.  (22  (1859) ;  Peto  v.  Hammond,  29  Beav. 

Wall.)  329  (1874) :  bk.  22  L.  ed.  786.  91  (1860) ;  Ireson  v.  Denn,  2  Cox 

«  Frost  V.  Frost,  3  Sandf.  Ch.  (N.  425  (1796) ;  Palk  v.  Clinton,  12  Yes 

Y.)  188  (1846).  48,  59  (1806).  . 

*  Wiley  V.   Pinson,  23  Tex.   480 


142  sheriff's  execution  sale.  [i  123. 

foreclosure.  In  New  York  the  law  was  settled  in  Bertles  v. 
Nunan,'  that  under  a  conveyance  to  a  husband  and  wife 
jointly,  they  take  as  tenants  by  the  entirety,  and  upon 
the  death  of  either,  the  survivor  takes  the  whole  estate  ;  in 
such  a  case  it  would  not  be  necessary  to  bring  the  heirs 
of  the  deceased  joint  owner  into  the  action. 

§  123.  Mortgagor,  still  holding  any  kind  of  an  equi- 
table, contingent  or  latent  interest,  generally  necessary 
— Sheriff's  execution  sale. — It  may  be  generally  stated 
that,  as  long  as  the  mortgagor  continues  to  own  or  hold  any 
interest  of  an  equitable  nature  in  the  mortgaged  premises, 
he  is  a  necessary  defendant  to  a  foreclosure ;  for  the  entire 
equity  of  redemption  can  not  be  cut  off  or  foreclosed  as  long 
as  such  interest  is  outstanding  and  unaffected  by  the  action.'^ 
Such  interests  may  be  as  various  and  different  as  the 
cases  in  which  questions  affecting  them  arise.  It  is  only 
from  an  examination  of  numerous  special  cases  that  the 
proposition  of  this  section  is  advanced  as  a  general  rule. 

The  sale  of  a  mortgagor's  interest  under  an  execution  may 
do  away  with  the  necessity  of  making  the  mortgagor  a  party 
to  a  foreclosure,  after  the  delivery  of  the  sheriff's  deed 
and  the  expiration  of  the  time  limited  for  redemption,  as 
such  a  sheriff's  sale  passes  the  entire  equity  of  redemption 
remaining  in  the  mortgagor  to  the  purchaser  as  effectually 
as  a  deed  would.  But  during  the  period  of  redemption  the 
mortgagor  is  an  indispensable  party  for  the  purposes  stated 
in  this  chapter.'  It  has  been  said  by  Chancellor  Kent^  that 
"he  has  an  existing  right  of  which  he  could  not  be  divested 
within  the  year  by  the  sheriff's  sale,  and  could  only  be  in  the 
foreclosure  action  by  making  him  a  party." 

It  seems  that  a  purchaser  at  a  sheriff's  sale  under  an 
execution  is  also  a  necessary  party  from  the  time  of  his 


'  92  N.  T.  152  (1883),  per  Earl,  J„  Mims  v.  Mims,  35  Ala.   23  (1859). 

reviewing  Meeker  v.  Wright,  76  N.  See  post  §  162. 

Y.  262  (1879),  and  in  substance  over-  *  Hallock  v.  Smith,  4  Johns.  Ch. 

ruling  it.  (N,  Y.)  649  (1820).     The  quotation 

'  Morgan  v.  MagoflBn,  2  Bibb  (Ky.)  is  modified  from  the  original  to  read 

395  (1811).  with  the  text. 

«  N.  Y.  Code  Civ.  Proc.  §  1440  ; 


§  123.]  PURCHASER    ON   EXECUTION    SALE.  143 

purchase.*  But  where  the  execution  sale  is  held  pending  a 
foreclosure,  the  plaintiff  is  not  bound  to  bring  the  purchaser 
into  the  action  by  a  supplemental  bill ;  the  purchaser  must 
intervene  on  his  own  application  if  he  wishes  to  be  heard.* 

It  has  been  held  that  "  a  sale  by  a  sheriff  gives  the 
purchaser,  under  the  certificate,  an  inchoate  right  to  the 
land,  if  not  an  interest  in  the  land  itself;  and  it  is  such 
a  right  as  will  ripen  into  a  title,  unless  the  property  be 
redeemed  from  him.  In  this  case  the  sale  and  purchase  were 
anterior  to  the  filing  of  the  bill  of  foreclosure,  and  though 
the  purchaser  did  not  obtain  a  deed  from  the  sheriff  until 
after  the  bill  in  this  case  and  a  notice  of  lis  pendens  were 
filed,  yet  he  is  considered  something  more  than  a  purchaser 
pendente  lite.  He  was  a  purchaser  before,  though  his  title 
did  not  become  consummated  until  afterward ;  and  by 
his  purchase  he  acquired  such  a  right  and  interest  in  the 
land  as  entitled  him  to  be  made  a  party  to  the  foreclosure 
suit, — and  not  having  been  made  a  party,  he  is  not  foreclosed 
of  his  equity  of  redemption.  The  purchaser  at  the  fore- 
closure sale  does  not  get  an  absolute  title,  as  against  the 
purchaser  at  the  execution  sale.'"  At  the  time  of  this 
decision,  too,  there  was  no  law  requiring  a  sheriff's  certificate 
to  be  recorded  in  the  county  clerk's  office,  and  the  plaintiff 
could  have  no  notice  of  such  certificate,  as  he  now  can, 
without  examining  the  books  in  the  sheriff's  office. 

From  these  two  cases,  which  are  unquestioned  as  good  law 
it  appears  that  both  the  owner  of  the  equity  of  redemption 
and  the  purchaser*  at  an  execution  sale  are  absolutely 
necessary  parties  during  the  period  of  redemption  following 


» N.  T.   Code  Civ.  Proc.  §§  1440,  Love,    27   Mich.    308    (1873).     See 

1441,  1448 ;  Smitli  v.  Moore,  73  Ind.  Smitli    v.    Moore,    73     Ind.     388 

888  (1881) ;  Byington  v.  Walsh,  11  (1881). 

Iowa,  27  (I860).     See  fost  §  126.  *  Seemingly    contra.    Woods    v. 

»  Bennett  v.  Calhoun  Association,  Love,  27  Mich.  308  (1873),  holding 

9  Rich.  (S.  C.)  Eq.  163  (1857).     See  that  the  purchaser  at  an  execution 

poit  §  130,  on  purchasers  pendente  sale  is  not  a  necessary  defendant, 

lite.  even  though  he  may  have  filed  his 

»  Lisurance  Co.  v.  Bailey,  3  Edw.  sheriff's  certificate  in  the  register's 

Ch.  (N.  Y.)  416  (1840) ;  strongly  in  oflSce. 
point   to    the  contrary.   Woods  v. 


l-il  PARTIES    TO   A   LAjS^D    CO^STEACT.  [§124. 

an  execution  sale,  and  one  or  the  other  of  them  will 
continue  necessary,  according  as  the  property  is  redeemed 
or  not.' 

§  124.  Vendor  and  vendee  under  land  contract  neces- 
sary.— The  mortgagor  or  owner  of  the  equity  of  redemption 
also  continues  a  necessary  party,  even  though  he  may  have 
entered  into  a  land  contract  or  an  agreement  in  any  form  to 
convey  the  property.  In  such  a  case  a  mortgagor  holds  the 
equitable  relation  of  mortgagee  to  the  party  agreeing  to 
purchase,  and  can  foreclose  his  land  contract.  He  certainly 
has  such  an  equitable  interest  in  the  property,  that  the  title 
produced  by  foreclosure  would  not  be  perfect  if  he  were 
omitted  as  a  party  defendant  in  the  action.'  It  is  believed 
that  the  person  agreeing  to  purchase  under  a  land  contract 
is  also  a  necessary  defendant,'  although  Crooke  v.  O'Higgins* 
would  seem  to  indicate  that  the  omission  to  make  him  a 
party  would  not  prevent  the  rendition  of  a  valid  judgment 
of  foreclosure. 

A  curious  case  is  reported  in  Weed  v.  Stevenson,*  where  it 
appeared  that  an  absolute  deed  was  executed  to  a  grantee 
who  executed  a  defeasance  to  a  person  other  than  the  grantor, 
and  both  were  recorded  as  a  mortgage ;  in  an  action  to 
foreclose,  the  grantor  was  omitted  as  a  party.  Objection 
was  raised  by  demurrer  that  he  was  a  necessary  defendant. 
The  court  ruled  that  the  grantor  was  a  proper,  though  not 
a  necessary,  party ;  that  he  might  safely  have  been  omitted, 
but  that  if  the  plaintiff  had  any  doubt  about  the  validity  of 


'  For  redeeming  creditors,  see  N.  *  14  How.  (N.  Y.)  Pr.  154  (1857) ; 

Y.   Code  Civ.  Proc.   §§  1447.   1449,  Greitlier  v.    Alexander,    15    Iowa, 

1451,  1453,  1453  e^  se?.  470  (1863).     In  Blair  v.   Marsh,   8 

'  Crooke  v.  O'Higgins,  14  How.  Iowa,   144  (1859),   the  owner  of  a 

(N.  Y.)  Pr.  154  (1857).     In  Roddy  v.  land  contract,  holding  it  as  a  "title 

Elam,  12,  13  Rich.  (S.  C.)  L.  &  Eq.  bond,"  assigned  it  as  a   collateral 

343  (1866),  the  plaintiff  was  allowed  security  ;  on  foreclosure,  both  the 

to  amend  his  bill  so  as  to  bring  in  the  assignor  and  the  assignee  were  made 

original  vendor.  parties. 

» The  Equitable  Life  Ass.  Soc.  v.  •  Clarke  Ch.  (N.  Y.)  166  (1840) ; 

Bostwick,  22  N.  Y.  Wk.  Dig.  360  Griswold  v.  Fowler,  6  Abb.  (N.  Y.) 

(1885);   Martin  v.  Morris,   62  "Wis.  Pr.  113  (1857). 
413  (1885;. 


§§125-126.]  EQUITABLE    OWlfEES.  145 

his  conveyance,  he  had  a  perfect  right  to  make  the  grantor  a 
defendant  to  set  such  doubt  at  rest. 

§  125.  Parties  to  deeds  for  security,  in  escrow  or  in 
fraud,  necessary. — The  mortgagor  may  also  retain  an  equit- 
able interest  in  the  premises,  and  thereby  remain  a  necessary 
party,  where  he  has  made  a  conveyance,  absolute  on  its  face, 
but  intended  only  as  a  collateral  security ;  or  where  he  has 
delivered  a  deed  in  escrow  ;  or  where  the  deed  has  been 
executed,  but  remains  unrecorded  for  secret  purposes,  and 
the  plaintiff  has  no  knowledge  or  suspicion  of  the  same  ;'  or 
where  the  mortgagor  conveys  his  equity  of  redemption  in 
fraud  of  creditors,  and  his  conveyance  is  attacked  or  threat- 
ened. It  is  thus  seen  that  the  instances  in  which  the 
mortgagor  may  still  hold  an  equitable  interest  in  the  title, 
after  he  has  apparently  parted  with  his  entire  ownership,  are 
innumerable  and  extremely  various  in  character. 

§  126.  Purchaser  and  owner  of  the  equity  of  re- 
demption, by  grant  or  otherwise  from  the  mortgagor, 
necessary. — An  owner  or  holder  of  the  equity  of  redemp- 
tion by  purchase  from  the  mortgagor  or  a  mesne  purchaser, 
is  as  necessary  a  defendant  to  a  foreclosure  as  a  mortga- 
gor still  owning  the    mortgaged    premises."     So,  also,  is  a 


'Many  of  these  difficulties  may  s.  c.  23Barb.  (N.Y.)88;  Burnham  v. 

now  be  obviated  by  filing  the  statu-  DeBevorse,  8  How.  (N.  Y.)  Pr.  159 

tory  lis  pendens.     Kipp  v.   Brandt,  (1853) ;  Reed  v.    Marble,    10  Paige 

49  How.   (N.   Y.)  Pr.    358  (1875) ;  Ch.  (N.  Y.)  409  (1843) ;  Williamson 

Ostrom  V.  McCann,  21  How.  (N.  Y.)  v.  Field,  2  Sandf.   Ch.  (N.  Y.)  533 

Pr.   431   (18G0) ;  N.    Y.    Code  Civ,  (1845);  Watson  v.  Spence,  20  Wend. 

Proc.  §§1670,  1671.  See  post  %%1Q1,  (N.  Y.)  260  (1838).     In  Mickles  v. 

132  on  lis  pendens.     On  fraudulent  Dillaye,  15  Hun  (N.  Y.)  296  (1878), 

transfers,  see  Adams  v.  Bradley,  12  the  foreclosure  was    by    advertise- 

Mich.  346  (1864).  ment.     Merritt  v.  Phenix,   48  Ala. 

"  Raynor  v.  Selmes,  52  N.  Y.  579  87  (1872) ;  Hall  v.  Huggins,  19  Ala. 

(1873) ;  Miner  v.  Beekman,  50  N.  Y.  200  (1851) ;  Porter  v.  Muller,  65  Cal. 

337,  344  (1872) ;  Winslow  v.  Clark,  512  (1884) ;  Bludworth  v.  Lake,  33 

47  N.   Y.  261   (1872)  ;  Robinson  v.  Cal.  265  (1867) ;    Skinner  v.  Buck, 

Ryan,  25  N.  Y.  320  (1863) ;  St.  John  29  Cal.  253  (1865) ;  Horn  v.  Jones, 

v.  Bumpstead,  17  Barb.  (N.  Y.)  100  28   Cal.    194  (1865) ;    Carpentier  v. 

(1852)  ;    VauSlyke    v.    Shelden,    9  Williamson,    25    Cal.    154    (1S64) ; 

Barb.  (N.  Y.)  278  (1850)  ;   Hall  v.  Heyman    v.  Lowell,    23    Cal.    106 

Nelson,  14  How.  (N.Y.)Pr.  32  (1856);  (1863);   Boggs  v.  Fowler,   16  Cal. 

(10) 


146 


OWNER    OF   EQUITY    OF    REDEMPTION. 


[§  126. 


purchaser  of  a  divided'  or  of  an  undivided'  part  of  the 
mortgaged  premises  a  necessary  defendant ;  and  if  not  made 
a  party,  he  will  have  the  right  to  redeem  his  part  by  paying  a 
proportional  part  of  the  mortgage  debt.*  The  purchaser  of 
an  equity  of  redemption  from  an  assignee  in  bankruptcy  is  a 


659  (1860) ;  Goodenow  v.  Ewer,  16 
Cal.    461  (1860);     DeLeon  v.  Hig- 
uera,  15  Cal.  483  (1860) ;  Luning  v. 
Brady,  10  Cal.  265  (1858) ;  Coker  v. 
Smith,  63  Ga.  517(1881) ;  Jenesonv. 
Jeneson,  66  111.  260  (1872) ;  Ohling 
V.  Luitjens,  32  111.  23  (1863) ;   Dau- 
gherty  v.    Deardorf,    107  Ind.  527 
(1886),  citing  many  Indiana  cases  ; 
Petry  v.   Ambrosher,  100  Ind.  510 
(1884) ;  Searle  v.  Wliipperman,   79 
Ind.  424  (1881) ;  Mark  v.  Murphy, 
76  Ind.  534  (1881) ;  Lenox  v.  Reed, 
12  Kan.  223,  228  (1873) ;  Roney  v. 
Bell,  9  Dana  (Ky.)  4  (1839) ;  Cooper 
V.  Martin,  1  Dana  (Ky.)  25  (1833) ; 
Bailey  v.  Myrick,  36  Me.  50  (1853) ; 
Learned  v.  Foster,   117  Mass.   365 
(1875);    Roche  v.  Farnsworth,  106 
Mass.  509(1871);  Campbell  v.  Bemis, 
81  Mass.  (16  Gray)  485  (1860) ;  Put- 
nam V.  Putnam,  21  Mass.  (4  Pick.) 
139  (1826) ;    Thayer  v.    Smith,    17 
Mass.  429  (1821);  Nichols  v.  Ran- 
dall, 5  Minn.  304,  308  (1861) ;   Wolf 
V.  Banning,  3  Minn.  202,  204  (1859); 
Brundred  v.  Walker,  12  N.  J.  Eq. 
(1    Beas.)    140  (1858);    Durand    v. 
Isaacks,  4  McC.  (S.  C.)  L.  54  (1826) ; 
Rodgers  v.  Jones,  1  McC.  (S.  C.)Eq. 
221  (1826) ;  Meng  v.  Houser,  13  Rich. 
(S.  C.)  Eq.  210,  220  (1867) ;  Manufac- 
turing Co.  V.  Price,  4  S.  C.  338,  345 
(1873)  ;  Norton  v.  Lewis,  3  S.  C.  25 
(1871) ;  Morrow  v.  Morgan,  48  Tex. 
304  (1878) ;    Buchanan  v,   Monroe, 
22  Tex.  537  (1858) ;  Cord  v.  Hirsch, 
17  Wis.  403  (1863) ;  Green  v.  Dixon, 
9  Wis.  532(1859);  Hodgson  v.  Treat, 
7  Wis.  203  (1858) ;    Peto  v.   Ham- 
mond, 29  Beav.  91  (1860)  ;  Maule  v. 
Beaufort,  1  Russ.  349  (1826) ;  Brown 


V.  Stead,  5  Sim.  535(1833);  Fisher  on 
Mortgages,  §§  299,  305.  Contrary  to 
the  above  authorities,  see  Sumner  v. 
Coleman,  20  Ind.  486(1863);  Clinev. 
Inlow,  14  Ind.  419  (1860);  and  Semple 
V.  Lee,  13  Iowa,  304  (1862),  holding 
that  the  owner  of  the  equity  is  not  a 
necessary,  but  only  a  proper,  party  ; 
but  these  cases  have  been  overruled 
by  later  decisions  in  the  same  courts. 
A  fraudulent  grantee  was  held  a 
necessary  party  in  Adams  v.  Brad- 
ley, 12  Mich.  346  (1864).  The  mere 
nominal  holder  of  the  title,  who  has 
no  real  interest  therein,  is  a  neces- 
sary defendant,  McDonald  v.  Mc- 
Donald, 45  Mich.  44  (1880) ;  Merri- 
man  v.  Hyde,  9  Neb.  113  (1879). 
Likewise  the  real  owner  of  the 
property,  though  not  holding  the 
title,  is  a  proper  party  and  on  his 
application  to  become  a  defendant, 
must  be  brought  in  by  the  plaintiff, 
Johnston  v.  Donvan,  106  N.  Y.  269 
(1887) ;  8.  o.  13  N.  T.  Civ.  Proc 
Rep.  315, 

»  Spiller  V.  Spiller,  1  Hayw.  (N. 
C),  L.  483  (1797). 

*  Jefferson  v.  Coleman,  (Ind.)  9 
West.  Rep.  73  (1887).  See  Day  v. 
Patterson,  18  Ind.  114  (1862),  where 
there  were  a  number  of  purchasers 
and  aU  were  held  necessary  parties. 
See  also  Sumner  v.  Coleman,  20  Ind. 
486  (1863);  Bates  v.  Ruddick,  2 
Clarke  (Iowa),  423  (1856). 

•Bates  V.  Ruddick,  3  Clarke 
(Iowa),  423  (1856);  Curtis  v.  Gooding, 
99  Ind.  45  (1884) ;  Logan  v.  Smith, 
70  Ind.  598  (1880);  Williams  v. 
Beard,  1  S.  C.  L.  309  (1870). 


§  127.]  OMITTED    OWNER EFEECT.  147 

necessary  defendant,  instead  of  the  assignee  or  the  bankrupt.* 
In  the  foreclosure  of  a  mortgage  containing  a  power  of  sale, 
the  owner  of  the  equity  is  entitled  to  due  service  of  a  notice, 
and  a  bare  compliance  with  the  terms  of  the  power  is  not 
sufficient."  But  where  the  foreclosure  is  conducted  by  scire 
facias,  as  it  may  be  in  Illinios  and  in  some  other  states,  the 
mortgagor  or  his  personal  representatives  are  the  only 
necessary  parties;  the  purchaser  is  not  even  a  proper 
party.* 

In  some  states  the  courts  have  held  the  owner  of  the 
equity  a  proper,  but  not  a  necessary,  party ;  but  these  courts 
evidently  mean  that  the  owner  is  not  a  necessary  defendant 
for  the  maintenance  of  the  action,  as  they  are  agreed  that 
his  rights  will  remain  unaffected  unless  he  is  brought  into 
the  action.  Under  the  meaning  given  to  the  word  in  this 
chapter  they  are  indispensable  defendants,  and  the  decisions 
of  these  courts  in  fact  support  the  proposition  of  this 
section.* 

§  127.  Owner  of  mortgaged  premises  omitted  as 
defendant — Effect. — The  cases  are  uniform  in  holding  that 
a  purchaser  at  a  foreclosure  sale  acquires  no  title  whatever 
to  the  mortgaged  premises,  unless  the  owner  of  the  equity 
of  redemption  is  made  a  party,  although  the  mortgagor  and 
subsequent  incumbrancers  may  have  been  made  defendants. 


*  Felder  v.  Murphy,  2  Rich.  (S.  to  the  extent  that  he  was  unaffected 
C.)  Eq.  58  (1845).  by  the  decree  if  omitted,  and  might 

'  Drinan  v.  Nichols,   115    Mass.  redeem  ;  Georgia  cases  collated  and 

353  (1874).  reviewed.    See  Knowles  v.  Lawton, 

«  Chickering  v.  Failes,  26  Dl.  507  18  Ga.  476  (1855),  holding  the  pur- 

(1861).  chaser  unnecessary  where  the  mort- 

*  See  ante  §  115  ;  Sumner  v.  Cole-  gagor  was  made  a  party  ;  and  May 
man,  20  Ind.  486  (1863) ;  Cline  v.  v.  Rawson,  21  Ga.  461  (1857), 
Inlow,  14  Ind.  419  (1860);  Semple  holding  that  where  the  mortgagor 
V.  Lee,  13  Iowa,  304  (1802).  In  has  died,  it  is  sufficient  to  make  the 
Rose  V.  Swann,  56  111.  37  (1870),  the  purchaser  a  party.  See  Meyey's 
foreclosure  of  a  land  contract  was  Appeal,  4  Pa.  St.  80  (1846),  holding 
sought ;  subsequent  purchasers  of  a  purchaser  not  indispensable  under 
the  rights  of  the  vendee  were  held  the  acts  of  1705  and  1822,  but 
proper,  but  not  necessary,  parties.  unaffected  by  the  action  if  omitted, 
In  Williams  v.  Terrell,  54  Ga.  463  and  citing  the  earlier  Pennsylvania 
(1875),  an  owner  was  held  necessary  cases. 


148 


05IITTED    OWNER EFFECT. 


[§  127. 


Such  a  purchaser  remains  a  stranger  to  the  title  to  the  land, 
and  the  sale  operates  only  as  an  equitable  assignment  of  the 
mortgage  to  him.*  It  has  sometimes  been  intimated  that 
such  a  sale  is  void,"  but  the  current  of  authorities  agree  that 
it  is  binding  upon  the  parties  who  have  been  brought  into  the 
action.  No  suit  can  be  instituted  against  the  mortgagor  for 
the  payment  of  the  mortgage  debt  without  making  the 
grantee  of  the  equity  of  redemption  a  party  defendant.* 

The  owner  of  the  equity  of  redemption  is  not  affected  at  all 
by  a  decree  rendered  in  an  action  to  which  he  is  not  made  a 
party,  as  the  court  acquires  no  jurisdiction  of  him  ;*  the 
decree  is  a  nullity  as  to  him,  and  he  has  a  right  to  redeem, 
or  to  enforce  such  other  remedies  as  the  courts  of  the 
different  states  may  allow." 

The  principles  stated  in  this  and  the  preceding  section  are 
equally  true,  whether  the  owner  acquires  his  title  by  grant, 
or  through  a  sheriff's  sale  under  an  execution,  receiving  a 


'  Miner  v,  Beekman,  50  N.  Y. 
337,  344  (1872) ;  Winslow  v.  Clark, 
47  N.  Y.  261  (1872) ;  Robinson  v. 
Evan,  25  N.  Y.  320  (1862) ;  Kelgour 
v.'Wood,  64  111.  345  (1872);  Cutter  v. 
Jones,  52  111.  84  (1869);  Barrett 
V.  Blackmar,  47  Iowa,  565,  571 
(1877),  per  Day,  Cli.  J.  ;  Douglass  v. 
Bishop,  27  Iowa,  214,  216  (1869). 
In  point,  Curtis  v.  Gooding,  99  Ind. 
45  (1884) ;  Moore  v.  Cord,  14  Wis. 
213(1861). 

^  In  point,  Skinner  v.  Buck,  29 
Cal.  253  (1865).  See  Boggs  v. 
Fowler,  16  Cal.  559  (1860),  holding 
that  such  a  sale  is  void,  and  that  no 
title  passes  ;  Nat.  Fire  Ins.  Co.  v. 
McKay,  1  Sheld.  (N.  Y.)  138  (1867). 
fc^ee  Reed  v.  Marble,  10  Paige  Ch. 
(N.  Y.)  409,  414  (1843)  ;  Watson  v. 
Spence,  20  Wend.  (N.  Y.)  260 
(1838).  In  Micklcs  v.  Dillaye,  15 
Ilun  (N.  Y.)  296  (1878),  it  is  queried 
whether  a  foreclosure  by  advertis- 
ment,  in  which  no  notice  is  served 
on    the    owner    of    the    equity    of 


redemption,  is  not  a  mere  nullity  as 
to  all  parties  to  the  proceeding. 

*  ReeJ  V.  Marble,  10  Paige  Ch. 
(N.  Y.)  409,  414  (1843). 

*  Kelgour  v.  Wood,  64  111.  345 
(1872) ;  Cutter  v.  Jones,  52  111.  84 
(1869) ;  Dunlap  v.  Wilson,  32  Dl. 
517  (1863) ;  Hurd  v.  Case,  32  111.  45 
(1863) ;  Ohling  v.  Luitjens,  32  HI. 
23  (1863) ;  Chickering  v.  Failes.  26 
111.  517  (1861) ;  Bradley  v.  Snyder, 
14  111.  263  (1853) ;  Porter  v.  Kilgore, 
32  Iowa,  380  (1871) ;  Street  v.  Beal, 
16  Iowa,  68  (1864);  Veach  v.  Schaup, 
3  Clarke  (Iowa),  194  (1856);  Childs  v. 
Childs,  10  Ohio  St.  339  (1859).  In 
point.  Miner  v.  Beekman,  50  N.  Y. 
337  (1872).  For  other  New  York 
cases  see  the  first  note  to  §136 
ante. 

*  Barrett  v.  Blackmar,  47  Iowa, 
565,  571  (1877),  opinion  per  Day, 
Ch.  J. ;  Douglass  v.  Bishop,  27  Iowa, 
214,  216  (1869).  See  the  cases  in 
the  preceding  note. 


§  127.] 


OWlfEK   OF   KAUKM-ENT, 


149 


deed  in  due  time,'  or  from  an  assignee  in  bankruptcy,*  or  by 
descent  or  devise/  or  otherwise,*  or  is  a  mere  occupant 
under  a  land  contract  to  purchase.* 

The  purchaser  of  an  easement  from  a  mortgagor  is  also  a 
necessary  defendant ;  and  if  he  is  omitted,  he  may  continue 
to  use  and  enjoy  his  easement  without  interruption,  as  the 
action  does  not  extinguish  or  affect  his  rights.*  The  rule 
of  this  section  remains  the  same,  whether  the  foreclosure  be 
conducted  as  an  action  or  by  advertisement ;  the  notice 
required  in  foreclosures  by  advertisement  must  be  served  on 
the  owner  of  the  equity  of  redemption.''  If  the  owner  has 
not  recorded  his  deed,  and  the  mortgagee  receives  no  notice 
of  his  ownership,,  the  foreclosure  may  safely  proceed  without 
making  the  owner  a  party,  providing  a  lis  pc?idens  is  properly 
filed.*     It  will  be  readily  seen  that  the  principles  of  law 


»  Coster  V.  Clark,  3  Edw.  Ch.  (N. 
Y.)  440  (1840) ;  New  York  Life  Ins, 
&  Trust  Co.  V.  Bailey,  3  Edw.  Ch. 
(N.  Y.)  416  (1840);  Hallock  v. 
Smith,  4  Johns.  Ch.  (N.  Y.)  649 
(1820) ;  Kepley  v.  Jansen,  107  lU. 
79  (188B) ;  Smith  v.  Moore,  73  Ind. 
388(1881);  Brooks  v.  Keister,  45 
Iowa,  303  (1876) ;  Buck  v.  Sanders, 
1  Dana  (Ky.)  189  (1833);  Bollin- 
ger V.  Chateau,  20  Mo.  89  (1854); 
Hemphill  v.  Eoss,  66  N.  C.  477 
(1872);  Thorpe  v.  Ricks,  1  Dev.  &B. 
(N.  C.)  Eq.  619  (1837)  ;  Davis  v. 
Evans,  5  Ired.  (N.  C.)  L.  525  (1845). 

«  Winslow  V.  Clark,  47  N.  Y.  261 
(1872) ;  Burnham  v.  DeBevorse,  8 
How.  (N.  Y.)  Pr.  159  (1853). 

*  See  post  §§  141-143,  on  heirs  and 
devisees.  The  purchaser  of  a  devisee 
is  a  necessary  defendant.  Ohliug 
v.  Luitjens,  32  111.  23  (1863). 

*  In  Hall  v,  Huggins,  19  Ala.  200 
(1851),  the  owner  purchased  the 
equity  at  a  sale  held  pursuant  to  an 
order  of  the  Orphans'  Court.  Where 
a  mortgage  is  foreclosed  pending 
proceedings  to  condemn  lands  for 
public  uses,  the  parties  prosecuting 


the  proceeding  should  be  made 
defendants ;  Colehour  v.  State  Sav- 
ings Institution,  90  111.  152  (1878). 

»  Martin  v.  Morris,  62  Wis.  418 
(1885). 

*  In  Packer  v.  Rochester  &  S.  R. 
R.  Co.,  17  N.  Y.  283,  297  (1858),  the 
easement  granted  was  to  certain  mill- 
owners  to  construct  and  maintain  a 
race;  the  mortgagee  foreclosing 
omitted  them  as  defendants.  Pratt, 
J.,  said  :  "The  mortgage,  therefore, 
stands  unforeclosed  as  to  the  rights 
of  the  mill  owners."  See  also  the 
opinion  per  Denio,  J.,  p.  287. 

■I  Stanton  v.  Kline,  11  N.  Y.  199 
(1854),  reversing  16  Barb.  (N.  Y.)  9; 
St.  John  V.  Bumpstead,  17  Barb.  (N. 
Y.)  100  (1852);  VanSlyke  v.  Shelden, 
9  Barb.  (N.  Y.)  278  (1850).  See, 
especially,  Mickles  v.  Dillaye,  15 
Hun  (K  Y.)  296  (1878) ;  N.  Y.  Code 
Civ.  Proc.  §  2389. 

8  Kipp  V.  Brandt,  49  How.  (N.  Y.) 
Pr.  358  (1875) ;  Ostrom  v.  McCann, 
21  How.  (N.  Y.)  Pr.  431  (1860).  See 
post  §132 ;  N.  Y.  Code  Civ.  Proc. 
§  1670  ;  Aldrich  v.  Stephens,  49  Cal. 
676  (1875);  Daniels  v.   Henderson, 


150  OMITTED    OWNEK REMEDIES.  [§128. 

Stated  in  this  section  are  based  upon  the  broader  and  more 
general  principle  already  noticed, — that  no  person  having  an 
interest  in  the  mortgaged  premises  will  be  affected  by  the 
decree  of  foreclosure,  unless  he  is  made  a  party  to  the  action 
and  is  brought  within  the  jurisdiction  of  the  court/ 

§  128.  Remedies  of  omitted  owner  of  mortgaged 
premises. — If  the  owner  of  the  equity  of  redemption  is 
omitted  as  a  defendant,  the  mortgagor  or  any  other  party 
interested  in  the  action  may  object  to  it  by  demurrer,  if  the 
defect  appears  upon  the  face  of  the  complaint,  or  by  answer, 
if  the  defect  does  not  so  appear;*  if  objection  is  not  taken, 
the  defect  will  be  deemed  waived.*  If  the  owner  is  omitted, 
it  is  not  necessary  for  him  to  maintain  an  Action  to  redeem 
in  order  to  assert  his  rights,  for  he  is  already  the  owner 
of  the  title,  never  having  been  divested  of  it ;  and  the 
purchaser  at  the  sale,  having  acquired  no  title,  is  a  stranger 
to  the  premises,  and  can  be  ejected  or  proceeded  against  for 
trespass.*  The  owner  may,  however,  maintain  an  action 
to  redeem  if  he  desires ;  indeed,  this  is  the  usual  practice,  as 
it  brings  the  question    of   title  directly  in  issue.'     If  the 


49  Cal.  245  (1874) .     See  also  Tucker  32  111.  517  (1863) ;  Taylor  v.  Collins,  51 

V.   Leland,   75  N.   Y.   186   (1878) ;  Wis.  123  (1881) ;  Baker  v.  Hawkins, 

Houghton  V.  Kneeland,  7  Wis.  244  29  Wis.  576  (1872) ;  Cord  v.  Hirsch, 

(1858) ;  contra.  Hall  v.  Nelson,   14  17  Wis.  403  (1863).    See  Williams  v. 

How.  (N.  y.-)  Pr.  33  (1856) ;  s.  c.  23  Meeker,  29  Iowa,  292  (1870). 

Barb.  (N.  Y.)  88.     See  Carpentier  v.  ^  Davis  v.  Bechstein,  69  N.  Y.  440 

Williamson,  25  Cal.  154  (1864).     In  (1877). 

Webb  V.  Maxan,  11  Tex.  678,  684  *  VanSlyke   v.  Shelden,   9  Barb. 

(1854),  the  court  held  that,  if  the  (N.    Y.)    278    (1850);    Watson    v. 

mortgagee   foreclosing  received  no  Spence,  20  Wend.  ("N.  Y.)  260  (1838). 

notice  of  the  subsequent  purchaser's  In   Kelgour  v.   Wood,   64  111.   345 

deed,  the  decree  would  be  conclusive  (1872),  it  was  held  that  ejectment 

against  the  purchaser  ;  aliter,  if  he  could  not  be  maintained.   See  Cutter 

had  notice.  v.  Jones,  52  111.  84  (1869);  also  Fogal 

'Seean<<j§§115,  116.  v.   Pirro,   10  Bosw.    (N.  Y. )    100 

« Bard  v.   Poole.    12  N.   Y.   508  (1862). 

(1855) ;  Hall  v.  Nelson,  23  Barb.  (N.  "  See  Miner  v.  Beekman,  50  N.  Y. 

Y.)  88  (1856) ;  Reed  v.  Marble.  10  337,  344  (1872),  holding  also  that  the 

Paige  Ch.  (N.  Y.)  409  (1843)  ;  Kittle  action  must  be  brought  within  ten 

V.  VanDyck,  1   Saudf.  Ch.  (N.  Y.)  years.     Grandin  v.    Hernandez,   29 

76  (1843)  ;  Erickson  v.  Ptafferty,  79  llun  (N.  Y.)  399,  403  (1883)  ;  Carll  v. 

111.  210  (1875);  Dunlap   v.  Wilson,  Butman,  7  Me.  (7  Greenl.)  102  (1830)j 


§§  129-130.]       MESNE   OWNERS — PAETLES.  151 

owner  of  the  equity  has  assumed  the  payment  of  the  mort- 
gage, there  is  a  double  reason  for  making  him  a  party,  as  he 
has  thereby  become  the  principal  debtor,  and  the  mortgagor 
only  a  surety ;  and  if  a  judgment  of  deficiency  is  desired,  it 
must  be  obtained  first  against  such  owner.* 

§  129.  Mesne  owners  of  the  equity  of  redemption,  no 
longer  owners,  generally  not  necessary. — For  the  reasons 
stated  in  a  preceding  section,  parties  who  have  once  owned 
the  equity  of  redemption  in  mortgaged  premises,  and  again 
parted  with  the  same  by  an  absolute  conveyance,  are  not 
necessary  defendants  to  a  foreclosure  for  the  purpose  of 
perfecting  the  title."  As  they  have  no  interest  in  the  mort- 
gaged property,  they  can  have  no  interest  in  an  action 
affecting  it.  It  is  only  when  latent  equities,  fraud  or  defects 
in  the  deeds  may  invalidate  the  mesne  conveyances  of  inter- 
mediate  purchasers,  or  when  some  of  their  deeds  remain 
unrecorded,  that  they  and  their  grantors  become  necessary 
parties.  If  they  and  all  their  grantors,  subsequent  to  the 
delivery  of  the  mortgage,  have  assumed  the  payment  of 
the  mortgage  debt,  they  may  properly  be  defendants  if  a 
personal  judgment  for  deficiency  is  sought  against  them,  or 
any  of  them.'  The  interesting  question  of  personal  liability 
for  the  payment  of  the  mortgage  debt  when  it  has  been 
assumed  by  a  grantee  in  his  deed  of  conveyance,  will  be  fully 
considered  in  a  subsequent  chapter.* 

§  130.  Purchaser  pendente  lite  not  necessary.— The 
general  principle  is  now  recognized  by  all  the  courts  of  this 


Green  V.  Dixon,  9  Wis.  532(1859).   A  Haley  v.  Bennett,  5  Port.  (Ala.)  452 

person  who  succeeds  to  the  owner's  (1837) ;  Scarry  v.  Eldridge,  63Ind.  44 

interest  may  also  redeem  ;  Porter  v.  (1878) ;  Barton  v.  Kingsbury,  43  Vt. 

Kilgore,  32  Iowa,  380  (1871) ;  Veach  640  (1871) ;  Soule  v.  Albee,  31  Vt. 

V.   Schaup,    3    Clarke    (Iowa),    194  142(1858).     See  Vrooman  v.  Turner, 

(1856).     See  the  cases  cited  in  notes  69  N.  Y.  280  (1877).    See  ante  §  118! 

to  §  127  ante.  ^  Vrooman  v.  Turner,  69  N.  Y.  280 

>  See  post  chap.  xi.  (1877) ;  Scarry  v.  Eldridge,   63  Ind. 

« Lockwood  V.  Benedict,  3  Edw.  44  (1878).     See  Lockwood  v.  Bene- 

Ch.  (N   Y.)  472  (1841).     In  point,  diet,  3  Edw.  Ch.  (N.  Y.)  472  (1841). 

Merritt  v.Phenix,  48  Ala.  87  (1872) ;  *  See  post  chap.  xi. 
Lewis  V.  Elrod,  38  Ala.   17  (1861) ; 


152 


PUKCHASEE    PENDENTE    LITE. 


[§  130. 


country  and  of  England,  that  a  purchaser,  assignee  or  attach- 
ing creditor  of  mortgaged  premises,  during  the  pendency  of 
a  suit  to  foreclose,  is  bound  by  the  decree  made  against  the 
party  to  the  action  from  or  through  whom  he  derives  title  ;' 
it  is  not  necessary  to  bring  a  party,  so  acquiring  title,  before 
the  court.  The  reasons  for  this  rule  will  be  found  in  the  two 
succeeding  sections.  Such  a  purchaser  acquires,  of  course, 
only  the  rights  of  title  or  incumbrance  which  the  person 
from  whom  he  purchased  held  at  the  time  of  the  transfer. 

The  early  decisions  upon  the  proposition  of  this  section 
endeavored  to  make  a  clear  distinction  between  voluntary 
transfers  and  those  accomplished  by  operation  of  law."  It 
has  been  said  by  one  of  our  ablest  judges,"  that  there  are 
English  and  American  cases  holding  that  when  the  interest 
of  a  party  to  the  action  is  cast  upon  the  transferee  by 
operation  of  law,   and  not  by  the  act  of   such  party,  the 


'  Fuller  V.  Scribner,  76  N,  Y.  190 
(1879) ;  Lamontv.  Cheshire,  65N.Y. 
30  (1875)  ;  Lenihan  v.  Hamann,  55 
N.  Y,  653  (1873);  Cleveland  v. 
Boerum,  28  Barb.  (N.  Y.)  201  (1856); 
s.  c.  3  Abb.  (N.  Y.)  Pr.  294 ;  and  on 
appeal  from  the  judgment  at  special 
term,  27  Barb.  (N.  Y.)  252  (1858), 
afE'd  24  N.  Y.  613  (1862) ;  Zeiter  v. 
Bowman,  6  Barb.  (N.  Y.)  133  (1849); 
Watt  V.  Watt,  2  Barb.  Ch.  (N.  Y.) 
371  (1847);  Ostrom  v.  McCann,  21 
How.  (N.  Y.)  Pr.  431  (1860) ;  Kind- 
berg  V.  Freeman,  39  Hun  (N.  Y.) 
466  (1886)  ;  Weeks  v.  Tomes,  16 
Hun  (N.  Y.)  349  (1«78) ;  The  People's 
Bank  V.  Hamilton  Co.,  10 Paige  Ch. 
(N.  Y.)  481,  490  (1843) ;  Curtis  v. 
Hitchcock,  10  Paige  Ch.  (N.  Y.)  399 
(1843) ;  Jackson  v.  Losee,  4  Sandf. 
Ch.  (N.  Y.)  381  (1846)  ;  N.  Y.  Code 
Civ.  Proc  ^  1671 ;  Horn  v.  Jones,  28 
Cal.  194(1865);  Taylor  v.  Adam,  115 
111.  570;  8.  c.  2  West.  Rep.  827(1886); 
Chickering  v.  Fullerton,  90  111.  520 
(1878);  Addison  v.  Crow,  5  Dana 
(Ky.)  279  (1837) ;  Osborne  v.  Crump, 


57  Miss.  622  (1880).  See  Loomis  v. 
Riley,  24  111.  307  (1860),  where  a 
tenant  in  common  of  an  undivided 
half  of  certain  lands  mortgaged  his 
half  during  the  pendency  of  a  par- 
tition suit ;  Rogers  v.  Holyoke,  14 
Minn.  220  (1869).  In  Chapman  v. 
West,  17  iSr.  Y.  125  (1858),  the  action 
was  for  the  specific  performance  of 
a  land  contract.  See  Fisher  on 
Mortgages,  §§  380-388,  and  the  Eng- 
lish cases  cited. 

*  Cleveland  v.  Boerum,  23  Barb. 
(N.  Y.)  205  (1856).  See  the  same 
case  athrmed  on  appeal  in  24  N.  Y. 
613  (1862). 

^  Cleveland  v.  Boerum,  24  N.  Y. 
617  (1862),  per  Wright,  J.,  a  leading 
case  ;  Lenihan  v.  Hamann,  55  N.  Y. 
652  (1873)  ;  Sedgwick  v.  Cleveland, 
7  Paige  Ch.  (N.  Y.)  290,  291  (1838). 
See  Smith  v.  Sanger,  3  Barb.  (N. 
Y.)  360  (1848);  Anon  v.  Anon, 
10  Paige  Ch.  (N.  Y.)  20  (1842).  The 
last  two  cases  seem  to  be  overruled 
by  Cleveland  v.  Boerum,  24  N.  Y. 
613  (1862). 


§  131.]  LIS   PENDENS.  153 

foreclosure  will  be  defective,  unless  the  transferee  is  brought 
before  the  court ;  but  he  intimates  that  these  cases  are  not 
to  be  relied  upon,  though  he  refers  to  the  case  of  Sedgwick 
V.  Cleveland'  as  an  illustration. 

The  statutes  in  most  states  now  provide  for  filing  a  notice 
of  pendency  of  action,  settling  this  question  in  accordance 
with  the  general  principle  above  stated  ;  and  it  matters  not 
whether  the  transferee  acquires  his  title  by  the  voluntary 
act  of  the  transferrer,  or  by  operation  of  law.  Though  the 
plaintiff  is  not  bound  to  amend  his  complaint,  so  as  to  bring 
in  a  purchaser  or  an  incumbrancer  pendente  lite^  he  may  do 
so  if  he  chooses  ;  the  purchaser  can  appear  and  defend  in 
the  name  of  the  party  from  whom  he  acquired  his  interest,' 
or  he  can  be  made  a  party  on  his  own  application'  by  sub- 
stitution, or  subrogation.* 

§  131.     Common-law    doctrine    of  lis    pendens. — The 

doctrine  of  lis  pendens  and  the  statutes  enacted  in  the 
several  states  to  regulate  the  same,  are  of  the  greatest 
importance  to  the  plaintiff  in  determining  who  are  necessary 
defendants  to  a  foreclosure,  and  of  equal  importance  to 
other  parties  having  an  interest  in  the  equity  of  redemption. 
Lord  Bacon  has  stated  the  common-law  rule  to  be  that  "  no 
decree  bindeth  any  that  cometh  in  bona  Jide  by  conveyance 
of  the  defendant  before  the  bill  exhibiteth,  and  is  made  no 
party,  neither  by  bill  or  order ;  but  when  he  comes  in  pendente 
lite,  and  while  the  suit  is  in  full  prosecution,  and  without 
any  order  of  allowance  or  privity  by  the  court,  then  regularly 
the  decree  bindeth."*     The  rule  had  its  origin  in  the  civil 


'  7  Paige  Ch.  (N.  Y.)  291  (1838).  98  Pa.   St.  432  (1881) ;   Eyster  v. 

«  Cleveland  v.  Boerum,  24  N.  Y.  Gaff,  91  U.  S.  (1  Otto),  521  (1875) ; 

620,  621  (1862) ;  The  People's  Bank  bk.  23  L.  ed.  403. 

V.   Hamilton    Co.,     10   Paige    Ch.  *  Seward  v.  Huntington,  94  N.  Y. 

(N.  Y.)  484  (1843) ;  Foster  v.  Deacon,  114  (1883). 

6  Madd.  Ch.  59  (1821) ;  Coles  v.  For-  «  Bacon's  Works,  vol.  4,  p.  515. 

rest,  10  Beav.  552  (1847) ;  Fisher  on  In  Bishop  of  Winchester  v.  Paine, 

Mortgages,  §  385.  11  Ves.    194,   201   (1805),    Sir  Wil- 

3  Cleveland  v.  Boerum,  24  N.  Y.  liam    Grant    said    that     "he    who 

613  (1862) ;  The  People's  Bank  v.  purchases  during  the  pendency  of 

Hamilton  Co.,  10  Paige  Ch.  (N.  Y.)  the  suit,  is  bound  by  the  decree  that 

484(1843);  Clow  v.  Derby  Coal  Co. ,  may  be  made    against  the    person 


154  LIS   PENDENS   IN   NEW   YOKK.  [§  132. 

law,  and  was  pungently  stated  in  the  legal  maxim,  peiidente 
lite,  nihil  imiovetur.  It  is  well  settled  that  a  judgment  in  an 
action  in  rem  binds  not  only  the  parties,  but  also  all  others 
claiming  or  deriving  title  under  them  by  a  txzxisi&x  pendente 
lite^  Indeed,  writers  deduce  from  the  cases  the  broad 
rule  that  decisions  in  rem  are  binding  and  conclusive,  not 
only  on  the  parties  actually  litigating  the  case  and  their 
privities,  but  also  on  all  other  persons,  if  the  suit  was  com- 
menced against  the  proper  parties,  and  judgment  was 
obtained  bona  fide  and  without  fraud." 

§  132.  New  York  statutory  provisions  for  lis  pendens ; 
other  states. — Many  of  the  states,  in  their  codes  or  general 
statutes,  have  enacted  the  common-law  rule  into  a  statutory 
requirement  and  prescribed  special  rules  of  practice  in  con- 
nection with  it.  New  York  first  did  this  in  1823,'  by  a 
special  statute,  which  was  re-enacted  in  the  Revised  Statutes,* 
and  subsequently  formed  into  §  132  of  the  old  Code,  and 
§§  1670  and  1671  of  the  Code  of  Civil  Procedure.  Prior  to 
185 1  the  notice  could  be  filed  only  at  the  time  of  commencing 
the  action ;  now  it  can  be  filed  with  the  complaint,  and  be- 
comes operative  at  once  before  the  summons  is  served  on  any 
of  the  defendants.  Prior  to  1858  a  grantee,  whose  deed  was 
not  recorded,  had  to  be  discovered  by  the  plaintiff  and  made 


from  whom  he  derives  the  title  ;  the  *  See  Cleveland  v.  Boerum,  24  N. 

litigating  parties  are  exempted  from  Y.  617  (1862).     The  learned  jurist, 

the  necessity  of  taking  any  notice  of  Theodore  W.  Dvright,  as  Commis- 

a  title  so  acquired  ;  as  to  them  it  is  sioner  of  Appeals,   in    Lament    v. 

as  if  no  such  title  existed,  otherwise  Cheshire,   65  N.   Y.   30,  36  (1875), 

suits  would     be    interminable,    or,  considered  at  length  the  history  and 

which  would  be  the  same  in  effect,  the  nature  of  a  notice  of  pendency, 

it  would  be  the  pleasure  of  one  party  of    action,    and   the    office    it    was 

at  what  period  the  suit  should  be  designed  to  fulfill.     See  Bellamy  v. 

determined.      The  rule  may  some-  Sabine,  1  De6.  &  J.  566  (1857),  a 

times  operate    with    hardship,    but  leading  English  case ;   also  Hunt  v. 

general  convenience  requires  it."  Hunt,    34    Mass.    (17   Pick.)    118 

»  Rogers  v.  Holyoke,  14  Minn.  220  (1835). 

(1869) ;   Hull  v.  Lyon.  27  Mo.   570  »  Laws  of  New  York,  1823,  chap. 

(1858) ;  McPherson  v.  Housel,  13  N.  182,  §  11. 

J.  Eq.  (2  Beas.)  299  (1861) ;  Young-  *  Revised  Statutes    vol.  2,  p.  174, 

mauv.  Elmira&W.R.  R.,65Pa.  St.  §43. 
278  (1870). 


§  132.]  EFFECT   OF   LIS   PENDEN'S.  155 

a  party  to  the  action,*  but  since,  and  at  present,  every  person 
receiving  or  recording*  his  conveyance  after  the  filing  of  such 
notice  with  the  complaint,  even  though  it  be  a  few  hours 
only,'  is  deemed  a  subsequent  purchaser  and  incumbrancer; 
he  stands  in  the  same  position  as  he  would  if  he  had  actually 
purchased  the  land,  or  received  his  incumbrance,  after  the 
filing  of  such  notice,  and  he  is  bound  by  such  proceedings  "  to 
the  same  extent  as  if  he  was  a  party  to  the  action,"* — that  is, 
he  is  barred  and  foreclosed  of  all  rights  in  the  premises. 

A  purchaser  or  lienor  may  be  brought  into  the  action 
by  a  supplemental  bill  if  desired.*  Prior  to  1862  the 
lis  pendens  was  inoperative  as  to  each  defendant,  until  the 
summons  had  been  served  upon  him,*  but  an  amendment 
of  that  year  (continued  in  the  present  Code  of  Civil  Proce- 
dure) made  the  notice  operative  from  the  time  of  filing  the 
complaint,  and  also  fixed  the  limit  of  sixty  days  within 
which  the  summons  must  be  served,  or  the  notice  would 
become  void/  Prior  incumbrancers  and  persons  whose  rights 
are  superior  to  those  of  the  plaintiff  are  not  affected  by  the 
notice."  So,  also,  a  person  who  claims  title  by  virtue  of  a 
tax  deed  is  not  bound  by  the  notice.* 


'  Hall  V.  Nelson,  14  How,  (N.  Y.)  and  died  ;  the  grantee  was  held  an 

Pr.  33(1856);  s.  c.  23  Barb.  (N.Y.)88.  unnecessary  party  on  reviving  the 

*  Ostrom  V.  McCann,  21  How.  (N.  action. 
Y.)  Pr.  431  (1860),  citing  §  182  of  *  N.  Y.  Code  Civ.  Proc.  §  1671. 

the  old  N.  Y.  Code  ;  Earle  v.  Barn-  »  Harrington  v.  Slade,   22  Barb, 

ard,  22  How.  (N.  Y.)  Pr.  437,  440  (N.  Y.)  161  (1856).     See  ante  §  130. 
(1862)  ;   Kipp  v.  Brandt.   49  How.  «  Tate  v.  Jordan,  3  Abb.  (N.  Y.) 

(N.  Y.)  Pr.  358  (1875),  strongly  in  Pr.  392(1856)  ;  Butler  v.  Tomlinson, 

point.     Supporting  these  cases,  see  38  Barb.  (N.  Y.)  641  (1862) ;  s.  C.  15 

Aldrich    v.  Stephens,    49  Cal.    676  Abb.  (N.  Y.)  Pr.  88  (1862) :  Muscott 

(1875),   and  Daniels  v.  Henderson,  v.  Woolworth,  14  How.  (N.  Y.)  I*r. 

49  Cal.  245  (1874),  477  (1857)  ;  Burroughs  v.  Reiger,  12 

8  Stern  v.   O'Connell,   35  N.    Y.  How.  (N.  Y.)  Pr.  172  (1856)  ;  Fuller 

104  (1866) ,  Ostrom  v.  McCann,  21  v.    Scribner,    16  Hun  (N.   Y.)  130 

How.  (N.  Y.)  Pr.   431  (1860).     See  (1878) ;  aff'd  76  N.  Y.  190  (1879). 
Weyh  V.  Boy  Ian,  62  How.  (K  Y.)  '  N.  Y.  Code  Civ.  Proc.  §  1670. 

Pr.  397  (1882)    aff'd  63  How.  (N.  Y.)  In  point.  Weeks  v.  Tomes,  16  Hun 

Pr.  73  (1882),  where,  after  the  com-  (N.  Y.)  349  (1878) ;  aff'd  76  N.  Y. 

mencement  of  the  action  and  the  601  (1879). 

filing  of  a  lis  pendens,  the  mortgagor  «  Chapman  v.  West,  Impl'd,  17  N. 

conveyed  his  squiiy  of  redemption  Y.  125  (1858) ;  Bank  v.  Connelly,  8 


156  O:\IITTED    LIS    PENDENS.  [§§  133-134. 

§  133.  Effect  on  parties  of  omitted  or  defective  lis 
pendens. — The  notice  of  lis  pendens  is  made  by  statute  con- 
structive notice  to  persons  wlio  are  not  parties  to  the  action, 
but  who  acquire  their  rights  from  or  under  those  who  have 
been  brought  within  the  jurisdiction  of  the  court.  As  their 
rights  alone  are  affected,  they  alone  can  take  advantage  of 
the  omission  to  file  the  notice,  or  of  any  defects  in  it.' 
Whenever  there  is  a  defect  in  filing  the  lis  pendens,  as  the 
neglect  to  file  the  complaint  with  it,  and  any  person  obtains 
an  interest  in  or  a  lien  upon  the  equity  of  redemption  from 
a  party  defendant  during  the  pendency  of  the  action  and 
the  continuance  of  the  defect,  he  will  not  be  bound  by  the 
decree  and  may  redeem  ;*  the  purchaser  at  a  sale  under 
the  decree  of  foreclosure  will  receive  a  defective  title, 
although  an  order  may  have  been  made  that  the  complaint 
be  filed  nunc  pro  tunc. 

§  134.  Mortgagor  a  married  woman,  having  a  separate 
estate,  necessary. — Where  a  married  woman  holds  the  fee 
title  of  property  in  her  own  name  as  a  separate  estate,  and 
mortgages  the  same,  or  where  she  becomes  the  owner  of  the 
equity  of  redemption  in  property  previously  mortgaged,  she 
is  a  necessary  party  to  a  foreclosure  for  the  purposes  stated 
in  this  chapter.*  A  married  woman  had  no  capacity  at 
common-law  to  make  contracts,  and  consequently  no  right 
to  execute  a  mortgage  on  her  separate  estate.     Statutes  in 


Abb.  (N.  Y.)  Pr.  128  (1858);  Stuy-  y.)Pr.  75(1849).     For  an  exhaustive 

vesant  v.  Hall,  2  Barb.  Ch.  (N,  Y.)  history    and    review    of   the   cases 

151  (1847) ;  Chapman  v.  Draper,  10  affecting  the  right  of  Kfema  covert  to 

How,  (N.  Y.)  Pr.  367(1854);  Stuy-  mortgage  her  real  estate,  see  the  lead- 

vesaut  V.  Hone,  1  Sandf.  Ch.  (N.  Y.)  ing  case  of  Albany  Fire  Ins.  Co.  v. 

419  (1844).  Bay,  4  N.  Y.  9,  38  (1850),  affirming 

»  Becker  v.  Howard,  4  Hun  (N.  4  Barb.  (N.  Y.)  407  (1848) ;  opinions 

Y.)  359  (1875) ;   aff'd  66  N.   Y.   5  by  Jewett,  Taylor  and  Pratt,  JJ.; 

(1876).  Ellis  V.  Kenyon,  25  Ind.  134  (1865) ; 

I  White  V.  Coulter,  1  Hun  (N.  Y.)  Eaton  v.  Nason,  47  Me.  133  (I860); 

857  (1874).  Galway  v.  Fullerton,  17  N.  J.  Eq. 

«  Dakin  v.  Insurance  Co.,  77  N.  (2  C.  E.  Gr.)  389  (1866) ;  Newhartv. 

Y.  601  (1879) ;  Weeks  v.  Tomes,  16  Peters,  80  N.  C,  166  (1879)  ;  McFer- 

Hun  (N.  Y.)  349  (1878).     In  point,  rin  v.   White,   6  Cold.  (Tenn.)  499 

Olson  V.  Paul,  56  Wis.  30  (1882).  (1869) ;  Hill  v.  Edmonds,  5  DeG.  & 

»  Conde  v.  Shepard.  4  How.  (N.  S.  603  (1852). 


§  135.]  MAEELED    WOMAN MOETGAGOE.  157 

England  and  in  America  have  greatly  enlarged  a  married 
woman's  rights  in  property,  so  that  she  can  now  make  valid 
contracts  affecting  her  real  estate ;  but  in  Massachusetts, 
New  Jersey  and  Pennsylvania  it  is  necessary,  even  at  the 
present  day,  for  the  husband  to  join  with  his  wife  in  the  execu- 
tion of  a  mortgage  upon  her  separate  estate  in  order  to 
make  the  mortgage  vaHd.*  It  is  in  New  York,'  especially, 
that  married  women's  rights  have  been  enlarged,  so  that 
at  present  the  law  applicable  to  the  subject-matter  of  this 
work,  with  reference  to  a  male  or  a  feme  sole^  is  equally 
applicable  with  reference  to  a  y<?»/^  c^z/fr^.  The  interesting 
question  of  a  married  woman's  liability  for  a  personal  judg- 
ment of  deficiency  will  be  fully  considered  hereafter.* 

§  135.  Wife  of  a  mortgagor  or  owner  of  the  equity  of 
redemption  necessary. — It  has  become  a  settled  rule  of  law 
in  all  states  where  the  common-law  doctrine  of  dower 
remains  unchanged,  and  in  many  states  where  statutes  have 
prescribed  a  wife's  rights  in  the  real  estate  of  her  husband, 
that  the  inchoate  right  of  dower  of  a  wife  in  the  lands  of 
her  husband  is  a  real  and  existing  interest,  and  as  much 
entitled  to  protection  as  the  vested  rights  of  a  widow ;  and 
that  neither  can  be  impaired  by  any  judicial  proceeding  to 
which  the  wife  or  widow  is  not  made  a  party.  As  such  rights 
constitute  an  interest  in  real  estate,  it  is  plain  that  a  wife  or 
widow  must  be  made  a  party  to  a  foreclosure  suit  where  she 
has  signed  the  mortgage,  released  her  rights  otherwise,  or 
acquired  those  rights  subsequent  to  the  execution  of  the 
mortgage.  The  right  of  a  wife  to  be  endowed  of  an  equity 
of  redemption  has  long  been  put  at  rest.  She  is  an  absolutely 
necessary  party  to  an  action  in  order  to  produce  such  a  title 
as  a  purchaser  at  the  sale  will  be  compelled  to  accept.*     But 


» "Weed    Sewing    Macli.    Co.    v.  (1870),  and  Glass  v.  Warnick,  40  Pa. 

fimerson,    115    Mass.    554    (1874) ;  St.  140  (1861). 

Merchant    v.   Thomson,  34   N.   J.  *  Laws  of  New  York,  1848,  chap. 

Eq.   (7  Stew.)  73  (1881),   and    the  200;  1849,  chap.  375;  1860,  chap.  90; 

cases  cited  ;  Armstrong  v.  Ross,  20  1862,  chap.  172  ;  1884,  chap.  381. 

N.  J.  Eq.  (5  C.  E.  Gr.)  109  (1869) ;  »  gge  poht  chap.  x. 

Black    V.    Galway,   24    Pa.    St.    18  *  Merchant's  Bank  v,   Thomson, 

(1854).     Conflicting  with  this  case,  55  N.    Y.    7  (1873) ;  Mills  v.  Van 

see  Graham  v.  Long,  65  Pa.  St.  383  Voorhies,    20    K    Y.    412   (1859) ; 


158 


WIFE   NECESSARY   DEFENDANT. 


[§i 


60. 


if  the  wife  has  been  omitted  as  a  party  defendant  and  dies 
during  the  pendency  of  the  foreclosure,  it  will  not  be  neces- 
sary to  bring  in  her  heirs  and  personal  representatives  in 
order  to  produce  a  perfect  title,  as  they  succeed  to  no 
interest.'  If  the  mortgagor  has  two  wives,  both  are  necessary 
defendants."  Though  a  wife  may  have  made  a  grant  of  her 
inchoate  right  of  dower,  she  remains  a  necessary  party ;  the 
grantee  acquires  no  interest  by  the  conveyance,  as  an 
inchoate  right  of  dower  is  inalienable.'  Wherever  the  right 
of  dower  has  been  abolished  by  statute,  the  wife  is  not  a 


Denton  v.  Nanny,  8  Barb.  (N.  Y.) 
618  (1850);  Wheeler  v.  Morris,  2 
liosw.  (N.  Y.)  524,  529  (1858) ;  Bell 
V.  The  Mayor,  10  Paige  Ch.  (N.  Y.) 
49,  67  (1843).  See  Kay  v.  Whittalier, 
44  N.  Y.  565,  572  (1871),  holding 
that  the  wife  is  not  an  indispensable 
defendant  to  sustain  the  action,  but 
that  her  rights  will  not  be  cut  off  by 
the  decree,  unless  she  is  made  a 
party  ;  Denton  v.  Nanny,  8  Barb. 
(N.  Y.)  618  (1850)  ;  Blydenburgh  v. 
Northrop,  13  How.  (N.  Y.)  Pr.  289 
(1856) ;  Hubbell  v.  Sibley,  5  Lans. 
(N.  Y.)  56  (1871);  Kittle  v.  Van 
Dyck,  1  Sandf.  Ch.  (N.  Y.)  76,  79 
(1843);  Mabury  v,  Ruiz,  58  Cal.  11 
(1881) ;  Daniels  v.  Henderson,  5 
Fla.  452  (1854) ;  Kissel  v.  Eaton,  64 
Ind.  248  (1878) ;  Watt  v.  Alvord,  25 
Ind.  533  (1865) ;  Verry  v.  Robinson, 
25  Ind.  14  (1865);  Richardson  v. 
Skolfield,  45  Me.  386  (1858) ;  Gage 
V.  Ward,  25  Me.  101  (1845) ;  Camp- 
bell V.  Knights,  24  Me.  332  (1844) ; 
Smith  V.  Eustis,  7  Me.  (7  Greenl.) 
41  (1830);  Lund  v.  Woods,  52 
Mass.  (11  Mete.)  566  (1840);  Swan 
V.  Wiswall,  32  Mass.  (15  Pick.)  126 
(1833) ;  Snyder  v.  Snyder.  6  Mich. 
470  (1850) ;  Atkinson  v.  Stewart, 
46  Mo.  510  (1870).  See  Rands  v. 
Kendall,  15  Ohio,  671,  675  (1846), 
where  the  law  of  dower  in  Ohio  is 
explained,  with  citations  from  cases 


and  statutes ;  Eldridge  v.  Eldridge, 
14  N.  J.  Eq.  (1  McCart.)  195(1862) ; 
Chiswell  V.  Morris,  14  N.  J.  Eq.  (1 
McCart.)  101  (1861);  Ketchum  v. 
Shaw,  28  Ohio  St.  503  (1876) ;  State 
Bank  of  Ohio  v.  Hinton,  21  Ohio 
St.  509  (1871);  McArthur  v.  Frank- 
lin, 15  Ohio  St.  485  (1864) ;  s.  c.  16 
Ohio  St.  193  (1865);  Conover  v. 
Porter,  14  Ohio  St.  450  (1863) ;  Tay- 
lor V.  Fowler,  18  Ohio,  567  (1849) ; 
Calmes  v.  McCrocker,  8  S.  C.  87 
(1876) ;  James  v.  Fields,  5  Heisk. 
(Tenn.)  394  (1871) ;  Gregg  v.  Jones, 
5  Heisk.  (Tenn.)  443  (1871).  But  see 
Verree  v.  Verree,  2  Brev.  (S.  C.)  L. 
211  (1807),  holding  that  in  1807  a 
wife  was  not  entitled  to  dower  in  an 
equity  of  redemption.  In  Newhall 
V.  Lynn  Bank,  101  Mass.  428  (1869), 
the  wife  of  a  husband  who  had 
made  an  assignment  in  bankruptcy 
was  held  a  necessary  party  ;  but  in 
Huston  V.  Neil,  41  Ind.  504  (1873). 
it  was  held  that  a  wife  had  no 
interest  in  the  partnership  real  estate 
of  her  husband,  and  accordingly 
was  not  a  necessary  party  to  the  fore- 
closure of  a  mortgage  on  the  same. 

»  Miller  v.  MUler,  48  Mich.  311 
(1882). 

«  Wood  V.  Chew,  13  How.  (N.  Y.) 
Pr.  86  (1850). 

» Earle  v.  Barnard,  23  How.  (N. 
Y.)  Pr.  437  (18G2). 


§  135.] 


WIFE — WHEN   NOT   NECESSAEY. 


159 


necessary  defendant,  as  she  has  no  interest  in  her  husband's 
lands.* 

If  the  wife  has  signed  the  mortgage,  she  is,  of  course, 
a  necessary  defendant.*  "  The  only  reason  why  the  wife  of 
a  mortgagor,  who  joins  in  the  execution  of  such  an  instru- 
ment, should  be  made  a  party,  is  to  bar  the  equity  of 
redemption  in  her  right  of  dower,  or  to  give  her  the 
opportunity,  before  it  is  foreclosed,  to  redeem  and  prevent 
its  sale.'"  If  the  mortgage  was  executed  by  the  husband 
before  marriage,  the  wife  is  as  necessary  a  defendant  as 
though  it  had  been  executed  by  both  after  marriage  and 
during  coverture  ;*  after  the  husband's  death  the  widow 
remains  a  necessary  party.* 


>  See  Ethiidge  v.  Vernoy,  71  N. 
C.  184  (1874).  See  also  Thornton  v. 
Pigg,  24  Mo.  249  (1857),  for  the 
statute  in  Missouri,  foreclosure  being 
held  a  statutory  action  at  law.  and 
not  an  equitable  action.  See  the 
preceding  section  for  other  cases. 
See  Pitts  v.  Aldrich,  93  Mass.  (11 
Allen),  39  (1865). 

2  Hinchliffe  v.  Shea,  34  Hun  (N. 
Y.)  365  (1884) ;  Leonard  v.  Adm'r 
of  Villars,  23  111.  377  (1860); 
Chambers  v.  Nicholson,  30  Ind.  349 
(1868) ;  Hinchman  v.  Stiles,  9  N.  J. 
Eq.  (1  Stockt.)  361  (1853) ;  Harts- 
home  V.  Hartshorne,  2  N.  J.  Eq. 
(1  H.  W.  Gr.)  349  (1840).  Upon 
the  general  question  of  a  wife's  right 
of  dower  in  mortgaged  premises,  see 
Campbell  v.  Campbell,  30  N.  J.  Eq. 
(3  Stew.)  415  (1879).  See  the  cases 
cited  in  the  first  note  to  this  section. 
Powell  V.  Ross,  4  Cal.  197  (1854) ; 
Gary  v.  Wheeler,  14  Wis.  281  (1861). 
See  also  Nimrock  v.  Scanlin,  87  N.  C. 
119  (1883).  In  Pitts  v.  Aldrich,  98 
Mass.  (11  Allen),  39  (1865),  the  wife 
was  held  not  a  necessary  party  where 
she  had  signed  the  mortgage.  Colt, 
J.,  writing  the  opinion  and  collating 
the  authorities,  says  that  the  law  of 


Massachusetts  on  this  point  differs 
from  that  of  all  the  other  states.  In 
Mims  V.  Mims,  1  Humph.  (Tenn.) 
425  (1839),  a  widow  who  had  signed 
a  mortgage  was  held  not  a  necessary 
party.  See  Mclver  v.  Cherry,  8 
Humph.  (Tenn.)  713  (1848). 

8  Wright  V.  Langley.  36  HI.  381, 
883  (1865). 

*  Smith  V.  Gardner,  42  Barb.  (N. 
T.)  356  (1864).  See  Northrup  v. 
Wheeler,  43  How.  (N.  Y.)  Pr.  122 
(1872),  where  the  foreclosure  was  by 
advertisement ;  Gilbert  v.  Maggord, 
2  111.  (1  Scam.)  471  (1838) ;  Eaton  v. 
Simonds,  31  Mass.  (14  Pick.)  98 
(1833) ;  Hildreth  v.  Jones,  13  Mass. 
525.  See  Bolton  v.  Ballard,  13  Mass. 
227  (1816).  Seemingly  eonira,  Bird 
V.  Gardner,  10  Mass.  364  (1813).  In 
Wilson  V.  Scott,  29  Ohio  St.  636 
(1876),  the  wife  of  a  mortgagor,  who 
had  executed  the  mortgage  before 
marriage,  was  held  not  a  necessary 
defendant.  See  the  Indiana  and 
Illinois  cases  cited  on  purchase 
money  mortgages  in  the  following 
notes. 

"  Burton  v.  Lies,  21  Cal.  87  (1862). 
See  Bayly  v.  Muehe,  65  Cal.  845 
(1884). 


160 


WIFE   NOT    SIGNING   MORTGAGE. 


[§  136. 


§  136.  Wife  not  executing  mortgage — Her  remedies 
if  omitted  as  defendant. — Where  the  mortgage  was  given 
for  purchase  money,  the  wife's  inchoate  right  of  dower 
attaches  to  the  equity  of  redemption,  and  she  is  just  as 
necessary  a  defendant  as  she  would  have  been  had  she  signed 
the  mortgage,  and  her  rights  will  not  be  affected  unless  she 
is  made  a  party  to  the  action.*  But  in  Illinois,"  Indiana*  and 
Michigan,*  the  contrary  ruling  prevails,  that  the  wife  is  not 
a  necessary  defendant.  If  the  wife  does  not  sign*  a  mort- 
gage executed  by  her  husband  during  coverture,  an  action  to 
foreclose  it  will  not  affect  her  rights,  even  if  she  is  made  a 


■  Mills  V.  VanYoorhies,  20  N.  T. 
412  (1859)  ;  s.  c.  10  Abb.  (N.  Y.)Pr. 
152  (1859),  aff'g  23  Barb.  (N.  Y.) 
125  (1856).  Judge  Selden,  wilting 
the  opinion,  cites  Stow  v.  Tifft,  15 
Johns.  (N.  Y.)  458  (1818),  and  gives 
a  sketch  of  the  history  of  the  statute 
for  purchase  money  mortgages. 
Wheeler  v.  Morris,  2  Bosw.  (N.  Y.) 
524  (1858)  ;  Blydenburgh  v.  North- 
rop, 13  How.  (N.  Y.)  Pr.  289  (1856); 
Brackett  v.  Baum,  50  N.  Y.  8  (1872), 
per  Rapallo,  J.,  holds  that  the  wife 
is  not  a  necessary  party  in  the  fore- 
closure of  a  purchase  money  mort- 
gage by  advertisement.  Young  v. 
Tarbell,  37  Me.  509  (1854) ;  Fox  v. 
Pratt,  27  Ohio  St.  512  (1875) ;  Culver 
V.  Hnrper,  27  Ohio  St.  464  (1875); 
Welch  V.  Buckins,  9  Ohio  St.  331 
(1859);  Carter  v.  Goodwin,  3  Ohio  St. 
75  (1853) ;  Foster  v.  Hickox,  38  Wis. 
408  (1875),  authorities  collated  and 
tbe  subject  generally  discussed,  per 
Ryan,  Ch.  J. ;  Thompson  v,  Lyman, 
28  Wis.  266  (1871) ;  Cary  v.  Wheeler, 
14  Wis.  281  (1861);  Holdane  v 
Sweet,  55  Mich.  196  (1884). 

»  Short  v.  Raub,  81  111.  509  (1876), 
relying  upon  Stephens  v.  Bichnell, 
27  HI.  444  (1862). 

»  Fletcher  v.  Holmes,  32  Ind.  497, 
506,  536  (1870) ;  opinions  per  Elliott, 


J  ,  and  Gregory,  Ch.  J.,  collating 
and  reviewing  the  cases  ;  Frazer,  J., 
wrote  a  dissenting  opinion.  See 
Walters  v.  Walters,  73  Ind.  425 
(1881).  But  dower  was  abolished  in 
Indiana  by  the  Code  of  1852,  and  the 
wife  was  made  an  heir.  Hoskins  v. 
Hutchings,  37  Ind.  324  (1871) ;  May 
V.  Fletcher,  40  Ind.  575  (1872),  per 
Wooden,  J.,  citing  Fletcher  v. 
Holmes,  32  Ind.  497,  506,  536  (1870), 
and  collating  the  cases.  See  the 
Indiana  acts  of  1875  and  1879.  See 
the  early  case  of  Nottingham  v.  Cal- 
vert, 1  Ind.  527  (1849),  apparently 
supporting  the  New  York  rule. 

*  Amphlett  v.  Hibbard,  29  Mich. 
298  (1874). 

«  Baker  v.  Scott,  62  111.  86  (1871) 
Leary  v.  Shaffer,  79  Ind.  567  (1881) 
Sutton  V.  Jervis,  31  Ind.  265  (1869) 
Mooney  v.  Maas,  22  Iowa,  380,  383 
(1867);    Amphlett  v.   Hibbard,    29 
Mich.   298  (1874);    Parmenter    v. 
Binkley,  28  Ohio  St.  32  (1875).    A 
mortgage  signed  by  a  wife,  but  not 
acknowledged  by  her,  is  not  so  exe- 
cuted as  to  release  her  dower.    Shel- 
don V.  Patterson,  55  lU.  507  (1870) ; 
Westfall  V.  Lee,  7  Clarke  (Iowa),  12, 
14  (1858).    See  Walsh  v.   Wilson, 
130  Mass.  124  (1881). 


§  136.]  EEILEDIES    OF    OMITl^ED    WIFE.  161 

party,  without  allegations  in  the  complaint  setting  forth  the 
facts,  and  even  with  such  allegations,  it  is  doubtful  whether 
her  rights  will  be  affected  in  any  way.'  In  an  action  brought 
by  a  widow  for  the  recovery  of  her  dower  in  lands  which  had 
been  sold  under  the  foreclosure  of  a  mortgage  which  she 
had  not  executed  with  her  husband,  her  dower  was  held 
paramount  to  the  mortgage  and  not  affected  by  the  fore- 
closure, although  she  was  made  a  defendant  under  the 
general  allegation  of  having  some  interest  in  the  premises.* 

Where  a  widow's  dower  has  been  admeasured  in  prem- 
ises mortgaged  by  her  husband  alone,  the  decree  of  fore- 
closure should  be  for  the  sale  of  the  remaining  two-thirds 
in  the  first  place,  and  then  for  the  sale  of  the  admeas 
ured  third, — subject,  however,  to  the  dower.^  If  a  wife  or 
widow,  having  a  right  of  dower,  is  not  made  a  party,  it  is 
believed  that  the  mortgagor  or  any  other  defendant  may 
object  to  the  omission  by  demurrer  or  answer.*  The  wife  of 
a  mortgagor  is  no  more  a  necessary  party  than  the  mortgagor 
himself  after  she  has  joined  in  a  deed  with  him,  conveying 
their  equity  of  redemption  to  a  purchaser.' 

The  remedy  of  the  wife  or  widow,  whenever  she  is 
omitted  as  a  party,  is  to  redeem ;'  but  this  right  to  redeem 


'  Merchants'  Bank  v.    Thomson,  lent,  the  wife  was  held  restored  to 

55  N.  y.  7  (1873)  ;  Lewis  v.  Smith,  her  dower.     See  Popkin  v.   Bum- 

9  N.  Y.  502,  514,  519  (1854).  affirming  stead,  8  Mass.  491  (1812). 
11  Barb.(N.  Y.)152  (1851);  Lainerv.  «  Mills  v.  VanVoorhies,  20  N.  Y. 

Smith,  37  Hun  (N.  Y.)  529  (1885) ;  412    (1859)  ;    Denton  v.   Nanny,   8 

Payu  V.  Grant,  23  Hun  (N.  Y.)  134  Barb.  (N.  Y.)  618  (1850) ;  Ross  v. 

(1880)  ;    Foster  v.  Hickox,  38  Wis.  Boardman,    22    Hun    (N.    Y.)    527 

408  (1875).  (1880)  ;  Bell  v.  Mayor  of  Xew  York, 

»  Lewis  V.   Smith,    9  N.    Y.    502  10  Paige  Ch.  (N.Y.)  49  (1843) ;  Carll 

(1854).  V.  Butman,    7  Me.    (7  Greenl.)   102 

3  Morton  v.  Noble,    22  Ind.    160  (1830)  ;  VanVronker  v.  Eastman,  48 

(1864).  Mass.  (7  Mete.)  157  (1843)  ;  Gibson  v. 

*  See  ante  %  128.  Crehore,    22    Mass.    (5    Pick.)    146 

*  The  reasons  stated  in  §  118  ante,  (1827).  See  Sheldon  v.  Patterson, 
apply  to  the  wife  or  widow  as  well  55  111.  507  (1870),  where  several 
as  to  the  mortgagor.  Elmendorf  v.  mortgages,  some  of  which  the  wife 
Lockwood,  4  Lans.  (N.  Y.)  393  had  not  executed,  were  fore- 
(1871).  In  Maloney  v.  Horan,  12  closed  in  one  action  ;  Opdyke  v. 
Abb.  (N.  Y.)  Pr.  N.  S.  289  (1872),  Bartles,  11  N.  J.  Eq.  (SStockt.)  133 
where  a  deed  was  set  aside  as  fraudu-  (1856). 

(11) 


162  SERVING    SUMMONS    ON   WIFE.  [§  137. 

does  not  accrue  until  the  death  of  the  husband,  ai  which 
time  the  dower  becomes  fixed.'  She  can,  however,  assert 
her  rights  before  the  death  of  her  husband,  and  have  the 
value  of  her  inchoate  dower  computed  by  the  annuity  tables 
and  paid.*  Ejectment  can  not  be  maintained  by  a  wife  or  a 
widow.*  If  the  widow  accepts  a  devise  or  bequest,  which  is 
made  to  her  in  lieu  of  dower,  it  is  believed  that  she  will  not 
be  a  necessary  defendant.* 

§  137.  Wife  of  mortgagor ;  service  of  summons  or 
process  under  early  practice.— At  common  law,  and  in 
the  chancery  practice  of  this  state,  the  summons,  or  subpasna, 
was  not  required  to  be  served  upon  the  wife  of  the  owner  of 
the  equity  of  redemption,  where  she  was  made  a  party  to 
the  foreclosure  for  the  purpose  of  cutting  off  her  inchoate 
right  of  dower ;  but  the  husband  was  bound,  except  where 
the  estate  was  the  separate  property  of  the  wife,  to  enter  a 
joint  appearance  and  to  put  in  an  answer  for  himself  and  wife. 

This  practice  was  based  upon  the  common-law  doctrine 
that  a  husband  and  wife  are  one  person,  and  that  the  wife's 
inchoate  right  of  dower  was  a  kind  of  interest  which  resulted 
from  the  marital  relation,  and  did  not  belong  to  her  as  a 
separate  estate.*  "  The  general  rule  is,  that  the  service  of  a 
subpoena  against  husband  and  wife  on  the  husband  alone  is 
a  good  service  on  both,  and  the  reason  is,  that  the  husband 
and  wife  are  one  person  in  law,  and  the  husband  is  bound  to 
answer  for  both.'"  It  must  be  kept  in  mind  that  such  service 
upon  the  husband  was  good  only  when  the  wife's  interest  in 
the  property  was  an  inchoate  right  of  dower;  when  her 


>  White  V.  Coulter,  1  Hun  (N.  Y.)  •  Foote  v.  Lathrop,  53  Barb.  (N. 

357,  366  (1874);  modified  in  59  N.  Y.  Y.)  183  (1869),  appeal  dismissed  in 

629  (1874) ;  Morton  v.  Noble,  22  Ind.  41  N.  Y.  858  (1869) ;  Eckerson  v. 

160  (1864) ;  followed  in  Grable  v.  Vollmer,  11  How,   (N.  Y.)  Er.  42 

McCuUoch,  27  Ind.  472  (1867).  (1855) ;  Ferguson  v.  Smith,  2  Johns. 

2  Unger  v.  Letter,  32  Ohio  St.  210  Ch.  (N.  Y.)  139  (1816) ,  Lathrop  v. 

(1877).  Heacock,  4  Lans.  (N.  Y.)  1  (1871) ; 

2  Smith  V.  Gardner,  42  Barb.  (N.  Leavittv.  Cruger,  1  Paige  CJh.  (N.Y.) 

Y.)  356  (1864).  421  (1829). 

*  Zaegel  v.  Kuster,  51  Wis.    31  •  Ferguson  v.  Smith,  3  Johns.  Ch. 

(1881).    See  Lewis  v.  Smith,  9  N.  (N.  Y.)  139  (1816),  per  Chancellor 

Y.  502  (1854).  Kent. 


§  138.]  SERVING    SUJEMOI^S    ON   WIFE.  163 

separate  property  was  concerned  in  the  action,  she  had  to  be 
personally  served.'  It  is  to  be  further  observed  that  the 
summons  or  process  had  to  be  directed  to  the  wife ;  if  her 
name  was  omitted,  the  court  acquired  no  jurisdiction  of  her, 
and  her  inchoate  right  of  dower  would  not  be  cut  off  or 
affected  in  any  way  by  the  action  ;  her  right  to  redeem  it 
became  perfect  at  the  death  of  her  husband. 

§  138.  Wife  of  mortgagor ;  service  of  summons  under 
present  practice. — It  is  believed  that  this  old  practice  has 
been  changed  in  New  York  by  the  Code  of  Civil  Procedure. 
There  is  some  conflict  of  opinion  in  the  reported  cases  as  to 
the  interpretation  of  §  450,'  but  the  latest  decisions  indicate 
that  the  summons  must  be  served  upon  the  wife,  and  that 
service  upon  her  husband  alone  is  not  sufficient.'  In  a  case 
in  Maryland,  a  summons  was  directed  to  the  wife,  but  not 
served  upon  her ;  the  court  said  that  as  she  had  a  potential 
right  of  dower,  and  was  not  within  its  jurisdiction,  she  was 
not  affected  by  the  action  ;*  and  in  another  case,-  where  a 
husband  appeared  and  confessed  u  bill  for  the  foreclosure  of 
a  mortgage  executed  by  himself  and  wife,  the  wife  was 
held  not  bound  by  the  decree,  as  she  did  not  appear  in 
person  and  no  summons  was  issued  against  her.* 

Under  the  old  practice,  too,  the  wife  could  not  appear 
separately  and  on  her  own  account  in  an  action  to  cut  off 
her  inchoate  dower,  without  leave  of  the  court ;  now,  how- 
ever, there  is  no  question  that  the  wife  of  the  owner  of  the 
equity  of  redemption  may  appear  and  defend  in  her  own  name 
and  by  her  own  attorney,  as  though  she  were  a  feme  sole* 


'Mills  V.  VanVoorhies,  10  Abb.  (N.Y.)  645  (1881) ;  Hubbell  v.  Sibley, 

(N.  Y.)  Pr.    152  (1859) ;  Watson  v.  5    Lans.    (N.    Y.)    51    (1871).      Iil 

Churcb,  3  Hun  (N.  Y.)  80  (1874) ;  Northrup  v.  Wheeler,  43  How.  (N. 

Lathrop  V.  Heacock,  4  Lans.  (N.  Y.)  Y.)  Pr.   123,    123    (1872).  the  fore- 

1  (1871) ;  Watson  v.  Church,  5  T.  «&  closure  was  by  advertisement,  and 

C.    (N.   Y.)    243  (1875) ;  White  v.  service   upon    the    wife    was   held 

Coulter,    3    T.    «fe    C.    (N.  Y.)  608  indispensable  under  the  statute.    See 

(1874) ;   McArthur  v.  Franklin,  15  also  the  cases  cited  below. 

Ohio  St.  485  (1864).  *  Hurtt  v.  Crane,  36  Md.  29  (1872). 

«  Old  N.  Y.  Code,  §  114.  »  Pope  v.  North,  33  111.  440  (1864). 

*  White  V.  Coulter,  59  N.  Y,  629  « Janinski  v.  Heidelberg,   21  Hun 

(1874).  modifying  1  Hun  <N.  Y.)  357  (N.  Y.)  439  (1880) ;  Muser  v.  Miller, 

(1874).    See  WeU  v.  Martin,  24  Hun  3  N.  Y.  Civ.  Proc.  Rep.  394  (1883); 


164  WIFE WHEN  NOT  NECESSARY.    [§§  139-140. 

After  the  death  of  the  husband,  service  of  the  summons 
or  notice  upon  the  widow  is  indispensable.* 

§  139.  Wife  of  mortgagor  or  owner  of  equity  oi 
redemption,  not  necessary  in  those  states  where  the 
common-law  dockrine    of   dower  has  been  changed. — 

In  those  states  where  statutes  have  been  enacted  which 
completely  sever  the  husband  and  wife,  and  make  them 
independent  of  each  other,  as  to  their  rights  in  real  property, 
the  wife  is  not  a  necessary  party  to  an  action  to  foreclose  a 
mortgage  upon  her  husband's  property,  even  though  she 
signed  the  mortgage.*  The  reason  for  this  rule  is,  that,  as 
she  has  no  interest  whatever  in  her  husband's  real  estate, 
she  can  have  no  interest  whatever  in  an  action  affecting  it.  In 
North  Carolina  the  husband  has  absolute  dominion  over  his 
land  during  his  life,  and  can  give  a  perfect  conveyance  of  it 
without  the  consent  of  his  wife  ;  in  that  state,  therefore,  the 
wife  is  not  a  necessary  party  to  the  foreclosure  of  a  mortgage 
against  her  husband's  property.^  But  if  the  wife  has  signed 
the  bond  or  instrument  of  indebtedness,  charging  herself 
with  its  payment,  and  a  personal  judgment  for  deficiency  is 
sought  against  her,  she  is  a  necessary  party  for  that  purpose.* 

§  140.  The  husband  of  a  mortgagor  who  is  a  married 
woman,  having  a  separate  estate,  generally  not  neces- 
sary.— In  most  states  where  the  common-law  doctrine  of 
curtesy  remains  unmodified  by  statute,  a  husband  who  joins 
with  his  wife  in  executing  a  mortgage  on  her  separate  real 
property  is  not  a  necessary  defendant,  if  the  sale  in  the 
action  to  foreclose  takes  place  during  the  wife's  life-time.' 


B.  c.  65  How.  (N.  Y.)  Pr.  286  (1883) ;  Thornton    v.    Pigg,     24    Mo.    249 

FitzSimons  v.  Harrington,  1  N.  Y.  (1857) ;  Miles  v.  Smith,  22  Mo.  502 

Civ.  Proc.  Rep.   360  (1881) ;   Fitz-  (1856) ;  Etheridge  v.  Vernoy,  71  N. 

geraldv.  Quann,  1  N.  Y.  Civ.  Proc.  C.    185    (1874).      See     Stevens     v. 

Rep.  278,  279  (1881) ;  contra,  Fitz-  Campbell,  21  Ind.  471  (1863). 

gerald  v.  Quann,  1  N.  Y.  Civ.  Proc.  '  Etheridge  v.  Vernoy,  71  N.  C. 

Rep.  273  (1881) ;  N.  Y.  Code  Civ.  185  (1874). 

Proc.  §  450  ;  Throop's  Code,  p.  440.  *  See  post  chap.  x. 

•  King  v.  Duntz,  11  Barb.  (N.  Y.)  *  Trustees  of  Jones  Fund  v.  Roth, 

191  (1851).     See  ante  §§  135,  136  and  18  N.  Y.  Wk.  Dig.  459  (1883),  citing 

the  cases  cited.  the  statutes,  and  explaining  the  legal 

'  Powell  V.  Ross,  4  Cal.  197  (1854);  reasons  for  the  rule. 


§  141.]     HUSBAND  NOT  NECESSARY  PARTY.        165 

Neither  by  common-law  nor  by  the  statute  of  any  state  does 
a  husband  have  any  interest  in  his  wife's  real  property  until 
her  death.  This  is  the  general  rule  ;  but  in  some  states  the 
husband  is  deemed  a  necessary  party,  owing  to  statutory 
enactments  and  the  special  rules  of  their  courts.'  Four  things 
are  requisite  to  an  estate  by  curtesy,"  to  wit:  marriage, 
actual  seisin  of  the  wife,  issue,  and  the  death  of  the  wife ; 
and  in  New  York  the  wife  must  die  intestate.  Upon  the 
death  of  the  wife  intestate,  after  the  accomplishment  of 
these  four  requisites,  the  husband  becomes  a  necessary  defen- 
dant in  order  to  cut  off  his  curtesy  and  to  perfect  the  title.* 
In  those  states  where  statutes  have  made  wholly  separate 
and  independent  of  each  other  the  respective  estates  of  a 
husband  and  a  wife,  the  husband  has  no  right  to  curtesy  nor 
to  any  other  interest  in  his  wife's  real  property,  and  is  conse- 
quently not  a  necessary  party,  so  far  as  the  title  is  concerned. 
If,  however,  he  has  obligated  himself  for  the  indebtedness 
by  signing  a  note  or  bond,  he  is  a  necessary  party  if  a 
personal  judgment  for  deficiency  is  sought  against  him.* 

§  141.  Heirs  of  mortgagor  or  owner  of  the  equity  of 
redemption  necessary. — The  heirs'  of  a  mortgagor  or  person 
who  dies  seized  of  the  equity  of  redemption  in  mortgaged 


'  The  husband  has  been  held  a  Mass.    Laws  of    1874,    chap.    184 ; 

necessary  party    in    the    following  Camden  v.  Vail,  23  Cal.  633  (1863) ; 

cases :  Hilton  v.    Lothrop,   46  Me.  Harrison    v.    Brown,    16    Cal.    287 

297    (1858);    Yager    v.   Merkle,    26  (1860);    Black  v.    Galway,   24  Pa. 

Minn.  429  (1880)  ;  Wolf  v.  Banning,  St.    18  (1854).     See  Laws  of  New 

3    Minn.    202    (1859).      Landon    v.  York,    1848,    chap.    200;   also  ante 

Burke,    36  Wis.  378  (1874),  cites  a  §  134,  and  the  second  note  to  the 

statute  making  the  husband  a  neces-  section, 

sary  party  ;  Mavrich  v.  Grier,  3  Nev.  '■'  4  Kent  Com.  29. 

52  (1867).     In  Andrews  v.  Swanton,  ^  Fogal  v.  Pirro,  10  Bosw.  (N.  Y.) 

81  Ind.  474  (1882),  the  husband  was  100  (1862) ;  Leggett  v.  McClelland, 

held  a  proper,  if  not  a  necessary,  39  Ohio  St.  624  (1884). 

party.     In  some  states  a  mortgage  *  Thornton  v.  Pigg,  24  Mo.   249 

executed  by  a  married  woman  upon  (1857) ;   Riddick  v.  Walsh,  15  Mo. 

herseparate  real  estate  is  void,  unless  519,  538  (1852);  Building,  Loan  & 

her  husband  joins  in  its  execution ;  Sayings  Assoc,  v.  Camman,   UN. 

in  these  states  he  is  of  course   a  J.  Eq.  (3  Stockt.)  382  (1857).     See 

necessary    party  to  a  foreclosure  ;  post  chap.  x. 

Weed  Sewing  Mach.  Co.  v.  Emer-  ^  Wood  v.  Morehouse,  1  Lans.  (N. 

son,  115  Mass.  554  (1874).     See  the  Y.)  405  (1869) ;  Leonard  v.  Morris, 


166 


HEIKS    NECESSARY    DEFENDAJ^TS. 


[§  141. 


premises  are  as  necessary  parties  to  a  foreclosure  as  the 
deceased  mortgagor  or  owner  would  have  been,  if  the  action 
had  been  brought  in  his  life-time,  as  they  succeed  by  opera- 
tion of  law  under  the  statute  of  descent  to  the  entire  interest 
of  the  decedent  in  the  property,  the  same  as  a  purchaser 
would  succeed  to  such  interest  by  grant.  It  is  not  suffi- 
cient to  make  the  personal  representatives  of  the  deceased 
owner  alone  defendants,'  except  in  cases  of  foreclosure  by 


9  Paige  Ch.  (N.  Y.)  90  (1841); 
Bigelow  V.  Bush,  6  Paige  Ch.  (N. 
Y.)  345  (1837);  Williamson  v.  Field,  3 
Sandf.  Ch.  (N.  Y.)  583  (1845) ;  Bell  v. 
Hall,  76  Ala.  546  (1884) ;  Hunt  v. 
Acre,  28  Ala.  580  (1856)  ;  Erwin  v. 
Ferguson,  5  Ala.  158(1843);  Duval  v. 
McCloskey,  1  Ala.  708  (1840);  Pillow 
V.  Sentelle,  39  Ark.  61  (1883) ;  Kier- 
nan  V.  Blackwell,  27  Ark.  235  (1871); 
Brown  v.  Orr,  29  Cal.  120  (1865) ; 
Burton  v.  Lies,  21  Cal.  87,  91  (1862); 
Pritchard  v.  Elton,  38  Conn.  434 
(1871)  ;  Britton  v.  Hunt,  9  Kan. 
228  (1872)  ;  Brenner  v.  Bigelow,  8 
Kan.  496,  504  (1871) ;  Lane  y.  Ers- 
kine.  13  111.  501  (1851),  approved  and 
followed  in  JTai  vey  v.  Thornton,  14 
I.i;.  Jr?  ■1852;;  McKay  v.  Wakefield, 
63  Ind.  27  (1878);  Daugherty  v. 
Deardorf,  107  Ind.  527;  s.  c.  5  West, 
Hep.  850  (1886);  Newkirk  v.  Burson, 
21  Ind.  129  (1863);  Shaw  v.  Hoadley, 
BBlackf.  (Ind.)  105(1846);  Slaughter 
V.  Foust,  4  Blackf.  (Ind.)  379  (1837) ; 
White  V.  Pvittmeyer,  30  Towa,  268, 
272  (1870),  citing  many  cases  and 
authorities ;  Smith  v.  Manning,  9 
Mass.  422  (1812);  Abbott  v.  God- 
froy's  Heirs.  1  Mich.  178  (1849),  per 
Miles,  J.,  collating  and  reviewing 
the  tiulhorities  ;  Averett  v.  Ward, 
1  Bush.  (N.  C.)  Eq.  192  (1853) ;  Bar- 
rett V.  Cochran,  8  S.  C.  48  (1875)  ; 
Williams  V.  Beard,  1  S.  C.  309(1869); 
Denison  v.  League,  16  Tex.  399,  409 
(1856)  ;  George  v.  Cooper,  15  W.  Va. 


666  (1880);  Zaegel  v.  Kuster,  51  Wis. 
31  (1881),  explaining  the  statute  of 
1860,  chap.  303 ;  Stark  v.  Brown, 
12  Wis.  572  (1860) ;  see  the  statute 
of  1842 ;  Houghton  v.  Mariner,  7 
Wis.  244  (1858).  In  Indiana  the 
widow  is  made  an  heir  by  statute, 
and  is  a  necessary  party.  See 
Fletcher  v.  Holmes,  32  Ind.  497, 
510  (1870),  and  the  cases  cited.  A 
sale  has  been  held  wholly  void  for 
the  omission  of  the  heirs;  Shiveley'3 
Adm's  V.  Jones,  6  B.  Mon.  (Ky.) 
274  (1845)  ;  Renshaw  v.  Taylor,  7 
Oreg.  315(1879).  lu  Massachusetts, 
where  there  is  a  tenant  in  possession 
on  whom  to  serve  the  process,  the 
heirs  are  not  necessary  parties ; 
Shelton  v.  Atkins,  39  Mass.  (23 
Pick.)  71  (1839).  The  heirs  of  a 
sub-vendee  are  necessary  defendants 
in  the  foreclosure  of  a  land  contract; 
Batre  v.  Auze's  Heirs,  5  Ala.  173 
(1843).  In  Bayly  v.  Muehe,  65  Cal. 
345  (1884),  the  heirs  were  held  not 
necessary  parties  where  the  personal 
representatives  had  been  made  defen- 
dants. 

»  Zaegel  v.  Kuster,  51  Wis.  31 
(1881) ;  Stark  v.  Brown,  12  Wis.  573 
(1«60);  see  the  statute  of  1842, 
referred  to.  In  Missouri  the  heirs 
are  by  statute  not  necessary  par- 
ties; Perkins  v.  Wood,  27  Mo.  547 
(1858) ;  Code  of  1845.  See  Dixon's 
Adm'rs  v.  Cuyler's  Adm'rs,  27 
Ga.  248  (1859),  holding  the  personal 


§  142.]  HEIES    NECESSAKY    DEFENDANTS.  167 

advertisement,'  The  guardian  of  an  infant  heir  is  not  a  neces- 
sary party,  but  the  infant  must  be  made  a  defendant,  and  the 
process  of  the  court  must  be  personally  served  upon  him.' 

In  reviving  a  foreclosure  commenced  against  a  deceased 
mortgagor  in  his  life-time,  his  heirs  are  necessary  parties  in 
order  to  produce  a  perfect  title.  Thus,  a  grantor  died 
during  the  pendency  of  an  action  in  the  nature  of  a  fore- 
closure, for  an  accounting  and  sale  of  the  premises,  brought 
upon  a  deed  given  to  secure  an  advance  of  money;  and  the 
suit  having  been  revived  against  his  administrator  alone,  a 
bidder  at  the  sale  was  relieved  of  his  bid  on  the  ground  that 
the  title  offered  was  defective,  the  heirs  having  been  omitted  as 
defendants.'  The  general  principles  of  law  that  have  been 
previously  stated  as  rendering  a  mortgagor  or  an  owner  of 
the  equity  of  redemption  by  purchase  a  necessary  party, 
are  equally  applicable  to  the  heirs  at  law  of  such  a  mortgagor 
or  owner.* 

§  142.  Heirs  of  mortgagor  or  owner  —  When  not 
necessary. — If  the  mortgagor  parted  in  his  life-time  with 
the  equity  of  redemption,  his  heirs  at  law  are  not  necessary 
parties  ;'  but  where  the  mortgagor  at  his  decease  still  holds 
an  equitable  interest  in  the  equity  of  redemption,  his  heirs, 
succeeding  to  his  identical  rights,  will  or  will  not  be  neces- 
sary parties  according  to  the  rules  of  law  previously  stated.* 


representatives  instead  of  the  heirs  ^  Dodd  v.  Neilson,  90  N.  Y.  243 

necessary  parties.     See  post  %  145.  (1882).    In  Givens' Admr'sv.  Daven- 

»  ^Mackenzie  v.    Alster,  64  How.  port,  8  Tex.  451  (1852),  the  heirs  of 

(N.    Y.)  Pr.   388    (1882)  ;    Low    v.  a  mortgagor  who  died  pending  the 

Purdy,  2  Lans.  (N.  Y.)  424  (18G9).  foreclosure  were  held  not  necessary 

See  pust  §  145,  and  the  cases  cited  in  parties  in  reviving  it ;  aliier  where 

this  section.     In  Illinois,  in  a  fore-  the  action  was  commenced  agairLst 

closure  by  scire  facias,  it  has  been  the  personal  representatives  after  the 

held  sufficient  under  the  statute  to  death  of  the  mortgager, 

make  either  the  heirs  or  the  execu-  *  See  ante  §§  126,  127. 

tors  or  administrators  parties  ;  Rock-  ^  Daly  v.  Bui'chall,  13  Abb.  (N. 

well  V.    Jones,    21   111.    279  (1859) ;  Y.)  Pr.  N.  S.  264,  268  (1872).     In 

John  V.  Hunt,  1  Blackf.  (Ind.)  324  point,  Wilkins  v.   Wilkins,  4  Port. 

(1824).  (Ala.)  245  (1837) ;  Hibernia  Savings 

*  Alexander  v.  Frary,  9  Ind.  481  Society  v.  Herbert,  53  Cal.  375(1879); 

(ISo?)  ;  Moore  v.  Starks,  1  Ohio  St.  Medley  v.  Elliott,  62  III.  532  (1872). 

369  11853).     See  the  iS[.  Y.  Code  Civ.  See  ante  §§  118,  119. 

Proc.  g  420.  «  See  ante  %%  120-128. 


168  HEIRS WHEN   NOT   NECESSARY.  [§142. 

If  a  judgment  for  deficiency  is  sought  against  the  estate  of  a 
deceased  mortgagor,  or  of  a  deceased  purchaser,  who  has 
duly  assumed  the  payment  of  the  mortgage  debt,  the  legal 
representatives  of  the  decedent  are  necessary  parties  for  that 
purpose  ;'  but  they  are  not  necessary  parties  for  the  purpose 
of  foreclosing  the  title.'  The  reason  for  this  is,  that  in  most 
states  the  executors  and  administrators,  or  legal  representa- 
tives, of  a  deceased  person  receive  no  title  or  interest  in  the 
land. 

In  those  states,  however,  where  the  real  as  well  as  the 
personal  property  passes  into  the  hands  of  executors  or 
administrators,  they  are  necessary  parties  to  a  foreclosure  in 
the  place  of  the  heirs,  who  are  then  not  necessary  parties  f 
and  in  statutory  foreclosures  by  advertisement  in  New  York 
the  personal  representatives  are  indispensable  parties.''  If  the 
heirs,  or  any  of  them,  are  omitted  as  parties,  any  defendant 
interested  in  the  action  may  object  by  demurrer,  if  the  defect 
appears  upon  the  face  of  the  complaint,  or  by  answer,  and 
compel  such  omitted  heir  to  be  made  a  party.*  And  an 
omitted  heir  will  always  be  permitted  to  appear  and  defend 
on  application  to  the  court.° 

Where  the  decedent  leaves  a  will,  devising  the  equity  of 
redemption  in  mortgaged  premises,  the  devisees  and  benefi- 
ciaries become  necessary  parties  instead  of  the  heirs  at  law.' 
But  if  the  will  contains  a  power  of  sale  directing  distribution 
of  the  estate  among  certain  heirs,  the  heirs  will  be  necessary 
parties,  as  the  fee  is  devised  to  them  subject  to  the  execu- 
tion of  the  power  of  sale.*  As  the  probate  of  a  will  of  real 
estate  may  be  impeached  within  a  limited  time,"  it  is  proper, 
and  may  be  necessary  under  certain  circumstances,  to  make 
the  heirs  at  law  also  parties.  The  plaintiff  omits  them  at  the 
risk  of  their  subsequently  redeeming. 


1  See  post  chap.  x.  ^  Zundel  v.  Tacke,  47  Hun  (N.  Y.) 

«  Lcouard  v.  Morris,  9  Paige  Ch.  239  (1888). 

(N.  Y.)  90  (1841).  '  See  post  §  143,  on  devisees ;  Hunt 

a  Harwood  v.  Marye,  8  Cal.   580  v.  Acre,  28  Ala.  580  (1856). 

(1857).  ^  Nooaan  v.  Brennemann,  54  N. 

*  See  post  %  145,  the  last  paragraph  Y.  Super.  Ct.  (22  J.  &  S.)  337  (1887). 
and  the  cases  cited.  »  N.  Y.  Code  Civ.  Proc.  §  2627. 

*  See  ante  %  128. 


§  143.]  DEVISEES   IfECESSAKY   DEEEifDAl^TS.  169 

Where  the  title  to  mortgaged  premises  is  conveyed  to  a 
man  and  his  wife  as  tenants  by  the  entirety/  or  is  held 
jointly  by  partners  or  others,  the  heirs  of  one  of  the  deceased 
joint  owners  are  not  necessary  parties  to  cut  off  the  equity 
of  redemption  and  to  perfect  the  title  by  foreclosure ;  if, 
however,  the  deceased  joint  owner  signed  the  bond  or 
became  in  any  way  liable  for  the  mortgage  debt,  his  legal 
representatives  are  proper  parties  for  the  purpose  of  obtain- 
ing a  judgment  of  deficiency  against  his  estate.  The  reason 
for  this  rule  is  based  on  the  common-law  doctrine  of  survi- 
vorship, by  which  the  entire  title,  upon  the  death  of  any  of 
the  joint  owners,  vests  in  the  survivors.* 

§  143.    Devisees  of  mortgaged  premises  necessary. — 

We  have  already  seen  that  when  the  title  to  mortgaged 
premises  devolves  upon  heirs  at  law  under  the  statute  of 
descent,  they  are  necessary  parties  to  a  foreclosure.  A  tes- 
tator is  authorized  by  statute  to  make  a  will,  superseding 
the  statute  of  descent  in  the  disposition  of  his  property. 
Following  the  analogy  of  the  rule  which  makes  an  heir  a 
necessary  party,  the  person  or  devisee  to  whom  the  testator 
passes  the  title  of  his  mortgaged  premises  by  will  is  also  a 
necessary  party  to  foreclose  the  equity  of  redemption,  as  he 
becomes  the  owner  of  the  same.'  A  mortgage  executed  by 
a  devisee  upon  lands  received  by  will,  is  always  subject  to 
equities  existing  against  the  premises  at  the  time  of  the 
testator's  death."  If  the  entire  title  to  the  premises  is  de- 
vised, the  heir,  of  course,  is  not  a  necessary  party,  as  he  has 
no  interest  in  the  property.^  As  a  surrogate's  decree, 
admitting  a  will  of  real  estate  to  probate,  is  only  presumptive 


'  Bertles  v.  Nunan,  92  N.  Y.  153  ters  not  whether  the  devise  is  ahso- 

(1883).     See  ante  %  123.  lute  or  in  trust  ;  Mayo  v.  Tomkies, 

■'  4  Kent  Com.  360.  6  Munf.  (Va.)  520  (1820) :  Graham's 

3  Leggett  V.  Mut.  Life  Ins.  Co.,  64  Exec'rs  v.  Carter,  2  Hen.  &  M.  (Va.) 

Barb.  (N.  Y.)  36  (1872) ;  Robinson  6  (1807) ;  Coles  v.  Forrest,  10  Beav. 

V.  Ilobinson,    1  Lans.  (N.  Y.)  117  552(1847). 

(186&)  ;     Nodine    v.    Greenfield,    7  *  Simons  v.  Bryce,  10  S.  C.  L.  354 

Paige  Ch.  (N.  Y.)  547  (1839)  ;  Sav-  (1878). 

ings  &  Loan  Society  v.    Gibb,  21  *  Macclesfield  v.  Fitton,  1  Vern. 

Cal.  595  (1863) ;  Sanderson  v.  Ed-  168  (1683)  ;  Lewis  v.  Nangle,  2  Ves. 

wards,  111  Mass.  335  (1873).    It  mat-  Sr.  431  (1752)  ;  s.  c.  1  Ambl.  150. 


170  LEG ATJEES   NECESSARY.  [§§144-14:5. 

evidence  of  the  matters  adjudged  in  the  decree,  and  as  the 
probate  of  the  will  may  be  impeached  within  a  limited 
time,  the  heirs  at  law  may,  during  such  time,  become  neces- 
sary defendants,'  and  they  ought  not  to  be  omitted  from  the 
action,  if  any  of  them  dispute  the  validity  of  the  will.  Until 
a  decree  is  made,  admitting  a  will  to  probate,  the  heirs  are 
necessary  parties ;  and  it  is  believed  that  the  devisees  are  also 
necessary.  It  is  suggested  that  in  such  a  case  the  rule  of 
law  may  be  applied  which  renders  both  the  vendee  and  the 
vendor  in  a  land  contract  of  mortgaged  premises  necessary- 
parties.* 

§  144.  Legatees  and  annuitants  necessary. — A  legacy 
or  an  annuity  charged  by  a  will  upon  mortgaged  premises 
is  a  lien  thereupon,  the  same  as  though  the  decedent  had 
mortgaged  or  otherwise  incumbered  the  equity  during  his 
life-time  ;  and  the  beneficiary  of  such  a  legacy  or  annuity  is 
an  indispensable  party  in  an  action  to  foreclose.'  It  seems, 
however,  where  a  legacy  is  made  generally  from  the  estate, 
and  not  charged  specifically  upon  the  mortgaged  premises, 
that  the  legatee  is  not  a  necessary  party :  but  such  a  legatee 
may  become  an  indispensable  party  if  there  is  an  insuffi- 
ciency of  personal  property  to  pay  the  legacy,*  and  it  becomes 
necessary  to  resort  to  the  mortgaged  premises  to  produce  a 
fund  to  pay  it. 

§  145.  Executors  and  administrators  generally  not 
necessary. — In  New  York  and  in  many  other  states  the 
administrator  of  a  person  who  dies  seized  of  an  equity  of 
redemption,  is  not  a  necessary  party  defendant  to  a  fore- 
closure,* except  where  the  action  is  commenced  during  the 


"  N.  Y.  Code  Civ.  Proc.  §  2637.  "  Hebron  Society  v.  Schoen,  60 
See  the  preceding  section  ;  exactly  How.  (N.  Y.)  Pr.  185  (1880). 
in  point,  Hunt  v.  Acre,  28  Ala.  580  '  For  the  New  York  cases  see  ante 
(1856).  §§  141,  142.  Dodd  v.  Neilson,  90 
2  See  ante  §  124.  N.  Y.  243  (1882),  held  that  it  was  not 
»  Hebron  Society  v,  Schoen,  60  sufficient  to  make  the  personal  repre- 
How.  (N.  Y.)  Pr.  185  (1880);  Mc-  sentatives  defendants  ;  the  heirs  were 
Gown  V.  Ycrks,  6  Johns.  Ch.  (N.  also  necessary,  Erwin  v.  Ferguson, 
Y.)  450  (1822) ;  Batchelor  v.  Middle-  5  Ala.  158  (1843) ;  Inge  v.  Board- 
ton,  6  Hare,  75  (1847).  man,  2  Ala.  331  (1841) ;  Wilkins  v. 


§  l-i5.]     EXECUTORS  NOT  NECESSARY  DEFENDANTS.  171 


pendency  of  a  proceeding  in  a  probate  court  to  sell  the  dece- 
dent's equity  of  redemption  to  pay  his  debts.*  The  reason 
for  this  rule  is,  that  administrators  have  no  interest  in  the 
real  estate  of  a  decedent.*  Neither  are  executors  necessary 
parties,  unless  their  office  is  coupled  with  an  interest  in  the 
property  by  trust,  power  of  sale  or  otherwise.  In  a  few 
states,  personal  representatives  are  held  indispensable  parties 
defendant,'  while  a  majority  of  the  decisions  indicate  that  it 


Wilkins,  4  Port.  (Ala.)  245  (1837) ; 
but  held  necessary  in  Dooley  v. 
YillaloDga,  61  Ala.  129  (1878); 
Bissell  V.  Marine  Co.  of  Chicago,  55 
111.  165  (1870) ;  Rockwell  v.  Jones, 
21  111.  279(1859)  ;  Trapierv.  Waldo, 
16  S.  C.  276  (1888) ;  Stark  v.  Brown, 
12  Wis.  572  (18G0) ;  Houghton  v. 
Mariner,  7  Wis.  244  (1858).  The 
personal  repre.sentative  of  a  deceased 
joint  mortgagor  should  not  be  made 
a  party,  according  to  Wiley  v.  Pia- 
•son,  23  Tex.  486  (1859)  ;  Martin  v. 
Harrison,  2  Tex.  456(1847). 

1  ]Sr.  Y.  Code  Civ.  Proc.  §§  2749, 
2797,  2798. 

^  Willard  v.  Nason,  5  Mass.  240 
(1809),     See  ante  %%  141,  142. 

'  In  Missouri  a  statute  makes  it 
sufficient  to  bring  the  personal  repre- 
sentatives into  the  action  ;  Perkins 
V.  Woods,  27  Mo.  547  (1858) ;  Cad- 
■wallader  v.  Cadwallader,  26  Mo.  76 
(1857) ;  Miles  v.  Smith,  22  Mo.  502 
(1856)  ;  Riley's  Adm'rs  v.  McCord's 
Adm'rs,  21  Mo.  285  (1855)  ;  s.  c.  24 
Mo.  265  (1857),  holding  the  per- 
sonal representatives  indispensable ; 
Randolph  V.  Widow,  etc.,  of  Chap- 
man, 21  La.  An.  486  (1869).  See 
Dixon  V.  Cuyler,  27  Ga.  248  (1859), 
holding  the  heirs  not  necessary 
parties.  Hall  v.  Musler,  1  Disney 
(Ohio),  35  (1855).  In  Blggerstaff  v. 
Loveland,  8  Ohio,  44  (1837),  it  was 
held  sufficient  to  make  the  peisoual 
representatives  parties  defendant  on 


the  ground  that  the  statute  reads, 
"heirs,  executors  or  administrators." 
See  also  Heighway  v.  Pendleton, 
15  Ohio,  735,  749,  758  (1846),  where 
it  was  held  that  the  statute  of  1807 
made  the  equity  of  redemption  a 
"chattel  descendible"  to  the  personal 
representatives,  and  not  to  the  heirs. 
Mebane  v.  Mebane,  80  N.  C.  34,  38 
(1879),  distinguishing  and  ruling 
contrary  to  Averett  v.  Ward,  1  Busb. 
(N.  C.)  Eq.  192  (1853);  Massie's 
Heirs  v.  Donaldson,  8  Ohio,  377 
(1838) ;  Hunsecker  v,  Thomas,  89 
Pa.  St.  154  (1879);  Wallace  v. 
Holmes,  40  Pa.  St.  427  (1861),  cit- 
ing the  statute;  Bryce  v.  Bowers,  11 
Rich.  (S.  C.)  Eq.  41  (1859);  Wright  v. 
Eaves,  10  Rich.  (S.C.)  Eq.  582  (1858); 
Gibbes  v.  Holmes,  10  Rich.  (S.  C.) 
Eq.  484,  493  (1859).  See  Trapier  v. 
Waldo,  16  S.  C.  276  (1881),  appar- 
ently overruling  these  cases.  In 
Texas  it  has  been  held  necessary 
under  a  statute  to  present  the  claim 
on  the  mortgage  to  the  personal 
representatives  before  foreclosing  ; 
Graham  v.  Yining,  1  Tex.  639 
(1847)  ;  the  remedy  against  the  mort- 
gagor's estate  must  be  pursued  in 
the  probate  court.  Limited  in  Cole 
V.  Robertson,  6  Tex.  356  (1851).  to 
the  effect  that  a  foreclosure  m  rem, 
but  not  an  action  in  personam,  can 
be  maintained  without  a  previous 
demand  on  the  personal  representa- 
tives. 


172 


TRUSTEES   NECESSARY    DEFENDANTS.  [§146. 


is  a  proper  and  advisable  practice  always  to  bring  before  the 
court  the  legal  representatives  of  a  deceased  owner  of  an 
equity  of  redemption.' 

In  the  statutory  foreclosure  of  mortgages  by  advertise- 
ment in  New  York,  the  rule  is  fixed  and  absolute  that  the 
notice  must  be  served  upon  the  "mortgagor,  or,  if  he  is 
dead,  upon  his  executor  or  administrator  ;'"  it  is  not  required 
to  be  served  upon  the  heirs  or  devisees.  If  no  personal 
representatives  have  been  appointed,  foreclosure  by  adver- 
tisement can  not  be  maintained.* 

§  146.  Trustees,  holding  an  interest  of  whatever  kind 
in  mortgaged  premises   for  beneficiaries,   necessary. — 

Whenever  the  title  to,  or  an  interest  in,  mortgaged  premises 
is  passed  to  a  person  in  trust  for  specific  purposes,  for  the 
benefit  of  other  persons,  the  trustee  is  always  a  necessary 
party  to  a  foreclosure  in  order  to  cut  off  the  entire  equity  of 
redemption.  The  reported  cases,  almost  without  an  excep- 
tion, sustain  this  proposition,  no  matter  what  the  character 
or  purpose  of  the  trust  may  be.*     Though  none  of  the  cases 


*  Personal  representatives  are  held 
proper  parties  in  Bayly  v.  Muelie, 
65  Cal.  345  (1884);  Savings  and  Loan 
Society  v.  Gibb,  21  Cal.  595  (1863) 
Burton  v.  Lies,  21  Cal.  87  (1862) 
Fallon  V.  Butler,  21  Cal.  24  (1862) 
Darlington  v.   Efley,  13  Iowa,  177 
(1862) ;    Hodgdon  v.    Heidman,   66 
Iowa,    645,    (1885),   holds  personal 
representatives  proper  parties  if  a 
judgment  for  deficiency  is  desired  ; 
Brenner  v.  Bigelow,  8  Kan.  496,  504 
(1871). 

^  Anderson  v.  Austin,  34  Barb. 
(N.  Y.)  319  (1861) ;  Cole  v.  Moffitt, 
20  Barb.  (N.  Y.)  18  (1854) ;  Hornby 
V.  Cramer,  12  How.  (N.  Y.)  Pr.  490 
(1855)  ;  Low  v.  Purdy,  2  Lans.  (N. 
Y.)  424  (1869);  2  N.  Y.  Eev.  Stat.  545; 
Laws  of  1844,  chap.  346;  N.  Y. 
Code  Civ.  Proc.  S  2388.  subdiv.  4. 

*  Mackenzie  v.  Alster,  64  How.  (N. 
Y.)  Pr.  388  (1882) ;  s.  c.  12  Abb.  (N. 


Y.)  N.  C.  110.  Boardman,  J., 
queries  in  VanSchaack,  v.  Sanders, 
32  Hun  (N.  Y.)  515  (1884),  s.  c.  19 
N.  Y.  Week.  Dig.  170,  whether 
service  on  a  devisee  is  not  sufficient 
where  the  executors  have  not  quali- 
fied. 

*Bard  v.  Poole,  12  N.  Y.  495 
(1855)  ;  Case  v.  Price,  9  Abb.  (N.  Y.) 
Pr.  Ill  (1859) ;  Christie  v.  Herrick, 
1  Barb.  Ch.  (N.  Y.)  254  (1845)  ;  Leg- 
gett  V.  Mutual  Life  Ins.  Co. ,  64  Barb. 
(N.  Y.)38  (1872);  Toole  v.  McKiernan, 
48  N.  Y.  Super.  Ct.  (16  J.  &  S.)  163 
(1882)  ;  Grant  v.  Duane,  9  Johns.  (N. 
Y.)  591  (1812) ;  Nodine  v.  Greenfield, 
7  Paige  Ch.  (N.  Y.)  547  (1839);  Patou 
v.  Murray,  6  Paige  Ch.  (N.  Y.)  474 
(1837)  ;  King  v.  McVicker,  3  Sandf. 
Ch.  (N.  Y.)  192  (1846) ;  Williamson 
V.  Field's  Ex'rs,  2  Sandf.  Ch.  (N. 
Y.)  533,  563  (1845) ;  Wilson  v.  Russ, 
17  Fla.  691   (1880) ;  C.  &  G.  W.  R. 


§  147.]    TRUSTEES  AND  BENEFICIARIES  NECESSARY.  173 

state  the  reason  for  this  principle,  it  is  believed  that  it  is 
based  upon  the  fact  that  all  trustees  are  held  accountable 
by  the  courts  for  the  performance  of  their  trusts,  and  that 
without  being  made  parties  they  would  have  no  opportunity 
to  be  heard  in  an  action  afTecting  the  subject  of  their  trust. 
Even  if  the  trust  were  not  coupled  with  an  interest, 
there  might  be  latent  equities  or  hidden  rights  which 
would  impair  the  title  offered  at  a  foreclosure  sale,  if  the 
trustee  were  omitted  as  a  party  defendant.  It  is  specially 
necessary,  and,  in  fact,  indispensable,  to  make  a  trustee  of 
an  express  trust,  or  one  who  has  an  interest  coupled  with  a 
trust,  a  party.*  Trusts  created  by  wills  are  so  various  in 
character  and  often  approach  so  near  a  mere  power,  that 
each  case  must  be  judged  by  itself  as  it  arises  ;  and  this  is 
notably  true,  when  it  is  remembered  that  the  common-law 
theory  of  trusts  and  the  statutory  enactments  of  the  various 
states  respecting  them  are  so  complicated  and  intricate.' 
The  trustee  must  be  made  a  party  in  his  reprensentative, 
and  not  in  his  individual,  capacity.' 

§  147.  Cestuis  que  trust  and  beneficiaries — When 
necessary. — The  decisions  of  the  courts  and  the  statutes  of 
this  state  have  long  established  the  dictum,  that  the  cestuis 
que  trust  and  beneficiaries  of  a  trust  are  necessary  defendants 
to  a  foreclosure,  in  order  to  cut  off  the  entire  equity  of 
redemption.*     Judge  Story  says :    "  It  will  not  in  general  be 


Land  Co.  v.  Peck,  112  111.  408,  435  when  no  estate,  legal  or  equitable, 

(1885) ;  Walsh  v.  Truesdale,    1   111.  vested  in  the  trustee,  he  was  not  a 

App.  126  (1877)  ;  Clark  v.  Reyburn,  necessary  party  ;    aliter    when  the 

75U.  8.  (8WaU.)318(1868);  bk.  19  trustee    takes    any    interest    in  the 

L.    ed.  354  ;  Fisher  on  Mortgages,  property.     See    the  cases  cited  w- 

§§  365,  367 ;  Wilton  v.  Jones,  2  Y,  pra. 

&  C.  C.  C.  244  (1843).     The  heirs  at  «  Nodine  v.  Greenfield,  7  Paige  Ch. 

law  of  a  trustee  are  not  necessary  (N.  Y.)  547  (1839). 

parties  ;    N.   &  C.    Bridge    Co.   v.  ^  Rathbone  v.  Hooney,  58  N.    Y. 

Douglass,  12  Bush.  (Ky.)  719  (1877).  463(1874). 

See  Gardner  v.  Brown,  88  U.  S.  (21  *  Leggett  v.  Mutual  L.  I.  Co.,  64 

Wall.  36  (1874)  ;  bk.  22  L.  ed.  527,  Barb.  (N.  Y.)  23,  36  (1872):  reversed 

where    a    trustee    had    not  filed  a  in  part  in  53  N.Y.  400(1873);  Case  v. 

required  bond.  Price,  17  How.  (N.Y.)  Pr.  348(1859); 

1  In  Case  V.  Price,    17  How.   (N.  Toole  v.  McKiernan,  48  N.Y.  Super, 

Y.)  Pr.  348  (1859),  it  was  held  that  Ct.  (16  J.  &  S.)  163  (1882) ;  Terrett  v. 


174  CESTUIS  QUE  TEUST WHEN  NECESSARY.       [§  147. 


sufficient  if  the  equity  of  redemption  is  conveyed  or  devised 
to  a  trustee  in  trust,  to  bring  him  before  the  court ;  but  the 
cestuis  que  trust  (the  beneficiaries)  should  also  be  made 
parties.'"  "  It  is  conceded  to  be  the  general  rule,  that  if  the 
equity  of  redemption  is  vested  in  a  trustee  in  trust,  the  cestuis 
que  trust  must  be  made  parties  to  the  foreclosure."* 

And  even  where  the  receipt  of  trustees  was  to  be  sufficient 
to  discharge  purchasers  from  all  liability  to  the  beneficiaries, 
the  equity  of  redemption  having  been  conveyed  to  trustees 
to  sell  and  divide  among  certain  specified  persons,  the  cestuis 
que  trust  were  held  necessary  parties  to  a  bill  brought  to 
foreclose  the  mortgage.'  The  nature  of  the  trust  should 
appear  on  the  face  of  the  instrument  creating  it.  Where 
the  conveyance  does  not  reveal  the  fact  that  it  is  a  trust 
deed,  together  with  the  names  of  the  beneficiaries,  the  fore- 
closure will  produce  a  perfect  title,  and   the  rights  of  the 


Crombie,  6  Lans.  (N.  T.)  82  (1872) ; 
modified  in  55  N.  Y.  683;  Nodiue  v. 
Greenfield,  7  Paige  Ch.  (N.  Y.)  544 
(1839)  ;  King  v.  McVickar,  3  Sandf. 
Ch.  (N.  Y.)  192  (1846) ;  Williamson 
V.  Field,  2  Sandf.  Ch.  (N.  Y.)  562 
(1845).  See  Dodd  v.  Neilson,  90  N. 
Y.  243,  247  (1882).  In  Lockman  v. 
Reilley,  10  Abb.  (N.  Y.)  N.  C.  351 
(1881),  certain  beneficiaries  were  held 
imnecessary  parties  ;  but  in  that  case 
the  equity  of  redemption  had  been 
changed  into  personalty  by  the 
terms  of  a  will.  Woolner  v.  Wilson, 
5  ni.  App.  439  (1880);  Day  v. 
Wetherby,  29  Wis.  363  (1872) ;  Clark 
V.  Reyburn,  75  U.  S.  (8  Wall.)  318 
(1868) ;  bk.  19  L.  ed.  354.  See 
Broward  v.  Hoeg,  15  Fla.  370  (1875), 
for  a  case  where  alleged  beneficiaries 
were  held  not  necessary  parties.  In 
Johnson  v.  Robertson,  31  Md.  476 
(18G9),  the  cestui  que  trust,  bein^  a 
non-resident,  was  held  an  unnecessary 
party  ;  her  interests  were  held  bound 
by  a  decree  taken  pro  confesso  against 
her  trustee.    In  Wood  v.  Nisbit,  20 


Ga.  72  (1856),  the  premises  were 
conveyed  to  a  person  as  trustee,  who 
executed  a  purchase  money  mort- 
gage as  trustee  ;  the  cestui  que  trust 
was  held  not  a  necessary  party. 
Contrary  to  the  text,  see  Fisher  on 
Mortgages,  §  367  et  seq.,  and  the 
English  cases,  Hanman  v.  Riley,  9 
Hare  Append.  40  (1852);  Goldsmid  v. 
Stonehewer,  9  Hare  Append.  39  ; 
8.  c.  17  Jur.  199(1852);  Sale  v.  Kitson, 
17  Jut.  171;  s.  c.  3DeG.,  M.  &G.  119 
(1853);  Tuder  v.  Morris,  1  Sm.  & 
Gif  603(1853);  Cropper  v.  MeUersh, 
1  Jut.  N.  S.  299  (1855).  See  Coles 
V.  Forrest.  10  Beav.  557  (1847). 

>  Story's  Eq.  PL  §§  193,  197. 

^  W  illiamson  v.  Field,  2  Sandf. 
Ch.  (N.  Y.)  562  (1845).  a  leading 
case,  per  Vice-Chancellor  Sandford. 
All  the  books  agree  in  sustaining  this 
proposition.  Gore  v.  Stacpoole,  1 
Dow's  P.  C.  18,  31  (1813),  per  Lord 
Eldon ;  Story's  Eq.  PI.  §§  198,  194, 
207.    Calvert  on  Parties,  181,  182. 

»  Calverley  v.  Phelp,  6  Madd.  229 
(1822). 


§  148.]  CESTUIS  QUE  TRUST WIIEN  NOT  NECESSAET.       175 

cestuis  que  trust  will  be  cut  off,  though  they  are  not  made 
parties  to  the  action.* 

§  148.    Cestuis  que  trust — When  not  necessary.— As 

far  as  the  reported  cases  show,  there  are  only  two  exceptions 
to  the  general  rule  above  stated.  First,  "  in  cases  of  remote 
limitation  of  the  equity  of  redemption,  in  which,  on  account 
of  the  impossibilty  of  bringing  in  parties  not  in  esse,  or  not 
ascertained,  but  who  may  ultimately  become  entitled,  it  is 
held  sufficient  to  bring  before  the  court  the  persons  in  esse 
who  have  the  first  estate  of  inheritance,  together  with  the 
persons  having  all  the  precedent  estates  and  prior  interests."* 
But  where  a  mortgagor  conveyed  his  equity  of  redemption 
to  trustees  in  settlement  for  his  daughter  on  her  marriage, 
out  of  which  she  was  to  receive  an  annuity,  and  the  trustees 
were  to  raise  out  of  the  same  a  sum  of  money  for  the 
children  of  the  marriage,  the  daughter  and  her  children  were 
deemed  necessary  parties  to  a  suit  for  the  foreclosure  of  the 
mortgage.' 

Second,  in  cases  where  the  beneficiaries  are  so  numerous 
that  it  would  be  intolerably  oppressive  to  compel  the 
plaintiff  to  bring  them  all  into  the  action,  it  is  held  sufficient 
to  make  the  trustees  defendants.*  Thus,  in  a  case  where 
real  estate  had  been  purchased  by  a  joint  fund  raised  by 
subscriptions  from  above  two  hundred  and  fifty  subscribers, 
and  the  property  was  conveyed  to  A.,  B.  and  C.  as  trustees, 
who  executed  a  purchase  money  mortgage,  Chancellor  Kent 


>  Johnston  v.  Donvan,   106  N.  Y.  *  Christie  v.  Herrick,  1  Barb.  Ch. 

269  (1887) ;   Brown  v.   Cherry,   38  (N.  T.)  254  (1845) ;  VanVechten  v. 

How.  (N.  Y.)  Pr.  352  (1870) ;  s.  c.  56  Terry,  2  Johns.   Ch.   (N.   Y.)  197 

Barb.  (N.  Y.)  635;  Young  v.  Whit-  (1816);  Paton  v.  Murray,  6  Paige  Ch. 

ney,  18  Fla.  54  (1881).  (N.  Y.)  474  (1837).     See  C.  &  G.  W. 

» Williamson  v.   Field,  2  Sandf.  R.  Land  Co.  v.  Peck,  112  Bl.  408, 

Ch.   (N.   Y.)  562    (1845).      Special  435   (1885),    citing  VanVechten   v. 

attention  is  called  to  this  case  for  its  Terry,  2   Johns.   Ch.   (N.  Y.)  197 

learned  and  exhaustive  discussion  of  (1816),  and  discussing  this  principle 

the  relation  of  trustees  to  their  cestuia  at  length  ;  Swift  v.  Stebbins,  4  Stew. 

que  trust,  in  cases  of  mortgage  fore-  &  Port.  (Ala.)  447  (1833) ;  Willis  v. 

closure.  Henderson,  5  Bl.  (4  Scam.)  13  (1842); 

*  Anderson  v.   Stather,   16  L,  J.  N.  Y.  Franklinite  Co.  v.  Ames,  12 

(Eq.)  N.  S.   152  (1845),  before  Sir  N.  J.  Eq.  (1  Beas.)  507  (1859). 
Knight  Bruce,*  Vice-Chancellor. 


176  OESTUIS    QUE   TRUST   AS   DEFENDANTS.         [§  149. 

held  on  the  foreclosure  that  "  the  trustees  were  selected  in 
this  case  to  hold  and  represent  the  property  for  the  sake  of 
convenience,  and  because  the  subscribers  were  too  numerous 
to  hold  and  manage  the  property  as  a  co-partnership.  The 
trustees  are  sufficient  for  the  purpose  of  this  bill,  which  is 
for  a  sale  of  the  pledge ;  it  would  be  intolerably  oppressive 
and  burdensome,  to  compel  the  plaintiff  to  bring  in  all  of  the 
cestiiis  que  trust.  The  delay  and  the  expense  incident  to  such 
a  proceeding  would  be  a  reflection  on  the  justice  of  the  court. 
This  is  one  of  those  cases  in  which  the  general  rule  can  not, 
and  need  not,  be  enforced ;  for  the  trustees  sufficiently 
represent  all  the  interests  concerned ;  they  were  selected  for 
that  purpose,  and  we  need  not  look  beyond  them.'"  Where 
a  trust  is  created  for  the  benefit  of  numerous  creditors,  the 
same  explanation  holds  good,  and  the  creditors  are  not 
necessary  parties,  but  may  be  safely  represented  by  the 
trustees  ;"  but  the  beneficiaries  may  properly  be  made  defen- 
dants, if  the  plaintiff  desires  to  bring  them  into  the  action,' 

§  149.  Statutes  making  cestuis  que  trust  necessary. 
— The  statutes  of  many  states  are  clear  in  declaring  that  in 
cases  of  trusts  made  to  one  or  more  persons  for  the  use  of 
others,  no  estate  or  interest,  legal  or  equitable,  shall  vest  in 
the  trustee ;  but  that  every  beneficiary  who  by  virtue  of  a 
trust  is  entitled  to  the  actual  possession  of  lands  and  the 
profits  thereof,  shall  be  deemed  to  have  a  legal  estate  therein, 
according  to  his  beneficiary  interest.*      No  court  has  ever 


'  VanVechten  v.  Terry,  3  Johns.  Smart  v.   Bradstock,   7  Beav.   500 

Ch.  (N.  Y.)  197  (1816).  (1844) ;  Powell  v.  Wright,  7  Beav. 

»  Grant  v.  Duane,  9  Johns.  (N.  Y.)  444  (1844) ;  Law  v.  Bagwell,  4  Dru. 
591  (1812).     See  the  clear  opinion  of  .  «&  War.  406  ;  Doody  v.  Higgins,  9 

Caton,  J.,  in  Willis  V.  Henderson,  5  Hare  Append.    32  (1852);   Gore  v. 

111.  (4  Scam.)  13,  20  (1842) ;  Fisher  Harris,  15  Jur.  761  (1850);  Wallwyn 

on  Mortgages,  §  374.     For  the  Eng-  v.  Coutts,  3  Mer.  707  (1815) ;  Garrard 

lish  cases,  see  Thomas  v.  Dunning,  v.  Lord  Louderdale,  3  Sim.  1  (1839). 

5  DeG.  &  S.  618  (1852) ;  Newton  v.  s  Union  Bank  v.  Bell,  14  Ohio  St. 

Earl  of  Egmont,  4  Sim.  574  (1831) ;  200  (1862). 

Troughton  v.    Binkes,   6  Ves.    573  M  N.  Y.  Rev.  Stat.  728,  §§  47,  49. 

(1801).    A  few  creditors  may  repre-  Kawson  v.  Lampman,  5  N.  Y.  456 

sent    the    remainder ;     Holland     v.  (1851). 
Baker,  3  Hare,  68  (1842),    See  also 


§  150.J         REJVIAINDEEMEN    AND    EEVEESIONEES.  177 

held,  SO  far  as  can  be  ascertained,  that  a  cestui  que  trust  may 
be  omitted  as  a  party  to  a  foreclosure,  except  in  the  two 
cases  already  mentioned.'  Even  where  a  trustee  executed 
the  mortgage  under  authority  of  a  court,  it  was  held  that  the 
beneficiaries  were  necessary  parties ;'  the  same  would  hold 
true  if  the  mortgage  were  executed  by  a  trustee  under 
authority  contained  in  a  will  or  other  instrument.* 

The  general  rule  of  law  of  this  section  is  undoubtedly 
founded  on  the  broad  principle,  that  all  persons  having  an 
interest  in  the  equity  of  redemption  should  be  made  parties, 
and  that  none  of  them  will  be  concluded  as  to  their  rights 
unless  they  are  brought  into  the  action  so  that  the  court 
acquires  jurisdiction  of  them.  Although  the  trustee  has  a 
quasi  interest  in  the  premises,  the  beneficiaries  are,  never- 
theless, the  actual  parties  in  interest,  owning  as  they  do  the 
equitable,  if  not  the  legal,  title  to  the  premises. 

§  150.    Remaindermen  and  reversioners  necessary. — 

All  persons  having  a  vested  estate  of  inheritance  in  remainder 
or  reversion  in  mortgaged  premises,  must  be  brought  into 
court  in  an  action  to  foreclose  a  mortgage ;  but  where  there 
are  several  future  and  contingent  interests  in  the  equity  of 
redemption  in  mortgaged  premises,  it  is  not  necessary 
generally  to  make  every  person  having  a  future  and  contin- 
gent interest  a  party  to  a  bill  of  foreclosure.  It  seems 
sufficient,  if  the  person  who  has  the  first  vested  estate  of 
inheritance,  and  the  several  intermediate  remaindermen  and 
persons  having  or  claiming  rights  or  interests  in  the  premises 
prior  to  the  vested  estates,  are  brought  before  the  court.* 


•  See  ante  §  146,  and  the  notes,  for  (1833);  Nodine  v.  Greenfield,  7  Paige 
special  instances.  Ch.  (N.  Y.)  544  (1839) ;  Williamson 

»  Williamson  v.   Field,  2  Sandf.  v.  Field,  2  Sandf.  Ch.  (N.  Y.)  533, 

Ch.  (N.  Y.)  533  (1845).  563  (1845).    See  Lockman  v.  Reilley, 

«  Albany  Fire  Ins.  Co.  v.  Bay,  4  95  N.  Y.  64  (1884) ;  s.  c.  10  Abb. 

N.  Y.  9,  19  (1850).  (N.  Y.)  N.  C.  351,  where  questions 

*  Brevoort  v.  Brevoort,  70  N.  Y.  affecting  the  interpretation  of  a  will 
136  (1877) ;  Rathbone  v.  Hooney,  58  were  also  involved.  See  Iowa  Loan 
N.  Y.  463  (1874) ;  Leggett  v.  Mutual  &  Trust  Co.  v.  King,  58  Iowa,  598 
Life  Ins.  Co.,  64  Barb.  (N.  Y.)  23,  (1882),  See  Breit  v.  Yeaton,  101 
36  (1872);  Eagle  F.  Ins.  Co.  v.  111.  242  (1882),  an  action  for  partition. 
Cammet,  2  Edw.  Ch.  (N.  Y.)  127  For    the    English    authorities,   see 

(13) 


178  EEMAINDERIklEN    AS    DEFENDANTS.  [§151, 

It  is  clear  equitable  law  that  in  order  to  make  a  foreclosure 
valid  as  against  all  claimants,  he  who  has  the  first  estate  of 
inheritance  must  be  brought  before  the  court ;  and  even 
then  the  intermediate  remaindermen  for  life  ought  also  to  be 
brought  before  the  court,  to  give  them  an  opportunity  to 
pay  off  the  mortgage  if  they  desire.'  In  a  case  where 
mortgaged  premises  were  bequeathed  by  a  mortgagor  to 
his  wife  for  life  with  remainder  in  fee  to  the  children  of  his 
brother,  who  should  be  living  at  the  time  of  her  death,  and 
to  the  issue  of  such  of  the  children  as  should  then  have  died 
leaving  issue,  with  the  power  to  his  executors  to  sell  his  real 
estate  and  invest  the  proceeds  for  the  benefit  of  the  devisees, 
the  court  decided  that  the  children  of  the  brother,  who  were 
in  esse  at  the  death  of  the  testator,  took  vested  remainders 
in  fee,  subject  to  open  and  let  in  after-born  children,  and 
subject  also  to  be  divested  by  death  during  the  continuance 
of  the  life  estate  of  the  widow,  or  to  be  defeated  by  the 
execution  of  the  power  of  sale  given  to  the  executors  by 
the  will ;  and  that  accordingly  the  children  of  the  brother 
who  were  in  esse  at  the  time  of  filing  the  bill,  ought  to  have 
been  made  parties  to  the  foreclosure,  and  that  their  equity 
of  redemption  was  not  barred  by  a  decree  in  a  suit  in  which 
the  widow,  the  executors  and  the  heirs  at  law  alone  were 
made  parties." 

§  151.    A  defendant  in  esse  necessary. — All  the  courjts 

are  agreed  in  cases  involving  these  questions,  that  there  must 
be  a  defendant  who  is  a  person  in  esse*  and  who  holds  a 


Fisher  on  Mortgages,  §309  et  seq.;  'Gore  v.   Stacpoole,  1  Dow.  31 

Lloyd  V.  Johnson,  9  Ves.  37  (1802) ;  ( 1813 ) ;    opinion    rendered   in   the 

GifEord  v.  Hort,  1  Sch.  &  Lef  386,  House  of  Lords,  per  Lord  Chancellor 

408  (1804);    Yates   v.    Hambly,  2  Eldon. 

Atk.   237  (1741);  Sutton  v.  Stone,  « Nodine  v.   Greenfield,   7  Paige 

2  Atk.  101  (1740) ;  Hopkins  v.  Hop-  Ch.   (N.  Y.)  544  (1889).  a  leading 

kins,    1    Atk.    581,    590    (1738);  case,  per  Chancellor  Walworth,  cit- 

Roscarrick  v.  Barton,  1  Ch.  Cas.  218  ing  and    quoting   Lord   Eldon,  in 

(1671) ;    Flsliwick  v.  Lowe,  1   Cox  Gore  v.  Stacpoole,  1  Dow.  31  (1813). 

Cas.  in  Eq.  411  (1787) ;  Choppell  v.  »  See  Clark  v.  Reybum,  75  U.  S. 

Rees,  1  DeG.,  M.  &  G.  393  (1852)  ;  (8  Wall.)  318  (1868)  ;  bk.  19  L.  ed. 

Gore  V.   Stacpoole,  1  Dow.  18,   31  354,  where  mortgaged  premises  had 

( 1813 ) ;   Cholniondeley  v.    Clinton,  been  conveyed  in  trust  for  the  benefit 

S  Jac.  &  W.  133  (1820).  of  children  bom  and  to  be  born  ;  all 


§152.]  A    DEFENDANT   m   ESSE   NECESSAEY.  179 

vested  estate  of  inheritance  ;  and  they  are  further  agreed, 
that  all  persons  having  estates  and  interests  prior  or  superior 
thereto,  must  be  defendants.*  As  Vice-Chancellor  McCoun 
says,  "  A  decree  against  the  party  having  the  estate  of 
inheritance  will  bind  those  in  remainder  or  who  in  any  way 
come  afterwards  ;  there  must  be  a  clear  tenancy  in  tail  to 
dispense  with  the  necessity  of  a  remainderman  being  a  party 
to  a  bill  of  foreclosure.  If  there  be  an  express  estate  for 
life,  and  it  is  doubtful  whether  the  same  person  is  also  ten- 
ant in  tail,  the  remainderman  who  has  the  first  estate  of 
inheritance  ought  to  be  a  party."*  Though  the  cases  are 
uniform  in  using  the  term,  "  the  first  estate  of  inheritance," 
it  would  certainly  be  advisable  to  make  even  the  remotest 
remainderman  or  reversioner,  if  he  is  tn  esse,  also  a  party ; 
it  will  avoid  the  raising  of  any  question  by  him  upon  the 
determination  or  failure  of  the  intermediate  estate. 

§  152.     Assignee    in    bankruptcy     or    by    voluntary 
general    assignment,     and    receiver,     necessary.  —  An 

assignee  in  bankruptcy,  under  the  former  national  bankrupt 
act,  or  by  voluntary  general  assignment  under  the  statutes 
of  the  several  states,  of  the  owner  of  the  equity  of  redemp- 
tion in  mortgaged  premises,  is  a  necessary  defendant'  to  a. 


the  children  in  esse  at  the  time  of  second  marriage  or  death  ;  then  to- 

tiling  the  bill  of  foreclosure  were  his  daughter  Mary,  as  long  as  she 

held  necessary  parties.    See  the  cases  should  live  ;  and  if  she  should  have 

cited  in  the  preceding  section.  no  heirs  at  her  death,  then  to  the 

'  English  authorities  :  Fisher  on  children  of  J.  0.  It  was  held  that 
Mortgages,  §§  311,  315.  A  tenant  the  daughter  Mary  had  only  a  Ufe 
for  life  is  necessary  ;  Reynoldson  v.  estate,  and  that  on  a  bill  of  fore- 
Perkins,  Ambl.  564  (1769).  See  closure  the  children  of  J.  C.  ought 
Handcock  v.  Shaen,  Coll.  P.  C.  122  to  have  been  made  parties.  "  The 
(1701),  holding  that  intermediate  first  tenant  in  tail,"  says  Lord  Cam- 
remaindermen  are  necessary.  See  den,  "is  sufficient ;  he  sustains  the 
Chappell  V.  Rees,  1  DeG.,  M.  6s  interests  of  everybody ;  thus  any 
G.  393  (1852) ;  Gore  v.  Stacpoole,  1  remaindermen  are  considered  ciph- 
Dow.  31  (1813).  ers."  Reynoldson  v.  Perkins,  Ambl. 

«  Eagle  Fire  Ins.  Co.  v.  Cammet,  564  (1769). 

2  Edw.  Ch.  (N.  Y.)  127  (1833).     In  »  Lenihan  v.  Hamann,  55  N.  T. 

this  case  M.  C.  mortgaged  real  estate  652  (1873) ;  Bard  v.  Poole,  12  N.  Y. 

and  died  after  making  his  will,  by  507  (1855),  a  case  of  voluntary  assign- 

which  he  gave  all  his  real  and  per-  ment ;    Cleveland    v.    Boerum,    23 

eoual   estate   to    his   widow    until  Barb.  (N.  Y.)  205  (1856) ;   afl'd  24 


180  ASSIGNEE    IN    BANKRUPTCY.  [§  152. 

foreclosure,  if  the  petition  in  bankruptcy  or  the  voluntary 
assignment  was  made  before  the  commencement  of  the 
action  to  foreclose  ;  so  also  the  receiver  of  an  insolvent  cor- 
poration is  a  necessary  defendant.'  If  an  action  is  brought 
by  the  Attorney-General  in  the  name  of  the  People  for  the 
dissolution  of  an  insolvent  corporation  and  the  appointment 
of  a  receiver,  the  People  and  the  receiver  are  not  necessary, 
though  proper,  defendants  to  the  foreclosure  of  a  valid 
existing  mortgage." 

This  rule  follows  in  analogy  the  broader  principle  of  law 
%vhich  makes  the  owner  of  the  equity  of  redemption  always  a 
necessary  party  to  a  foreclosure.'  The  assignee  succeeds  by 
the  assignment  to  all  the  rights  of  the  assignor,  and  becomes 
the  owner  of  the  equity.  It  must  be  carefully  noticed,  that 
to  make  the  assignee  a  necessary  party,  the  assignment  must 
be  made  while  the  assignor  owns  the  equity  of  redemption 
and  before  the  commencement  of  the  action  to  foreclose. 
The  assignor  is  not  a  necessary  party  after  the  assignment  ;* 
he  may,  however,  properly  be  made  a  defendant ;'  neither 
are  his  general  creditors  necessary  or  proper  parties/ 


N.  Y.  613  (1862) ;  Wagner  v  Hodge,  was  by  an  equitable  action,  but  not 

34  Hun  (N.  Y.)  524  (1885),  a  case  of  if  it  were  conducted  by  scire  facias. 

voluntary  assignment,  in  which  the  King  v.  Bowman,  24  La.  An.  506 

defendant    assignee  was    described  (1872)  ;  Moors  v.  Albro,  129  Mass.  9 

merely  in  his  individual  capacity  and  (1880)  ;    Freeland  v.   Freeland,   103 

not  as  assignee  ;  it  was  held  that  he  Mass.  475  (1869) ;  Thorpe  v.  Ricks, 

was  properly  and  sufficiently  made  a  1  Dev.  &  B.  (N.  C.)  Eq.  619,  620 

defendant ;  followed  in  Landon  v.  (1837)  ;  Dwyer  v.  Garlough,  31  Ohio 

Townshend,   44  Hun  ( N.  Y. )  561  St.  158  (1877) ;  Stafford  v.  Adair,  57 

(1887);  Spring  v.  Short,  90  N.  Y.  538,  Vt.  63  (1885) ;  Fisher  on  Mortgages, 

545  (1882) :  Winslow  v.  Clark,  47  N.  §  308. 

Y.  261,  263  (1872)  ;  Burnham  v.  De  '  Raynor  v.  Selmes,  52  N.  Y.  579 

Bevors'e.S  How.(N.  Y.)  Pr.  159 (1853);  (1873),  reversing  7  Lans.  (N.  Y.)  440. 

Harris  v.  Cornell,  80  111.  54  (1875)  ;  See  Herring  v.  K  Y.,  L.  E.  ife  W. 

Stimpson   v.    Pease,    53   Iowa,   573  R.  Co.,  105  N.  Y.  340,  371  (1887). 
(1880);    Eyster  v.    Gaff,   91    U.    S.  «  Herring  v.  N.Y.,  L.  E.  &  W,  R. 

(1  Otto),  521  (1875) ;  bk.  23  L.  ed.  Co.,  105  N.  Y.  341,  371  (1887). 
403  ;  Gardner  v.    Brown,  88  U.  S.  »  See  ante  %%  117,  126,  137. 

(21  Wall.)  36  (1874) ;   bk.  22  L.  ed.  *  Rochfort  v,  Battersby,  14  Jur. 

527.     In  Chickering  v.    Failes,   26  229(1849);  Lloyd  v.  Lander,  5  Madd. 

111.  507  (1861),  the  assignee  was  held  282(1831);  Collins  v.  Shirley.  1  Russ 

a  necessary  party  if  the  foreclosure  &  M.  638  (1830)  ;  Kerrick  v.  Saffery, 


§153.]  BANKRUPTCY    PEiNDENTE   LITE.  181 

§  153.  Assignee  in  bankruptcy  pendente  lite  not 
necessary. — Among  the  early  decisions  in  New  York,'  it  was 
held  tliat  if  an  assignment  were  made  during  the  pendency 
of  an  action  to  foreclose;  the  decree  of  sale  would  be  void  as 
against  the  assignee,  unless  he  were  brought  in  as  a  party. 
The  later  decisions  in  all  the  courts  of  the  country,  however, 
are  uniform  in  applying  to  assignees  in  bankruptcy  the 
general  rule  previously  stated,  that  purchasers  pendente  lite 
are  not  necessary  parties.*  Justice  Miller  held,  in  the 
Supreme  Court  of  the  United  States,*  that  where  an  as- 
signee in  bankruptcy  of  a  mortgagor  is  appointed  during  the 
pendency  of  a  foreclosure  of  the  mortgaged  premises,  he 
stands  as  any  other  purchaser  would  stand,  on  whom  the 
title  had  fallen  after  the  com.mencement  of  the  suit.  If  there 
is  any  reason  for  interposing,  the  assignee  should  be  substi- 
tuted for  the  bankrupt  or  be  made  a  defendant  on  petition. 

Justice  Allen,  in  deciding  the  same  question  in  the 
New  York  Court  of  Appeals,*  in  1873,  held  substantially 
the  same  ruling,  and  further  that  such  a  foreclosure  might 
be  restrained  by  injunction  by  a  United  States  court  in 
bankruptcy,  but  that,  if  allowed  to  proceed,  the  purchaser  at 
the  sale  would  acquire  a  good  title  as  against  the  mortgagor 
or  owner  of  the  equity  of  redemption  and  against  all  parties 
claiming  under  them,  including  an  assignee  in  bankruptcy. 
An  exhaustive  discussion  of  the  question  decided  in  these 
cases  was  given  by  Justice  Strong  in  Cleveland  v.  Boerum.* 
Indeed,  this  was  the  earliest  case  to  sustain  the  proposition 
of  this  section  ;  it  collates  and  reviews  all  the  previous  cases. 


7  Sim.  317  (1835);  Fisher  on  Mort-      Ch.   (N.    Y.)  360  (1848J;    Burr  v. 
306.  Burr,  10  Paige  Ch.  (N.  Y.)  20  (1842); 


6  Franklyn    v.   Fern,   Bam.    Ch.  Sedgwick  v.  Cleveland,  7  Paige  Ch. 

(folio)  30,  33  (1740) ;    Singleton  v.  (N.  Y.)  290,  291  (1838). 

Cox,  4  Hare,   326  (1845) ;  Rafferty  «  See  ante  §  130.      See  the  cases 

V.  King,  1  Keen  619(1836);  Collins  v.  cited  in  the  preceding  section. 

Shirley,  1    Russ.  &  M.  638  (1830) ;  ^  Eyster  v.  Gaff,  91  U.  S.  (1  Otto), 

cited  in  9  Sim.  399;  Fades  v.  Harris,  521  (1875)  ;  bk.  23  L.  ed.  403. 

lY.&C.  234(1842);  Fisher  on  Mort-  ^  Lenihan  v.  Hamann,  55  K  Y. 

gages,  §  307.  652  (1873). 

•  Spring  V.  Short,  90  N.  Y.  538  ^  23  Barb.  (N.  Y.)   202 ;  afi'd  24 

(1882).  N.  Y.  613  (1862). 

'  Johnson  v,    Fitzhugh,    3  Barb. 


182  INFANTS,    INCOMPETENTS,    DEFENDANTS.       [§  154. 

The  error  of  the  early  decisions  was  due  to  the  distinction 
made  by  the  courts,  between  transfers  made  pendente  litehy 
the  voluntary  act  of  the  assignor  and  those  accomplished 
by  operation  of  law. 

§  154.  Infants,  lunatics,  idiots  and  habitual  drunkards 
necessary  parties. — Provision  has  been  made  in  the  statutes 
of  most  of  the  states  for  a  proceeding  to  dispose  of  the  real 
property  of  infants,  lunatics,  idiots  and  habitual  drunkards 
by  sale,  mortgage  or  lease.  Prior  to  these  statutes,  there 
was  a  proceeding  in  the  common-law  practice  to  accomplish 
the  same  purpose.  Where  a  mortgage  has  been  executed 
by  a  guardian  or  a  committee  of  an  incompetent  person, 
pursuant  to  an  order  of  a  court,  the  infant,  lunatic,  idiot  or 
habitual  drunkard,  as  the  case  may  be,  is  a  necessary 
defendant  in  an  action  to  foreclose  the  mortgage.'  Some 
of  the  states  declare  the  effect  of  such  conveyances.  The 
New  York  Code  of  Civil  Procedure  declares  that  such  a 
mortgage  "  has  the  same  validity  and  effect  as  if  it  was 
executed  by  the  person  in  whose  behalf  it  was  executed, 
and  as  if  the  infant  was  of  full  age,  or  the  lunatic,  idiot  or 
habitual  drunkard  was  of  sound  mind  and  competent  to 
manage  his  own  affairs.'"     A  mortgage  executed  under  such 


1  Prentiss  v.  Cornell,  31  Hun  (N.  an  action  to  redeem,  was  obliged  to 

Y.)  167  (1883).     See  Argricultural  make  both  the  infant  and  his  guar- 

Ins.  Co.  V.  Barnard,  96  N.  Y.  525  dian  parties  to  the  action.     In  would 

(1884),  holding  also  that  a  bond  is  seem  that  in  Illinois  an  infant  is  not 

not  necessary  with  such  a  mortgage,  a  necessary  party  in  any  legal  pro- 

but  that  it  is  discretionary  with  the  ceedings  where  he  has  a  guardian  to 

court  to  require  it.     See  Lyon  v.  represent  his  interests ;  Campbell  v. 

Lyon,  67  N.  Y.  250  (1876) ;  McManis  Harmon,  43  111.  18  (1867) ;  Merritt 

V.  Rice,  48  Iowa,  361  (1878).     In  v.  Simpson,  41  111.  391  (1866).    In 

Eslava  v.   LePretre,    21    Ala.    504  Boston    Bank    v.   Chamberlain,   15 

(1852),  the  committee  of  a  lunatic,  Mass.  220  (1818),  an  infant  had  exe- 

who  had  been  irregularly  appointed,  cuted  a  mortgage ;    after   reaching 

executed  a  mortgage  jointly  with  his  majority  he  conveyed  the  prem- 

her    husband  ;    on    foreclosure    the  ises  subject  to  the  mortgage.     In  an 

lunatic  was  held  a  necessary  party,  action  to  foreclose,  infancy  at  the 

owing  to  the  defect  in  the  appoint-  time  of  executing  the  mortgage  was 

ment.     In  Parker    v.    Lincoln,    12  pleaded  in  defense,  but  held  no  bar 

!Mass.   16    (1815),   a    mortgage  was  to  its  validity. 
executed  to  an  infant  who  had  a         **  N.  Y.  Code  Civ.  Proc.  §  2358 ; 

guardian  ;  the  mortgagor,  bringing  Valentine    v.   HafE,   73  N.   Y.   184 


§  155.J  I^UNATICS    AUB    IDIOTS   DEFENDANTS.  183 

a  proceeding  does  not  bind  a  wife's  inchoate  right  of  dower, 
and  she  is  not  a  necessary  or  proper  party  to  a  foreclosure 
of  the  mortgage  unless  she  has  voluntarily  signed  it.'  If  an 
infant  or  incompetent  person  whose  real  property  has  been 
mortgaged  in  such  a  proceeding  should  die  before  an  action 
to  foreclose  was  commenced,  his  heirs,  devisees  or  legatees, 
as  the  case  might  be,  would  become  necessary  parties.* 

It  is  to  be  observed  that  a  proceeding  to  mortgage  the 
property  of  an  infant  or  incompetent  person  is  statutory ;  and 
it  is  assumed  here  that  the  proceeding  has  been  properly  con- 
ducted, and  the  mortgage  duly  executed.  The  plaintiff  in 
the  foreclosure  must  allege  in  his  complaint  facts,  showing  the 
interest  of  the  infant  or  incompetent  person  in  the  premises, 
if  he  is  made  a  defendant.*  Great  care  should  be  taken  to 
secure  legal  service  of  the  summons  upon  the  infant  or 
incompetent  person  ;  it  is  also  essential  that  a  guardian  ad 
litem  be  appointed  to  represent  the  interests  of  the  infant.* 
The  guardian  or  committee  who  executes  the  mortgage 
pursuant  to  an  order  of  the  court  is  a  very  desirable,  if  not 
an  indispensable,  party  to  the  action  to  foreclose,  especially 
as  he  is  interested  in  caring  for  any  surplus  that  may  arise, 
and  in  seeing  that  no  deficiency  is  created. 

§  155.  Mortgage  executed  by  administrator  or  execu- 
tor to  pay  decedent's  debts;  heirs  and  devisees  of  the 
decedent  necessary. — Many  of  the  states  have  made  statu- 
tory provisions  in  their  codes  or  otherwise,  for  disposing  of  a 
deceased  person's  real  estate  to  pay  his  debts,  which  provisions 
are,  in  form  and  purpose,  not  unlike  those  made  for  disposing 
of  the  property  of  infants  and  incompetent  persons.  The 
practice  under  such  provisions  varies  in  different  states.     But 


(18T8);    Matter  of  Price,  67  K  Y.  dent  infant  under  the  age  of  fourteen 

231  (1870) ;  Cole  v.  Gourlay,  9  Hun  years.     Where  there  is  a  defect  in 

<X.  Y.)  49o  (1877).  the  action  which  results  in  a  failure 

'  See  ante  %  135,  136.  to  cut  off  the  interest  of  the  infant, 

*  See  ante  §§  141-144.  he  can  maintain  an  action  to   set 

2  Aldrich  v.  Lapham,  6  How.  (N.  aside  the  foreclosure  as  to  himself, 

Y.)  Pr.  129  (1850).  on  arriving  at  his  majority;  McMur- 

*■  See  lugersoU  v.  Mangam,  84  N.  ray  v.   McMurray,    66    N.    Y.    175 

Y.   022  (1881),  stating  what  cousti-  (1876). 

tulca   piuper   service  on  a  uou-resi- 


18-4  MORTGAGE   FOR   DECEDENt's   DEBTS.  [§156. 

it  is  a  general  principle  of  law,  recognized  by  all  courts,  that 
administrators  or  executors,  in  nnortgaging  or  selling  a  dece- 
dent's real  estate,  act  simply  in  a  capacity  representative  of  the 
decedent,  and  are  guided  by  orders  of  the  probate  court. 

The  title  to  the  premises  mortgaged  in  such  a  proceeding 
vests  in  the  heirs  or  devisees  immediately  upon  the  death  of 
the  decedent,  and  is  encumbered  only  pursuant  to  a  statutory 
proceeding  designed  to  marshal  and  pay  his  debts.  In  New 
York  it  is  declared  that  a  mortgage,  executed  pursuant  to 
such  a  proceeding,  has  the  same  effect  as  if  it  had  been  made 
by  the  decedent  immediately  before  his  death.'  The  admin- 
istrator or  executor  who  signed  the  mortgage  under  the 
order  of  the  probate  court,  is  a  very  proper,  if  not  an 
absolutely  necessary,  party  to  an  action  to  foreclose,  as  he  is 
in  some  measure  interested  in  the  action.* 

§  156.  Corporations  necessary  parties  by  corporate 
name. — Corporations  play  such  an  important  part  in  the 
commercial,  industrial  and  social  life  of  this  age,  that  legis- 
latures and  courts  have  materially  enlargejd  their  rights  and 
privileges  so  that  more  than  ever  they  are  a  "single  indivi- 
dual " '  in  the  law.  They  are  generally  vested  with  all  the 
rights  and  may  assume  all  the  obligations  known  to  the  law. 
With  limited  exceptions  they  may  acquire  real  estate  and 
convey  the  same  by  deed  or  mortgage.* 

Whenever  a  corporation  in  its  corporate  name  becomes 
the  owner  of  the  equity  of  redemption  in  mortgaged  prem- 
ises, or  executes  a  mortgage  upon  its  real  estate,  it  is  a 
necessary  defendant  to  a  foreclosure  in  its  corporate  name.* 
This  rule  is  based  upon  the  broad  principle  that  corporations 
may  sue  and  be  sued  in  law  by  their  corporate  names.*     A 


>  N.  Y.  Code  Civ.  Proc.  §  27G0.  96  N.  Y.  467(1884) ;  Greenpoint  Su- 

*  See  McMannis  v.  Rice,  48  Iowa,  gar  Co.  v.  Wliitin,  69N.Y.  338(1877). 

361  (1878).  '  Reed   v.   Bradley,    17    111.    331 

«  2  Kent,  207.  (1856) ;     Ottawa     Northern    Plank 

<  See  Aurora  Agricultural  &H.  So-  Road  Co.    v.   Murray,    15   111.    336 

ciety  V.  Paddock,  80  111.  263  (1873).  (1854)  ;  Donnelly  v.  Rusch,  15  Iowa, 

As  to  what  is  necessary  to  authorize  99  (1863). 

a  manufacturing  corporation  to  exe-  *  2  Kent,  284,  293  ;  People's  Bank 

cute  a  mortgage  in  New  York,  see  v.  Hamilton  Manufacturing  Co.,  10 

Rochester  Savings  Bank  v.  Averell,  Paige  Ch.  (N.  Y.)  481  (1843). 


§  157.] 


TENANTS   AND   OCCUPANTS. 


185 


stockholder  is  generally  not  a  necessary  defendant  in  the 
foreclosure  of  a  mortgage  on  corporate  property  ;'  but  a  stock- 
holder in  a  defunct  corporation  has  such  an  interest  as  enti- 
tles him  to  defend  a  foreclosure  on  the  corporate  real  estate? 

§  157.  Tenants  and  occupants  necessary.  —  Every 
tenant  who  takes  a  lease  from  the  owner  of  the  equity  of 
redemption  in  mortgaged  premises,  subsequent  to  the  execu- 
tion and  delivery  of  the  mortgage,  is  a  necessary  defendant 
to  a  foreclosure.*  The  occupant  or  person  in  possession  of 
the  premises  at  the  time  of  the  commencement  of  the 
foreclosure  is  alsoi  indispensable,  no  matter  how  or  under 
what  circumstances  he  came  into  possession.*  A  tenant  or 
occupant  not  made  a  party  is  not  bound  by  the  decree,  and 
if  omitted,  he  can  not  be  ejected  till  the  expiration  of  his 
tenancy.*  His  omission  will,  moreover,  produce  such  a 
defect  of  title  as  to  relieve  a  purchaser  at  the  sale  of  his  bid.* 

A  tenant  is  not  affected  by  a  foreclosure  till  the  sale  is 
consummated  and  the  deed  delivered.'     And  if  he  is  omitted 


1  Smith  V.  The  Smith  Moquette 
Loom  Co.,  20  N.  Y.  Wk.  Dig.  343 
(1884). 

*  Chouteau  v.  Allen,  70  Mo.  292 
(1879). 

«  Globe  Marble  Mills  Co.  v.  Quinn, 
76  N.  Y.  23  (1879);  Clarkson  v. 
Skidmore,  46  K  Y.  297  (1871), 
modifying  2  Lans.  (N.  Y.)  238; 
Whalen  v.  White,  25  N.  Y.  462 
(1862) ;  Zeiter  v.  Bowman,  6  Barb. 
(N.  Y.)  133  (1849) ;  Simers  v.  Sal- 
tus,  3  Den.  (N.  Y.)  214  (1846); 
Fuller  V.  VanGeesen,  4  Hill  (K  Y.) 
171  (1843);  Ostrom  v.  McCann,  21 
How.  (N.  Y.)  Pr.  431,  433  (1860); 
Peck  V.  Knickerbocker  Ice  Co.,  18 
Hun  (N.  Y.)  183  (1879) ;  Hirsch  v. 
Livingston,  3  Hun  (N.  Y.)  9  (1874) ; 
B.  c.  48  How.  (N.  Y.)  Pr.  243 ;  Cla- 
son  V.  Corley,  5  Sandf.  (N.  Y.)  447 
(1852) ;  Campbell  v.  Savage,  33  Ark. 
678(1878) ;  Gartsidev.  Outley,  58111. 
210,  215  (1871) ;  Tuttle  v.  Lane,  17 


Me.  437  (1840)  ;  Fletcher  v.  Gary, 
103  Mass.  475  (1870) ;  Hemphill  v. 
Ross,  66  N.  C.  477,  480  (1872);  Coe 
V.  Manseau,  62  Wis.  81  (1885). 

*  Ostrom  v.  McCann,  21  How.  (N. 
Y.)  Pr.  431,  433  (1860) ;  Buckner  v. 
Sessions,  27  Ark.  219  (1871);  Mc- 
Lain  v.  Badgett,  4  Ark.  244  (1841) ; 
Cox  V.  Vickers,  35  Ind.  27  (1870). 

"  Sproule  V.  Samuel,  5  111.  (4 
Scam.)  135,  139  (1842)  ;  Downard  v. 
Groff,  40  Iowa,  597,  598  (1875)  ; 
Suiter  v.  Turner,  10  Iowa,  517,  527 
(1860).  In  point,  McDermott  v. 
Burke,  16  Cal.  580  (1860) ;  Richard- 
son V.  Hadsall,  106  111.  476,  479 
(1883) ;  Delespine  v.  Campbell,  45 
Tex.  628  (1876).  See  the  New  York 
cases  in  the  preceding  notes. 

*  Hirsch  v.  Livingston,  3  Hun  (N. 
Y.)  9  (1874) ;  s.  c.  48  How.  (N.  Y.) 
Pr.  243. 

■"  Wbalin  v.  White,  25  N,  Y.  463 
(1863). 


1S6  TEIfANTS   A^B    OCCUPANTS.  [§  157. 

as  a  party,  he  will  be  entitled  to  the  emblements,  and  all 
crops  tiiat  may  be  grown  before  the  expiration  of  his  term  ; 
a  purchaser  at  the  sale  will  receive  his  title  subject  to  the 
rights  of  the  tenant.'  In  a  case  where  pending  a  foreclosure 
a  tenant  went  into  possession  and  raised  and  cut  a  crop  of 
wheat  before  the  action  was  concluded,  he  was  allowed  to 
carry  it  away.'  If  a  tenant  is  made  a  party  and  his  rights 
are  cut  off  by  the  action,  he  will  be  entitled  from  the  surplus 
money,  if  any,  to  the  value  of  his  unexpired  term  and  dam- 
ages for  ejectment  ;  if  there  is  no  surplus,  he  can  maintain 
an  action  against  the  lessor  for  damages.'  Foreclosure 
before  the  expiration  of  a  tenant's  term  will  not  prejudice 
his  right  to  remove  fixtures.* 

A  tenant  or  other  person,  who  holds  possession  after  the 
execution  and  delivery  of  the  deed  by  the  referee  to  sell, 
may  be  ejected  at  once,  if  he  was  made  a  party  to  the  action  ;* 
but  in  some  states  confirmation  of  the  referee's  report  of  sale 
is  necessary  before  ejectment  can  be  maintained.'  If  a  lessee 
on  being  requested  by  the  purchaser  to  attorn  yield  up  the 
possession  of  the  premises,  it  is  equivalent  to  an  actual  evic- 
tion and  will  be  a  good  defense  to  an  action  by  the  mort- 
gagor for  rent  accruing  subsequently.* 


•  Cassilly  v.  Rhodes,  12  Ohio,  88  •  Peck  v.  Knickerbocker  Ice  Co. , 
(1843),  a  leading  case  on  the  subject  18  Hun  (N.  Y.)  183,  186  (1879); 
of  tenants'  rights.  Astor  v.  Turner,  11  Paige  Ch,  (N. 

2  Johnson  v.    Camp,   51  111.   219  Y.)  436  (1845)  ;  Clason  v.  Corley,  5 

(1869).  Sandf.  (N.  Y.)  447  (1853). 

«  Clarkson  v.  Skidmore,  46  N.  Y.  '  Simers  v.  Saltus,  3  Den.  (N.  Y.) 

297(1871),    modifying  2  Lans.  (N.  214  (1846);  Jones  v.  Clark,  20  Johns. 

Y.)  238  (1869).  (N.  Y.)  51  (1822)  ;   Magill  v.  Hins- 

*  Globe  Marble  Mills  Co.  v.  Quinn,  dale,  6  Conn.  464,  469  (1827) ;  s.  c. 
T6  N.  Y.  23  (1879).  16  Am.  Dec.  70;  Wakeman  v.  Banks, 

"  Kershaw  v.  Thompson,  4  Johns.  2  Conn.   445  (1818)  ;    Rockwell  v. 

Ch.  (N.  Y.)  609  (1820) ;  Hirsch  v.  Bradley,  2  Coim.  1  (1816). 
Livingston,   3  Hun  (N.    Y.)  9,   10 
(1874);  N.  Y.  Code  Civ.  Proc.  §  2233 


CHAPTER  YH. 


PARTIES  DEFENDANT— NECESSARY  TO  PERFECT  THE  TITLE. 


SUBSEQUENT  MORTGAGEES  AND  LIENORS, 


159. 


160. 

161. 

162. 

163. 

164. 
165. 
166. 

167. 
168. 


Introductory. 

Subsequent  mortgagees,  still 
owniug  their  mortgages, 
necessary  defendants. 

Subsequent  mortgagees  — 
Remedies  if  omitted  as  de- 
fendants. 

Subsequent  mortgagee  own- 

"  iiig  prior  mortgage — Prac- 
tice on  foreclosure. 

Subsequent  judgment  credi- 
tors, still  owning  judgments, 
necessary. 

Judgment  creditors  pendente 
Ide  and  creditors  at  large 
not  necessary. 

.ludirinent  creditors — Reme- 
dies if  omitted  as  defendants. 

^leclianic's  lien,  owner  of, 
necessary. 

Subsequent  lienor,  an  assign- 
or no  longer  holding  the 
incumbrance,  not  necessary. 

Subsequent  lienors,  holding 
any  kind  of  an  equitable  or 
contingent  interest  in  the 
lien,  generally  necessary. 

Assignee  of  subsequent  mort- 
gage, judgment  or  other 
lieu,  necessary. 


§  169.  Assignee  of  subsequent  mort- 
gage or  lien  pendente  lite  not 
necessary. 

170.  Incumbrancer  pendente    lite 

not  necessary. 

171.  Subsequent  mortgagee  or  lien- 

or a  married  woman  does 
not  alter  rule  ;  necessary. 

172.  Heirs,  devisees,  legatees  and 

annuitants  of  deceased  sub- 
sequent lienor  generally  not 
necessary. 

173.  Executors  and  administrators 

of  a  deceased  subsequent 
lienor  necessary. 

174.  Assignee  in  bankruptcy  and 

voluntary  general  assignee 
of  subsequent  lienor  neces- 
sary. 

175.  General  guardian  of  infant, 

and  committee  of  lunatic, 
idiot  or  habitual  drunkard, 
trustees  and  beneficiaries, 
holding  subsequent  mort- 
gage or  lien,  necessary. 

176.  Purchasers  at  tax  sales,  boards 

of  supervisors,  state  comp- 
trollers and  municipal  cor- 
porations, defendants. 


§  158.  Introductory. — In  this  chapter  will  be  continued 
the  consideration  of  parties  who  are  necessary  to  a  fore- 
closure, for  the  purpose  of  producing  to  the  purchaser  at  the 
sale  as  perfect  a  title  as  the  mortgagor  could  have  granted 
at  the  time  of  the  execution  of  the  mortgage ;  that  is,  such 
a  title  as  a  court  will  compel  a  bidder  at  the  sale  to  accept. 
As  has  been  stated,  this  and  the  preceding  chapter  are  devoted 
to  those  parties  who  are  necessary  and  indispensable  to  the 
accomplishment  of  such  a  purpose. 

187 


188  SUBSEQUENT   LLKNOKS.  [§158. 

In  the  preceding  chapter  attention  has  been  given  exclu- 
sively to  those  parties  who  are  necessary  to  an  action  to 
foreclose  and  to  cut  off  the  fee  title  and  the  entire  equity  of 
redemption,  as  it  existed  in  the  mortgagor  and  the  owners 
of  the  equity  from  him  by  grant,  descent,  devise  or  otherwise, 
even  to  the  remotest  degree  in  quantity  of  title  or  interest. 
In  this  chapter  attention  will  be  given  only  to  those  parties 
who  acquired  incumbrances  and  liens  upon  the  equity  of 
redemption,  subsequent  to  the  execution  of  the  mortgage 
under  foreclosure.  It  is  to  be  kept  clearly  in  mind  that  the 
word  "  necessary,"  as  it  will  be  used  in  this  chapter,  has  its 
meaning  limited  and  defined  by  the  purpose  of  the  plaintiff 
in  the  action,  which  is,  as  has  been  stated,  to  produce  and 
offer  at  the  foreclosure  sale  a  perfect  title.  The  word 
*'  necessary  "  has  been  used  by  courts  and  text-book  writers 
with  a  great  deal  of  inaccuracy  and  confusion,  simply  because 
applied  with  an  absolute  and  invariable  meaning,  whereas  it 
is  a  general  and  indefinite  term  and  always  relative  in  signi- 
fication. 

Keeping  it  in  view,  then,  that  it  is  the  design  of  this 
chapter  to  consider  those  parties  only  who  have  acquired  an 
interest  in  the  equity  of  redemption  by  lien  or  incumbrance, 
subsequent  to  the  execution  of  the  mortgage  under  fore- 
closure, it  may  be  said  generally  that  all  such  parties  are 
necessary  to  an  action  to  foreclose,  in  order  to  extinguish 
their  claims  and  the  claims  of  all  persons  holding  under 
them.  It  matters  not  whether  the  lien  is  created  by  the 
voluntary  act  of  the  owner  of  the  equity,  as  in  executing  a 
mortgage,  or  by  process  and  operation  of  law,  as  in  docket- 
ing a  judgment  against  him.  The  theory  of  the  law  is,  that 
such  an  incumbrance  is  a  pledge  of  the  equity  for  the  debt, 
and  gives  the  lienor  an  equitable  interest  in  the  mortgaged 
premises. 

As  the  owner  of  the  equity  may,  by  an  absolute  con- 
veyance, transfer  his  entire  interest,  and  thereby  make  his 
transferee  a  necessary  party  as  we  have  seen,  so  he  can 
on  the  same  principle  pledge,  by  a  mortgage,  judgment  or 
otherwise,  a  part  or  the  whole  of  his  interest  in  the  premises, 
and  thereby  render  the  incumbrancer  a  necessary  party  in 


I  159.]     SUBSEQUENT   MOKTGAGEES — DEFEND AJ!fTS.  189 

order  to  wipe  out  his  interest.  Though  a  lienor  does  not 
acquire  the  fee  title  to  the  equity,  he  acquires  an  interest  in 
the  premises  which  the  statutes  of  the  various  states  have 
long  established,  and  which  the  courts  have  long  recognized 
and  sustained  ;  and  which  parties  dealing  with  the  premises, 
can  not  ignore,  except  at  their  own  peril.  It  is  to  be 
observed  here  that  the  interests  in  the  mortgaged  premises 
held  by  parties  considered  in  this  chapter  are  personal 
property,  while  the  interests  held  by  parties  considered  in 
the  preceding  chapter  were  estates  in  real  property. 

An  action  to  foreclose  will  not  be  dismissed  if  subsequent 
incumbrancers  are  not  made  parties  ;  it  can  be  sustained 
without  them,  but  their  rights  will  not  be  concluded  and 
their  interests  in  the  mortgaged  premises  extinguished, 
unless  they  are  brought  into  the  action.'  It  has  been  held 
that  an  incumbrancer  may  even  be  dismissed  from  the  action 
on  motion  of  the  plaintiff,  unless  he  objects ;'  and  a  subse- 
quent incumbrancer  may  intervene  and  be  made  a  defendant 
on  his  own  application.* 

§  159.  Subsequent  mortgagees,  still  owning  their 
mortgages,  necessary  defendants.— All  authorities  in  all 
countries  where  mortgages  are  foreclosed  by  equitable 
actions,  are  agreed  that  subsequent  and  junior  mortgagees 
are  necessary  parties  to  the  foreclosure  of  a  prior  mortgage 
in  order  to  extinguish  and  cut  off  their  liens.*     The  action 


>  Donnelly  v.  Rusch,  15  Iowa,  99  (1844) ;  Waller  v.   Harris,  7  Paige 

(1863)  ;    Heimstreet  v.    Winnie,    10  Ch.  (N.  Y.)  167  (1838) ;  Vroom  v. 

Iowa,  430  (1860) ;    relied  upon   in  Ditmas,   4  Paige    Ch.   536   (1834) ; 

Street  v.  Beal,  16  Iowa,  68,  70  (1864).  Benedict  v.  Oilman,  4  Paige  Ch.  (N. 

«  Heimstreet  v.  Winnie,  10  Iowa,  Y.)  58  (1833) ;  Carpentier  v.  Bren- 

430  (1860).  ham,  40  Cal.  221  (1870) ;  Shores  v. 

«  Parott  V.  Hughes,  10  Iowa,  459  Scott  River  Co.,  21  Cal.  185  (1862); 

(1860).  Montgomery  v.  Tutt,  11  Cal.  307, 

*  Gage  V.  Brewster,  31  K  Y.  218  314  (1858) ;  Whitney  v.  Higgins,  10 

(1865) ;   Brainard  v.  Cooper,  10  N.  Cal.  547,    551  (1858)  ;  Goodman  v. 

Y.  356  (1852)  ;  Peabody  v.  Roberts,  White,  26  Conn.  320  (1857) ;  Broome 

47  Barb.  (N.  Y.)  91  (1866)  ;  Arnot  v.  v.  Beers,  6  Conn.  207  (1826);  Swift  v. 

Post,    6    Hill    (N.    Y.)    65    (1843) ;  Edson,  5  Conn.  534  (1825) ;  Smith  v. 

Franklyn  v.  Hayward,  61  How.  (N.  Chapman,  4Conn.346(1822);Hodgen 

Y.)  Pr.  43  (1881)  ;   Vanderkemp  v.  v.  Guttery,  58  Bl.  431  (1871) ;  Strang 

Shelton,  11  Paige  Ch.  (N.   Y.)  28  v.   Allen,   44  111.   428  (1867).     See 


190  SUBSEQUENT    MORTGAGEES   DEFENDANTS.      [§159. 


can  be  sustained  without  them,  but  a  defective  title  would 
be  offered  at  the  sale  which  no  court  would  compel  a  bidder 
to  accept.'  The  rule  has  long  been  settled  that  in  a  bill  to 
foreclose  a  mortgage,  the  rights  of  incumbrancers  not  made 
parties  to  the  suit,  are  not  barred  or  affected  by  the  decree.* 
If  the  foreclosure  is  conducted  by  advertisement  the  same 
rule  prevails.'     If  the  subsequent  mortgagee  is  a  trustee  for 


Shinn  v.  Shinn,  91  HI  477  (1879), 
■where  the  action  was  upon  a  deed  of 
trust  in  the  nature  of  a  mortgage. 
In  Kenyon  v.  Shreck,  52  111.  382 
(1869),  subsequent  incumbrancers 
were  held  not  necessary  parties  to  a 
proceeding  for  foreclosure  by  scire 
facias;  aliter,  if  the  foreclosure  is 
by  an  action  in  equity.  Catterlin  v. 
Armstrong,  79  Ind.  514  (1881); 
Hosford  V.  Johnson,  74  Ind.  479, 
481  (1881);  Hasselman  v.  McKernan, 
50  Ind.  441  (1875) ;  McKernan  v. 
Neff,  43  Ind.  503  (1873) ;  Holmes  v. 
Bybee,  34  Ind.  262  (1870) ;  Murdock 
V.  Ford,  17  Ind.  52  (1861) ;  Proctor 
V.  Baker,  15  Ind.  178  (1860).  See 
also,  in  point,  Mack  v.  Graver,  12 
Ind.  254  (1859) ;  Pattison  v.  Shaw,  6 
Ind.  377  (1855),  holding  junior  incum- 
brancers proper,  but  not  necessary, 
parties.  Meredith  v.  Lackey,  14 
Ind.  529(1860);  8.  c  16  Ind.  1  (1860) ; 
Walker  v.  Schreiber,  47  Iowa,  329 
(1877) ;  Newcomb  v.  Dewey,  27 
Iowa,  381  (1869);  Knowles  v. 
Rablin,  20  Iowa,  103  (1865); 
Anson  v.  Anson,  20  Iowa,  58  (1865); 
Johnson  v.  Harmon,  19  Iowa,  56 
(1865) ;  Macey  v.  Fenwick,  4  B. 
Mon.  (Ky.)  309  (1843) ;  Rogers  v. 
Holyoke,  14  Minn.  220  (1869); 
Brown  v.  Nevitt,  27  Miss.  801 
(1854);  White  v.  Bartlett,  14  Neb. 
320  (1883);  Hinson  v.  Adrian,  86 
N.  C.  81  (1882) ;  Mills  v.  Traylor, 
30  Tex.  7  (1867) ;  Weed  v.  Beebe,  21 
Vt.  495  (1849);  Deuster  v.  McCamus, 
14    Wis.    307    (1861);    Moore    v. 


Cord,  14  Wis.  213  (1861) ;  Murphy 
V.  Farwell,  9  Wis.  102  (1859); 
Farwell  v.  Murphy,  2  Wis.  533 
(1853).  For  the  English  authorities, 
see  Fisher  on  Mortgages,  §  318 ; 
Burgess  v.  Sturges,  14  Beav.  440 
(1851) ;  Tylee  v.  Webb,  6  Beav.  552 
(1843);  Adams  v.  Paynter,  1  Coll.  Ch. 
530  (1844) ;  Johnson  v.  Holdsworth, 
1  Sim.  N.  S.  106  (1850) ;  Delabere 
V,  Norwood,  3  Sw.  144  (1818); 
Payne  v.  Compton,  2  Y.  «&  C.  457 
(1837).  See  the  following  sections 
and  notes;  also  the  cases  cited  in  the 
remaining  notes  to  this  section. 
In  Rowan  v.  Mercer,  10  Humph. 
(Tenn.)  359  (1849),  subsequent  mort- 
gagees were  held  proper,  but  not 
necessary,  parties  ;  the  decree  and 
sale  were  held  conclusive  without 
them. 

>  CuUum  V.  Batre,  2  Ala.  415 
(1841),  correcting  Judson  v.  Eman- 
uel, 1  Ala.  598  (1840);  Hess  v. 
Feldkamp,  2  Disney  (Ohio),  333 
(1858).  See  Hay  ward  v.  Stearns,  39 
Cal.  58  (1870);  Valentine  v.  Havener, 
20  Mo.  133  (1854);  Russell  v.  Mullan- 
phy,  4  Mo.  319  (1836).  See  the 
cases  supra. 

«  McCall  V.  Yard,  9  N.  J.  Eq.  (1 
Stockt.)  358  (1853) ;  8.  C.  11  N.  J. 
Eq.  (3  Stockt.)  58  (1855).  See  also 
Gould  V.  Wheeler,  28  N.  J.  Eq.  (1 
Stew.) 541  (1877);  Willink  v.  Morris, 
Canal  &  Banking  Co.,  4  N.  J.  Eq. 
(3  H.  W.  Gr.)  377  (1843). 

» Winslow  V.  McCaU,  32  Barb.(N. 
Y.)  241  (1860). 


§  160.J  RE^MEDEES    OF   OlMITTED    MORTGAGEE. 


191 


numerous  bondholders,  it  is  sufficient  to  make  him  a 
defendant  in  his  representative  capacity,  without  bringing 
the  bondholders  into  the  action ;  a  bondholder  may  inter- 
plead, however, /r<?  interesse  suo}  The  successor  of  a  trustee 
is  also  a  necessary  defendant  if  he  has  accepted  the  trust.* 

§  i6o.  Subsequent  mortgagees — Remedies  if  omitted 
as  defendants. — If  a  junior  mortgagee  is  omitted  as  a  party, 
his  remedy  is  to  redeem  from  the  sale  under  foreclosure  ;*  and 
this  right  must  be  exercised  in  most  states  within  ten  years 
from  the  time  when  the  mortgage  debt  becomes  due.*  In 
his  redemption  an  accounting  for  rents  and  profits  can  be 
compelled,*  and  the  junior  mortgagee  will  be  obliged  to  pay 
only  the  mortgage  debt,  principal  and  interest  without  the 
costs  of  the  previous  foreclosure.*  Though  the  property 
may  have  been  sold  under  foreclosure  for  less  than  the 
mortgage,  the  party  redeeming  will  nevertheless  be  obliged 
to  pay  the   amount   due  on   the   mortgage  with  interest ; 


>  McElrath  v.  Pittsburgh  «fe  S.  R. 
Co.,  68  Pa.  St.  37  (1871);  Supervisors 
of  Iowa  County  v.  Mineral  Point  R. 
R..  24  Wis.  93(1869). 

'  Delaplaine  v.  Lewis,  19  Wis.  476 
(1865). 

'Wiley  V.  Ewing,  47  Ala.  418 
(1872) ;  Carpentier  v.  Brenhan,  40 
Cal.  221  (1870) ;  Hodgen  v.  Guttery, 
58  HI.  431  (1871) ;  Gower  v.  Win- 
chester, 33  Iowa,  303  (1871) ;  New- 
comb  V.  Dewey,  27  Iowa,  381  (1869); 
Roney  v.  Bell,  9  Dana  (Ky.)  4  (1839); 
Cooper  V.  Martin,  1  Dana  (Ky.)  25 
(1833) ;  Clary  v.  Marshall,  5  B.  Mon. 
(Ky.)  274  (1845) ;  Bank  of  U.  S.  v. 
Carroll,  4  B.  Mon.  (Ky.)  50  (1843) ; 
Avery  v.  Ryerson,  34  Mich.  363 
(1876);  Baker  v,  Pierson,  6  Mich. 
522  (1859);  Renard  v.  Brown,  7 
Neb.  449  (1878)  ;  HoUiger  v.  Bates, 
43  Ohio  St.  437  (1885) ;  s.  c.  1  West. 
Rep.  516.    See  the  cases  supra. 

*  Gage  V.  Brewster,  31  N.  T.  218 
(1865);  Peabody  v.  Roberts,  47 
Barb.  (N.  Y.)  91  (1866) ;  County  of 


Floyd  V.  Cheney,  57  Iowa,  160,  163 
(1881);  Crawford  v.  Taylor,  43 
Iowa,  260  (1875) ;  Gower  v.  Win- 
chester, 33  Iowa,  308  (1871).  In 
Illinois  the  time  is  only  seven  years  ; 
Ewing  V.  Ainsworth,  53  III  464 
(1870). 

»  Gage  V.  Brewster,  31  N.  T.  318 
(1865);  TenEyck  v.  Casad,  15 
Iowa,  524  (1864).    See  the  next  note. 

«  Gage  V.  Brewster,  31  N.  Y.  218 
(1865),  opinions  per  Denio,  Ch.  J., 
Ingraham  and  Mullen,  J  J.  Mullen, 
J.,  in  his  opinion,  makes  a  careful 
analysis  and  review  of  Chancellor 
Walworth's  opinion  in  Vanderkamp 
V.  Shelton,  11  Paige  Ch.  (N.  Y.)  28 
(1844),  approving  it  in  all  respects. 
See  Brainard  v.  Cooper,  10  N.  T. 
356  (1852);  Vroom  v.  Ditmas,  4 
Paige  Ch.  (N.  Y.)  526  (1834) ;  Bene- 
diet  V.  Gilman,  4  Paige  Ch.  (N.  Y.) 
58  (1833),  reviewed  and  commented 
on  in  the  same  opinion.  See  also 
Belden  v.  Slade,  26  Hun  (N.  Y.)  635 
(1883). 


192  EEMEDLES    OF    OMITTED    MORTGAGEE.  [§  IGO. 

if  the  property  sold  for  more  than  the  amount  of  the  mort- 
gage, its  selhng  price  becomes  the  amount  to  be  paid  to 
redeem.*  After  a  mortgage  has  been  paid,  an  action  to 
redeem  can  not  be  maintained  upon  it."  It  has  been  held 
in  some  cases  that  a  junior  mortgagee,  who  was  omitted  as 
a  defendant  in  an  action  to  foreclose  a  senior  mortgage,  may 
maintain  a  foreclosure  of  his  own  mortgage,  instead  of 
redeeming  from  the  sale  under  the  senior  mortgage,  and  be- 
coming thereby  the  equitable  assignee  of  the  senior  mortgage/ 
"  There  seems  to  be  no  impropriety  whatever  under 
the  authorities  in  concluding  that  the  plaintiff  may  main- 
tain the  present  action  as  one  for  the  foreclosure  of  his 
mortgage,  notwithstanding  the  foreclosure  and  sale  pre- 
viously had  under  the  senior  mortgage.  This  conclusion  is 
of  very  great  practical  importance  in  cases  like  the  one  now 
before  the  court,  because  it  is,  to  say  the  least,  exceedingly 
doubtful  whether  the  action  to  redeem  can  be  brought  after 
the  expiration  of  ten  years  from  the  time  the  mortgage  debt 
became  due,  or  the  last  payment  was  made  upon  it.  *  *  *  If 
an  action  to  redeem  in  a  case  like  the  present  one  is  the 
only  action  which  the  incumbrancer  can  maintain,  and  that 
must  be  commenced  within  ten  years  after  the  right  has 
accrued,  the  legal  anomaly,  after  that,  will  be  presented  of  a 
party  having  a  demand  presumed  by  law  to  be  unpaid,  with- 
out any  legal  or  equitable  means  of  applying  towards  its 


»  Johnson  v.  Harmon,  19  Iowa,  56  Weston,  27N  .J.  Eq.(13 0.  E.  Gr.)435 

(18G5;,  per  Wright,  Ch.  J.,  writing  (1876) ;  Stewart  v.  Johnson,  30  Ohio 

an  exhaustive  opinion.      American  St.  24  (1876)  ;  Besser  v.  Hawthorn, 

Buttonhole  Co.  v.  Burlington  M.  L.  3  Oreg.   129  (1869)  ;   3   Oreg.  512  ; 

Association,  61  Iowa,  464  (1883).  Murphy    v.    Farwell,    9    Wis.    103 

'  McHenry  v.  Coop«r,  27  Iowa,  (1859).     In  Bache  v.  Purcell,  6  Hun 

137,  141  (1869).  (N.  Y.)  518  (1876),   a  junior  mort- 

*  Peabody  v.   Roberts,   47  Barb.  gagee  was  allowed  to  foreclose,  even 

(N.  Y.)  91  (1866).    In  Walsh  v.  Rut-  though  he  had  been  made  a  party 

gers  Fire  lus.  Co.,  13  Abb.  (N.  Y.)  defendant    to    a    foreclosure    by  a 

Pr.  33  (1861),  such  a  foreclosure  was  senior  mortgagee.     But  see  Fliess  v. 

held  necessary.    Coleman  v.  Wither-  Buckley,    90    N.   Y.    286    (1882), 

spoon,  76  lud.  285(1881);  McKernan  holding    that    a    junior    morlgagee 

V.  Nelf ,  43  Ind.  503  (1873) ;  Atwater  can   not   maintain  a   foreclosure  to 

V.  West,   28  N.  J.  Eq.  (1  Stew).  361  reach  surplus  moneys  arising  on  the 

(1677),  an  important  case  ;  Chilver  v.  foreclosme  of  a  senior  moi  igage. 


§  161.]  PLAINTIFF SUBSEQUENT   MOETGAGE.  193 

payment  the  security  created  expressly  for  that  purpose."  * 
A  junior  mortgagee  or  incumbrancer,  who  is  omitted  in  the 
foreclosure  of  a  prior  mortgage,  may  be  cut  off  by  a  strict 
foreclosure,^  conducted  by  the  purchaser  at  the  foreclosure 
sale,  who  by  his  purchase  of  the  premises  becomes  the  equi- 
table assignee  of  the  prior  mortgage.' 

§  i6i.  Subsequent  mortgagee  owning  prior  mortgage 
— Practice  on  foreclosure. — A  junior  mortgagee,  who  owns 
a  prior  mortgage,  must  set  forth,  in  his  complaint  to  foreclose 
the  prior  mortgage,  his  claim  upon  the  junior  mortgage,  or 
it  will  be  cut  off  by  the  action  ;  he  can  not  compel  the 
premises  to  be  sold  subject  to  his  junior  mortgage.  "  The 
practice  of  the  court  requires  that  the  complainant  in  his 
bill  should  set  out  all  his  claims  upon  the  mortgaged  prop- 
erty, and  have  the  same  in  that  suit  duly  litigated  and 
disposed  of  by  the  decree,  and  that,  if  he  omits  to  set  out 
any  incumbrance  which  he  holds  upon  the  premises  junior 
to  the  mortgage  described  in  the  bill,  such  junior  incum- 
brance will  be  cut  off  by  a  sale  on  a  decree  foreclosing  the  first 
mortgage,  and  making  no  allusion  to  any  further  lien."* 

As  a  general  rule  a  foreclosure  bars  the  claims  of 
all  persons  having  liens  subsequent  to  the  mortgage  fore- 
closed, who  are  parties  to  the  suit.  The  plaintiff  is  a  party, 
and  if  he  fails  to  set  up  his  claim  on  the  junior  mortgage, 
the  neglect  is  his  own,  and  can  not  be  remedied  by  under- 
taking to  impose  a  condition  on  the  judgment  of  foreclosure 
and  sale,  for  which  the  judgment  itself  gives  no  warrant.  If 
the  subsequent  mortgagee  has  released  the  mortgaged 
premises  from  the  lien  of  his  mortgage,  he  is  no  longer  a 


'  Peabody  v.    Roberts,   47  Barb.  *  Walsh  v.  Rutgers  Fire  Ins  Co., 

(N.  Y.)  91,103  (1866),  :per  Daniels,  13  Abb.    (N.    T.)  Pr.   33  (1861); 

J.,  whose  opinion  seems   to  be  at  Wheeler  v.  VanKuren,  1  Barb.  Ch. 

variance  with  Gage  v.  Brewster,  31  (N.   Y.)  490  (1846) ;  Homoeopathic 

N.  Y.  218  (1865).  Medical  Life  Ins.   Co.  v.    Sixbury, 

« Brainard  v.  Cooper  10  K  Y.  359  17  Hun  (K  Y.)  428  (1879),  per  Tal- 

1853) ;    Franklyn  v.   Hayward,   61  cott,  P.  J. ;  Roosevelt  v.  Ellithrop, 

gow.  (N.  Y.)  Pr.  43  (1881).  10  Paige  Ch.   (N.   Y.)  415  (1843); 

»  Gage  V.  Brewster,  31  N.  Y.   218  Tower  v.  White,  10  Paige  Ch.  (N.  Y.) 

(1865)  ;  Brainard  V.  Cooper,  lON.Y.  395  (1843).      See  Clements  v.  Gris- 

856  (1852).  wold,  46  Hun  (N.  Y.)  377  (1887). 

a3) 


194  JUDGMEI^T    CREDITORS    DEFENDANTS.  [§  162. 

necessary  defendant.  The  owner  of  real  property,  parcel  B, 
subject  to  a  mortgage  which  also  covers  other  property, 
parcel  A,  in  which  last  named  property  he  has  no  interest, 
is  not  a  necessary  party  to  an  action  to  foreclose  a  prior 
mortgage  on  said  parcel  A ;  and  though  the  said  parcel  A 
be  sold  under  the  decree  for  such  sum  as  leaves  nothing  to  be 
applied  on  the  second  mortgage,  covering  also  plaintiffs 
premises,  he  can  not,  by  virtue  of  his  said  ownership  of 
parcel  B,  be  allowed  to  come  in  and  redeem.' 

§  162.  Subsequent  judgment  creditors,  still  owning 
judgments,  necessary. — A  person  who  obtains  and  dockets 
a  judgment  against  the  owner  of  an  equity  of  redemption  in 
mortgaged  premises,  is  a  necessary  defendant  to  a  foreclosure 
of  the  mortgage  commenced  after  the  docketing  of  the 
judgment ;'  a  judgment  creditor  can  not  be  joined  by 
the  mortgagee  as  a  co-plaintiff.'  In  some  states  judgment 
creditors  are  held  only  proper  and  not  indispensable  parties; 
but  the  courts  which  hold  this  are  agreed  that  a  judgment 
creditor's  rights  are  not  affected,  unless  he  is  brought  into 
the  action,  and  that  his  omission  produces  an  imperfect 
title.*     In  Maryland  it  seems  to  be  the  rule  to  make  prior  as 


'  Barnes  v.  Decker,  49  K  T.  Supr.  berger,  13  Fla.  169  (1870) ;  Kelgour 

Ct.  (17  J.  &  S.)  221  (1883).  v.  Wood,  64  111.  345  (1872) ;  Strang 

«  Verdin  v.  Slocum,  71  N.  Y.  345  v.  Allen,  44  111.  428  (1867) ;  Ducker 

(1877) ;  Morris  v.  Wheeler,  45  N.  Y.  v.  Belt,  3  Md.  Ch.  Dec.  13  (1851)  • 

708  (1871) ;  Brainard  v.  Cooper,  10  Wylie  v.  McMakin,  2  Md.  Ch,  Dec. 

N.   Y.   356  (1853) ;    Winebrener  v.  413  (1851) ;  Hinson  v.  Adrian,  86  N. 

Johnson,  7  Abb.  (N.  Y.)  Pr.  N.  S.  C.  61  (1882).     See  the  three  preced- 

202  (1869) ;  Shaw  v.  McNish,  1  Barb.  ing  sections  and  notes. 
Ch.   (N.    Y.)  326    (1846) ;    Niagara  ^  Felder  v.  Murphy,  2  Rich.  (S. 

Bank  v.  Roosevelt,  9  Cow.  (N.  Y.)  C.)  Eq.  58  (1845). 
409  (1827) ;  Arnot  v.  Post,  6  Hill  (N,  *  Person  v.  Merrick,  5  Wis.  231 

Y.)  65  (1843) ;  Haines  v.  Beach,  3  (1856).     In  Leonard  v.  Groome,  47 

Johns.   Ch.   (N.   Y. )  466  (1818);  Md.  499(1877),  the  judgment  credi- 

Hubbell  V.  Sibley,  5  Lans.  (N.  Y.)  tor  was  held  not  indispensable,  ou 

56  (1871) ;  People's  Bank  v.  Hamil-  the  ground  that  he  was  presumed  to 

ton  Manuf.  Co.,  10  Paige  Ch.   (N.  know  of  the  senior  mortgage,  and 

Y.)  481  (1843) ;  Vroom  v.  Ditmas,  4  therefore  to  be  able  to  protect  his 

Paige  Ch.  (N.  Y.)  531(1834);  Bene-  own  interests.   See  Harris  v.  Hooper, 

diet  V.  Gilman,  4  Paige  Ch.  (N.  Y.)  50  Md.  537  (1878).    See  also  Gaines 

58(1833) ;  Alexander  v.  Greenwood,  v.  Walker,  16  Ind.  361  (1861),  hold- 

24  Cal.  505  (1864) ;  Ritch  v.  Eichel-  ing    a    judgment    creditor    onl^    a 


§  162.]  JUDGMENT    CREDITORS    DEFENDANTS.  195 

well  as  subsequent  incumbrancers  parties  to  a  foreclosure.' 
The  above  general  rule  applies  if  the  foreclosure  is  conducted 
by  advertisement  under  the  statute.  All  judgment  creditors 
must  be  served  vi^ith  the  notice,*  and  if  a  judgment  is 
perfected  against  the  owner  of  the  equity  at  any  time  after 
the  first  publication  of  the  notice  and  before  the  day  of 
sale,  the  judgment  creditor  becomes  a  necessary  party  and 
must  be  served  with  the  notice.  This  ruling  is  based  on  the 
language  of  the  statute.' 

In  a  recent  foreclosure  certain  judgment  creditors  were 
not  originally  made  parties;  but  after  the  entry  of  judgment 
they  appeared  by  attorneys,  on  whose  stipulation  it  was 
ordered  that  all  papers  and  proceedings  be  amended  nunc 
pro  tunc,  by  inserting  their  names  in  the  decree,  and  that 
they  be  bound  in  all  respects  by  the  action.  The  bidder  at 
the  sale  refused  to  complete  his  purchase,  on  the  ground  that 
there  was  a  defect  of  the  parties  in  the  omission  of  the 
judgment  creditors;  the  court  determined  that  it  was 
incumbent  upon  the  plaintiff  to  establish  unequivocally  the 
authority  of  the  attorneys  to  enter  into  the  stipulation,  and 
that  without  such  authority  the  judgment  creditors  were 
not  bound,  and  the  bidder  could  not  be  compelled  to  take 
the  title.*  The  omission  of  a  judgment  creditor,  who  holds 
a  judgment  against  the  owner  of  a  life  estate  in  mortgaged 
premises,  will  produce  such  a  defect  of  title  as  to  release 
a  bidder  from  his  bid  at  the  foreclosure  sale.' 

If  a  judgment  is  docketed  against  a  person  who  subse- 
quently purchases  real  estate  and  executes  a  purchase  money 
mortgage  thereon,  the  judgment  becomes  an  incumbrance  on 
the  equity   of   redemption   subsequent    in   its  lien  to   the 


proper  party.      See  §  159  and  the  <  Lyon  v.   Lyon,  67  N.  Y.  250, 

note  on  the  Indiana  cases.  253  (1876),  'per  Miller,  J.     See  also 

>  Heuisler  v.  Nickum,  38  Md.  270  Waldo  v.  Williams,  3  111.  (2  Scam.) 

(1873) ;  Tome  v.  Mer.  Mec.  B.  «fe  L.  470  (1840),  where  the  omission  was 

Co.,  34  Md.  12  (1870);  Md.  Code,  corrected  by  an  a^ms  writ, 

vol.  2,  art.  4,  §§  782,  792.  « Verdin  v.  Slocum,  71  N.  Y.  345 

2  Root  V.  Wheeler,  12  Abb.  (N.  (1877),  reversing  9  Hun  (N.  Y.)  150 

Y.)  Pr.  &94  (18G1).  (1876). 

^  Groff  V.  Morehouse,  51  N.  Y. 
503  (1873). 


196  JUDGMENT   CREDITORS    PENDENTE    LITE.       [§  163. 

purchase  money  mortgage,  and  the  judgment  creditor  is  a 
necessary  defendant  to  a  foreclosure  of  the  mortgage.'  Like- 
wise a  judgment  against  a  person  who  in  any  way  becomes 
the  owner  of  the  equity  of  redemption  in  mortgaged  premises 
becomes  a  lien  upon  the  premises,  and  the  judgment  creditor 
is  a  necessary  party  in  an  action  to  foreclose  the  mortgage. 

§  163.  Judgment  creditors  pendente  lite  and  creditors 
at  large  not  necessary. — A  judgment  is  a  lien  from  the 
time  it  is  docketed,*  but  if  the  proceedings  to  recover 
the  judgment  have  not  been  completed,  the  judgment  is  not 
a  lien  and  the  judgment  creditor  is  not  a  necessary  defen- 
dant. Thus  a  party  who  had  recovered  an  award  against  a 
mortgagor,  but  had  not  yet  reduced  it  to  a  judgment,  has 
been  held  hot  a  necessary  party,  for  the  reason  that  he  had 
no  lien  on  the  land  ;'  and  where  creditors  had  perfected  their 
judgments  against  a  mortgagor  a  few  days  after  he  had 
made  a  general  assignment,  they  were  held  unnecessary 
parties,  and  though  they  were  made  parties  to  the  action, 
they  were  not  allowed  to  interppse  a  defense,  as  the  assignee 
was  the  only  necessary  defendant,*  A  creditor  at  large  has 
no  status  in  court,  and  is  not  a  necessary  party ;  he  will  not 
even  be  allowed  to  intervene  on  his  own  application.* 

What  is  said  here  refers  to  money  judgments;  but  the 
same  rules  apply  to  equitable  decrees  and  orders  affecting 
mortgaged  premises,  which  are  entered  in  a  "judgment 
book,"  and  also  to  the  persons  benefited  or  bound  by  such 
decrees  and  orders.'  A  judgment  creditor  who  has  levied 
an  execution  remains  a  necessary  party  until  the  sheriff's 
certificate  of  sale  is  issued  to  the  purchaser,  and  his  judg- 
ment has  been  satisfied  in  fuU.^     An  attaching  creditor  is 


'  Winebrener  v.  Johnson,  7  Abb.  *  Spring  v.  Short,  90  K  T.  538, 

(N.  Y.)  Pr.  N.  S.  203  (1869);  DeSaus-  545  (1882). 

sure  V.  Bollraann,  7  S.  C.  339,  339  »  Herring  v.  N.  Y.,  L.  E.  &  W. 

(1875).  R.   R.   Co.  105  N.  Y.  340  (1887); 

«  N.  Y.  Code  Civ.  Proc.  §§  1250,  People  v.  Erie  Railway  Co.,  56  How. 

1251  ;   Allen  v.  Case,  13  Wis.   621  (N.  Y.)  Pr.  122  (1878) ;  Gardner  v. 

(1861).  Lansing,  28  Hun  (N.Y.)  413  (1882). 

»  Jones  V.  Winans,  20  N.  J.  Eq.  •  N.  Y.  Code  Civ.  Proc.  §  1236. 

(5  C.  E.  Gr.)  96  (1869).  ■"  See  ante  %  123  ;  N.  Y.  Code  Civ. 


§  164.]  REMEDIES    OE    OMITTED    CREDITORS  197 

also  a  necessary  party,'  but  a  judgment  creditor  whose 
judgment  is  docketed  pending  the  foreclosure,  is  not  a 
necessary  defendant ;  he  may,  however,  intervene  by  petition, 
or  redeem  before  the  sale.'  If  a  subsequent  judgment 
creditor  is  omitted  as  a  party  defendant,  any  defendant  who 
has  a  real  interest  in  the  premises  may  object  by  demurrer, 
if  the  defect  appears  on  the  face  of  the  complaint,  or  by 
answer  if  it  does  not  so  appear,  and  compel  the  omitted 
party  to  be  brought  into  court.'  This  rule  is  consistent  with 
equity  practice  and  principles,  and  is  believed  to  have  its 
foundation  in  the  fact  that  if  a  judgment  creditor  were 
omitted,  the  title  offered  at  the  sale  would  be  defective,  and 
no  bidder  would  offer  as  much  as  for  a  perfect  title,  thereby 
causing  a  loss  to  parties  having  an  interest  in  or  a  lien  upon 
the  equity  of  redemption. 

§  164.  Judgment  creditors — Remedies  if  omitted  as 
defendants. — Whenever  a  judgment  creditor  is  omitted  as 
a  defendant  and  the  mortgaged  premises  are  sold  under 
a    decree    of    foreclosure,  his  only   remedy   is   to   redeem.* 


Proc.  §  1440.     In  point,  Bullard  v.  '  Leveridge  v.   Marsh,   30   N.   J. 

Leach,  27  Vt.  491  (1854).     In  Woods  Eq.  (3  Stew.)  59  (1878) ;  Ballard  v. 

V    Love,  27  Mich.   308  (1873),   the  Anderson,  18  Tex.  377  (1857).     See 

purchaser  at  an  execution  sale,  to  ante  %  128. 

whoui  a  sherilT's  certificate  had  been  *  Gage  v.  Brewster,  31  N.  T.  218 

issued  and  registered,  was  held  an  (1865,)  ;  Brainardv.  Cooper,  ION.  Y. 

unnecessary  party.     Short  v.  Bacon,  356  (1852);  Winebrener  v.  Johnson, 

99  N.   Y.    275    (  1885 ) ;  Smith    v.  7  Abb.  (N.  Y.)  Pr.  N.  S.  202  (1869); 

Moore,  73  Ind.  388  (1881).  Belden  v.  Blade,  26  Hun  (N.  Y.)  635 

'  Bramhall  v.  Flood,  41  Conn.  68  (1882) ;  American  Buttonhole  Co.  v, 
(1874);  Lyon  V.  Sandford,  5  Conn.  Burlington  M.  L.  Asso.,  61  Iowa, 
547  (1825)  ;  Campion  v.  Kille,  14  N.  464  (1883),  relying  upon  Anson  v. 
J.  Eq.  (1  McCart.)  229  (1862) ;  s.  c.  Anson,  20  Iowa,  55  (1865) ;  Jones  v. 
15  N.  J.  Eq.  (2  McCart.)  476  (1863) ;  Harstock,  421©wa.  147  (1875) ;  New- 
Chandler  V.  Dyer,  37  Vt.  345  (1864),  comb  v.  Dewey,  27  Iowa,  381  (1869). 
overruling  Nichols  v.  Holgate,  2  See  also  Rice  v.  Kelso,  57  Iowa,  115, 
A\k.(Vt.)l?>S  (1826),  and  the  dictum  118  (1881) ;  Wright  v.  Howell,  35 
in  Downer  V.  Fox,  20  Vt.  388(1848).  Iowa,  288.  292  (1872);  Stuart 
See  also  the  statute  of  1864.  v.  Scott,  22  Kan.  585  (1879) ;  Martin 

'People's    Bank      v.      Hamilton  v.  Fridley,  23  Minn.  13(1876);  Pratt 

Manuf.  Co.,   10  Paige  Ch.   (N.  Y.)  v.  Frear,  13  Wis.  462(1861).     As  to 

481  (1843).     See  post  §  170,  on  in-  what  amount  must  be  paid  to  redeem, 

cum b lancers  pendente  lite.  see  Iowa  Co.  v.   Beeson,  55  Iowa, 


198  OMISSION    OF   JUDGMENT    OEEDITOES.  [§  164. 

Under  the  early  New  York  decisions,  a  judgment  creditor 
was  required  to  issue  2.  fieri  facias  y  or  execution,  against  the 
equity  of  redemption  in  order  to  obtain  a  sheriff's  certificate 
of  sale  and  deed,  thereby  making  his  judgment  a  specific, 
instead  of  a  general,  lien  before  he  could  redeem  ;*  but  it  is 
now  well  settled  that  a  judgment  creditor,  omitted  as  a  party 
to  the  foreclosure,  may  redeem  directly  with  his  judgment 
as  a  general  lien,  instead  of  making  it  a  specific  lien  by 
execution  and  a  sheriff's  sale. 

Thus,  judgment  creditors  who  had  been  omitted  from  a  fore- 
closure issued  executions,  and  in  time  obtained  a  sheriff's 
deed  ;  they  then  brought  an  action  to  redeem,  and  it  was  held 
that  the  judgment  creditors,  not  having  been  made  parties  to 
the  action  by  which  the  mortgage  was  foreclosed,  were  not 
bound  by  the  decree,  and  that  the  foreclosure  as  to  them 
was  utterly  void.  The  judgment  creditors  would,  therefore, 
have  a  right  to  redeem  the  premises  from  the  purchaser  at 
the  sale  under  the  judgment  of  foreclosure,  even  though 
they  had  not  made  their  liens  specific  by  an  execution  and 
sale  upon  their  judgments.  And  the  foreclosure  being, 
under  the  decisions  of  the  Court  of  Appeals,  utterly  void  as 
to  said  judgment  creditors,  it  necessarily  follows  that  they 
had  a  right  to  issue  execution  and  to  sell  the  premises  under 
it,  in  the  same  manner  as  if  the  mortgage  had  not  been  fore- 
closed ;  and  it  further  follows  that  the  purchaser  at  said  sale, 
upon  receiving  his  deed  from  the  sheriff,  acquired  a  good 


262  (1880).     See  also  the  preceding  7  Abb.  (N.  Y.)  Pr.  K  S.  202  (1869); 

sections.     In  New  York  and  most  Niagara     Bank     v.    Roosevelt,    9 

other  states  the  redemption  must  be  Cow.   (N.  Y.)  413  (1827) ;  Arnot  y. 

within  ten  years.    See  the  cases  cited  Post,    6    Hill   (N.    Y.)    66    (1843). 

in  the  first  note  to  §  163  anU.     But  Thus,    in    Arnot    v.    Post,    6  Hill 

in  Illinois  the  redemption  must  be  (N.    Y.)   66   (1843),    Bronson,    J., 

within  seven  years  ;  Ewing  v.  Ains-  held    that    an    omitted    judgment 

worth,  53  111.  464  (1870).     See  Miller  creditor's  right  to  sell  after  the  fore- 

V.  Finn,  1  Neb.  254  (1870),  holding  closure  is  just  as  perfect  as  it  is  be- 

tliat  redemption  will  not  be  allowed,  fore,  and  a  sale  is  the  only  mode  in 

if   the    purchaser  under    the    fore-  which  he  can  assign  his  legal  rights. 

closure  offers  to  pay  the  claim  of  the  Without  a  sale  he  has  nothing  but  a 

omitted  incumbrancer.  lien,  but  by  a  sale  the  purchaser 

'  Braiiiard  v.  Cooper,  10  N.   Y.  acquires  a  real  interest  in  the  land. 
862  (1852) ;  Winebrener  v.  Johnson, 


§  165.]  OWITER   OF  mechanic's   LIEN.  199 

title  to  the  extent  of  the  right,  title  and  interest  of  the 
judgment  debtor  in  said  premises  at  the  time  of  the  docket- 
ing of  the  judgments  against  him,  or  which  he  at  any 
time   thereafter  acquired  in  the  premises.' 

At  present  a  judgment  creditor  has  the  alternative  practice 
of  redeeming  directly  under  his  general  lien,  or  of  issuing  an 
execution  and  redeeming  under  the  specific  lien  of  a  sheriff's 
deed.  A  purchaser  at  a  foreclosure  sale,  in  his  relation  to  a 
judgment  creditor,  is  deemed  merely  an  equitable  assignee  of 
the  mortgage."  A  redeeming  creditor  is  now  obliged  to  pay 
only  the  mortgage  debt,  principal  and  interest,  without  the 
costs  of  the  foreclosure  ;  but  the  purchaser  at  the  foreclosure 
sale  and  his  grantees  will  be  entitled  to  an  accounting  of 
rents,  taxes  and  disbursements  for  improvements.* 

§  165.    Mechanic's   lien,   owner   of,  necessary.  —  All 

persons  holding  mechanics'  liens,  which,  as  incumbrances 
upon  the  mortgaged  premises,  are  subsequent  to  the  mort- 
gage, are  necessary  parties  to  an  action  to  foreclose.*  It 
may  not;  always  be  easy  to  determine  whether  a  mechanic's 
lien,  as  a  lien  upon  the  premises,  is  subsequent  to  the  mort- 
gage, but  questions  affecting  that  subject  can  not  be  discussed 
here ;  for  the  purposes  of  this  work  it  is  assumed  that  the 
mechanic's  lien  is  subsequent.  A  mechanics'  lien  is  a  special 
statutory  charge  upon  real  estate,  peculiar  to  American  law; 


'  Winebrener  v,  Johuson,  7  Abb.  and  American  cases,   Gardner,  J,, 

(N.  Y.)  ■  Pr.  N.   S.   208  (1869),  per  writing  the  opinion,  concludes  that 

Freedman,  J.,   citing    and   relying  such  a  general  judgment  lien  is  sufll- 

upon  Braiuard  v.  Cooper,  10  N.  T.  cient    without    execution,   and    a 

356  (1852);  Haines  v.  Beach,  3  Johns.  sheriflf's  deed  to  make  it  specific. 

Ch.  (N.  Y.)  460  (1818).     Brainardv.  '  Brainard  v.  Cooper,  10  N  '  Y. 

Cooper  was  before  the  New  York  356  (1852) ;  Arnot  v.  Post,   6  Hill 

Court  of  Appeals  three  times  for  (N.  Y.)  67  (1843). 

argument,   and  now  stands  as  the  «  Gage  v.  Brewster,  81  N.  T.  218 

loading  case  upon  the  rights  of  judg-  (1865);  Brainard  v.  Cooper,  10  N.  Y. 

ment  creditors  who  are  omitted  as  356  (1852) ;  Winebrener  v.  Johnson] 

parties  to  a  foreclosure.    The  ques-  7  Abb.  (N.  Y.)  Pr.  N.  S.  211  (1869)! 

tion  as  to  whether  a  naked  or  a  gen-  *  Emigrant  Industrial  S.  Bank  v. 

eral  judgment  lien  is  a  sufficient  title  Goldman,  75  N.  Y.  127,  129  (1878) ; 

to  maintain  an  action  for  redemption,  Payne  v,  Wilson,   74    N.    Y.    348 

is  considered  at  length,  and  after  an  (1878) ;  Jones  v.  Harstock,  42  Iowa, 

exhaustive  review  of    the  Euglish  147  (1875). 


200  ASSIGNED    SUESEQUJLNT    LIENS.  [§  166. 

the  English  law  knows  no  such  lien.'  As  the  various  states 
have  regulations  of  their  own  concerning  mechanics'  liens, 
it  is  impossible  to  state  any  very  general  rules  affecting 
them,  except  that  a  notice  of  the  lien  is  uniformly  re- 
quired to  be  filed  in  the  oiifice  of  the  clerk  of  the  county 
where  the  premises  are  situated,  ^nd  that  a  mortgagee 
foreclosing  is  bound  to  take  notice  of  no  liens  except  those 
which  are  filed  subsequent  to  the  execution  of  his  mortgage 
and  prior  to  the  commencement  of  the  action  and  the  filing 
of  the  lis  pendens.  The  rules  of  law  and  practice  which  have 
been  stated  as  applying  to  subsequent  mortgagees  and  judg- 
ment creditors,  it  is  believed,  apply  with  equal  force  to  the 
owners  of  mechanics'  liens. 

§  i66.  Subsequent  lienor,  an  assignor  no  longer 
holding  the  incumbrance,  not  necessary.  —  No  principle 
of  law  or  practice  is  more  familiar,  than  that  only  those 
parties  who  are  interested  in  the  subject-matter  of  an  action 
should  be  brought  before  the  court.  It  is  almost  axiomatic 
that  a  subsequent  lienor,  who  has  parted  absolutely  with  his 
lien,  can  have  no  interest  in  an  action  to  foreclose  a  prior 
mortgage.  There  are  almost  no  cases  which  pointedly  sup- 
port this  proposition  ;  but  it  is  beyond  dispute,  as  reasoned 
from  analogous  cases,*  that  the  proposition  is  true.  Chancel- 
lor Kent  has  held  it  as  a  general  principle,  "that  a  person 
who  has  no  interest  in  the  suit  and  is  a  mere  witness,  against 
whom  there  could  be  no  relief,  ought  not  to  be  a  party ;" " 


'  Kneeland  on  Mechanics'  Liens,  such  a  mortgagee  and  assignor  is 

pp.  8-13.  not    a    necessary    party,    it    must 

*  Andrews  v.  Gillespie,  47  N.  Y.  certainly  follow  that  a  subsequent 

487  (1872) ;    Christie  v.  Herrick,  1  mortgagee,  who  has  parted  with  his 

Barb.  Ch.  (N.  Y.)  255(1845)  ;  Whit-  entire  interest  in  the  mortgage,  is 

ney  v.  McKinney,  7  Johns.  Ch.  (N.  not  a  necessary  party  to  an  action 

Y.)  144  (1823) ;  Ward  v.  VanBok-  brought  to  foreclose  a  prior  raort- 

kelen,  2  Paige  Ch.  (N.  Y.)  289  (1830).  gage.     Most  in  point,  see  Winslow 

These  cases  are  quoted  from  in  post  v.    ilcCall,    33  Barb.   (N.    Y.)   241 

^§  177-180.     They  uniformly  hold  (1860),   relying  upon    Wetmore    v. 

that  a  mortgagee  who  has  made  an  Roberts,    10  How.  (N.  Y.)  Pr.   51 

absolute  and  unconditional  assign-  (1855). 

ment  of  his  mortgage,  is  not  a  neces-  ^  Whitney  v.  McKinney,  7  Johns. 

Bary  party  to  an  action  brouglit  to  Ch.  (N.  Y.)  147  (1823). 
foreclose   the  same  mortgage.      If 


§  168.]  ASSIGNED    SUBSEQUENT    LIENS.  201 

and  further,  where  an  assignment  is  absolute  and  "  the 
mortgagee  parts  with  all  his  interest  in  the  mortgage,  and 
there  is  nothing  special  and  peculiar  in  the  case,  that  there 
is  no  necessity  to  make  the  mortgagee  a  party  to  a  bill  to 
foreclose." 

Moreover,  if  the  assignment  were  absolute  and  uncon- 
ditional on  its  face,  while  the  mortgagee  retained  some 
equitable  interest  in  the  mortgage,  it  would  be  unjust  and 
contrary  to  first  principles  to  hold  a  prior  mortgagee  fore- 
closing, responsible  for  not  taking  notice  of  equities  existing 
between  a  subsequent  mortgagee  and  his  assignee,  when  he 
had  no  knowledge  of  the  same.  If,  however,  knowledge  of 
such  equities  were  brought  to  the  mortgagee  foreclosing,  it 
would  be  dangerous  for  him  to  omit  either  the  assignor  or 
the  assignee  of  the  subsequent  mortgage.  If  a  junior  mort- 
gagee has  been  paid  in  full,  he  is,  of  course,  no  longer  a 
necessary  or  a  proper  defendant.'  All  that  has  been  said  in 
this  section  with  reference  to  subsequent  mortgagees  and 
the'ir  ■  assignees,  applies  with  equal  force  to  subsequent 
holders  of  judgments,  mechanics'  and  other  liens,  and  their 
assignees.* 

The  principles  of  law  stated  in  this  and  the  immediately 
succeeding  sections  are  so  axiomatic  to  the  practicing 
attorney,  and  are  so  little  discussed  by  writers  on  the  subject 
of  this  work,  that  it  may  seem  useless  to  mention  them  here; 
but  the  headings  of  these  sections  seemed  necessary  to  the 
author,  in  order  to  sustain  and  preserve  the  logical  analysis 
and  arrangement  of  the  subject.  A  slight  examination  will 
show  that  the  analysis  of  this  chapter  follows  in  many 
respects  that  of  the  first  chapter  of  this  part  of  the  work. 
The  object  of  this  is  to  embrace  every  possible  and  conceiv- 
able case  of  an  incumbrance  that  could  arise,  whether  the 
courts  have  rendered  decisions  thereupon  or  not. 


•  McHenry  v.  Cooper,  27  Iowa,  signed  his  judgment  with  a  power  of 
137(1869).  attorney,  he  was  held  a  necessary 

*  In  McKee  v.  Murphy,  34  N.  Y.  defendant,  the  power  of  attorney  not 
Supr.  Ct.  (3  J.  <fe  8.)  261  (1872),  operating  as  an  absolute  assignment, 
though  a  judgment  creditor  hart  as- 


202  EQUITABLE    OWNERS    OF   JUNIOR    LIENS.       [§167. 

§  167.  Subsequent  lienors,  holding  any  kind  of  an 
equitable  or  contingent  interest  in  the  lien,  generally 
necessary. — Whenever  a  person  holding  a  subsequent  mort- 
gage, judgment  or  other  lien  on  mortgaged  premises  assigns 
his  hen  conditionally,  as  a  collateral  security  or  otherwise, 
so  that  he  retains  an  equitable  interest  in  it,  he  is  a  necessary 
party  to  an  action  to  foreclose  a  prior  mortgage.*  The 
assignee  of  the  subsequent  mortgage  lien  is  also  a  necessary 
party.  It  is  believed,  however,  that  this  proposition  should 
be  qualified  to  the  effect,  that  the  plaintiff  to  the  foreclosure 
must  have  notice  from  the  record  or  otherwise  of  the 
character  and  conditions  of  the  assignment.  The  reason 
for  this  rule  evidently  is,  that  all  outstanding  interests  in 
the  equity  of  redemption  by  lien  or  otherwise  must  be 
reached  and  covered  by  the  action.  The  law  sustaining  the 
proposition  of  this  section  is  analogous  in  principle  to  that 
which  requires  a  mortgagor  who  has  apparently  parted  with 
his  equity  of  redemption,  but  still  holds  an  equitable  interest 
in  it,  to  be  made  a  defendant  to  a  foreclosure." 

There  is  another  line  of  cases'  which,  by  analogy,  support 
the  proposition  of  this  section.  They  uniformly  hold, 
where  a  mortgage  is  assigned  as  a  collateral  security,  and  an 
action  to  foreclose  is  commenced  by  the  assignee  or  the 
assignor,  the  other  refusing  to  become  a  co-plaintiff,  that  he 
can  and  must  be  made  a  party  defendant  to  the  action,  for 
the  reason  that  otherwise  a  pefect  decree  could  not  be 
"  made  which  would  protect  the  mortgagor  and  the  pur- 
chaser of  the  mortgaged  premises  from  any  future  claims 


'  In  Blair  v.  Marsh,  8  Iowa,  144  »  See  ante  §  123  ;  Patton  v.  Smith, 

(1859),  the  assignor  and  the  assignee  113  111.  499  (1885). 

of  a  "title  bond"  were  both  made  *  Bloomer  v.    Sturges,   58  N.  Y. 

parties  to  the  foreclosure  of  a  prior  168,  177  (1874) ;  Andrews  v.  Gilles- 

existing    mortgage,    the    title  bond  pie,  47  N.  Y.  487  (1872) ;  Christie  v. 

having  been  assigned  merely  as  a  Herrick,   1  Barb.  Ch.    (N.   Y.)  254 

collateral  security.     A  junior  mort-  (1845);  Slee  v.  Manhattan  Company, 

gagee,wlio  has  assigned  his  mortgage  1    Paige    Ch.    (N.    Y.)    48    (1828); 

as  a  collateral  security,  may  redeem  Kittle  v.  VanDyck,  1  Sanf.  Ch.  (N. 

from  a  senior  mortgagee  foreclosing;  Y.)  76  (1843).     See  post  §$  181,  182, 

Maniiiug  V.   Markoi,    19  Iowa,   103  and  the  notes  and  cases  cited. 
(1865;. 


§  1G8.J  ASSIGNEE   OF    SUBSEQUENT   LIEN.  203 

which  the  assignor  might  make.'"  If  this  law  is  good  for  a 
prior  mortgage  under  foreclosure,  why  is  it  not  equally  good 
for  a  subsequent  mortgage,  under  precisely  the  same  circum- 
stances ?  The  only  difference  is,  that  in  the  foreclosure  o£ 
the  prior  mortgage,  the  mortgagee  and  the  assignee  are 
cognizant  of  the  equities  between  them,  while  in  the  latter 
case  the  plaintiff  may  have  no  knowledge  of  the  equities 
existing  between  the  subsequent  mortgagee  and  his  assignee. 

§  i68.  Assignee  of  subsequent  mortgage,  judgment 
or  other  lien,  necessary. — A  party  who  acquires  uncondi- 
tionally, by  assignment  or  otherwise,  the  whole  of  a  junior 
mortgage,  judgment  or  other  lien  upon  mortgaged  premises, 
becomes  at  once  the  party  in  interest,  in  place  of  the  original 
lienor,  and  is  consequently  a  necessary  defendant  in  an 
action  to  foreclose  a  prior  mortgage.*  This  proposition,  like 
those  stated  in  the  two  preceding  sections,  is  deduced  from 
general  principles  of  law  quite  as  much  as  it  is  induced  as  a 
conclusion  from  adjudged  cases.  Chancellor  Walworth, 
however,  has  held  in  an  action  to  foreclose  a  mortgage,  that 
"  it  is  now  well  settled,  at  least  in  this  state,  that  after  an 
absolute  assignment  of  a  chose  in  action  the  assignee,  at  law 
as  well  as  in  equity,  is  considered  the  real  party  to  the  suit. 
A  decree  in  equity  between  the  defendant  and  the  assignee 
would  now  have  the  same  effect  in  a  court  of  law  as  if  the 
assignor  was  a  party  to  such  decree."*     **  This  court  does 


'  Christie  v.  Herrick,  1  Barb.  Ch.  sequent     judgment,    although    the 

(N.  Y.)  254, 259  (1845), ^tfr  Chancellor  assignee  was  not  made  a  defendant 
Walworth.  '  Ward  v.  VanBokkelen,  3  Paige 

» In  point,  Winslow  V.  McCall,  32  Ch.  (N.  Y.)  289,  295  (1830).  A  note 
Barb.  (N.  Y.)  241  (1860),  relying  to  this  decision  by  Mr.  Paige,  the 
upon  Wetmore  v.  Roberts,  10  How.  reporter,  gives  an  exhaustive  dis- 
(N.  Y.)  Pr.  51  (1855),  which  holds  cussion  of  the  question  of  the  assign- 
further  that  the  assignee  may  redeem,  ment  of  choses  in  action,-  citing 
the  same  as  the  original  lienor,  if  he  many  cases  in  chronological  order 
is  omitted  as  a  defendant.  In  point,  from  English  and  American  reports, 
Augustine  v  Doud,  1  111.  App.  588  showing  that  in  the  early  part  of 
(1877).  See  also  White  v.  Bartlett,  this  century  the  assignor  still 
14  Neb.  320  (1883),  where  the  assign-  remained  a  necessary  party,  while 
ment  was  not  recorded  and  the  the  assignee  was  hardly  deemed 
plaintiff  had  no  knowledge  of  it ;  proper, 
the  action  was  held  to  cut  off  the  sub- 


204  ASSIGNEE   PENDENTE   LITE.  [§169. 

not  look  at  the  nominal  parties  to  a  contract.  They  look  at 
the  real  parties  to  it  at  the  time  the  suit  is  commenced — the 
parties  in  actual  interest — and  recognize  their  rights  in 
the  same  manner  as  if  the  contract  was  executed  by  or  to 
them.  Thus  the  assignee  of  a  chose  in  action  is  recognized 
as  the  real  party,  and  this  court,  rejecting  all  legal  fictions, 
treats  him  as  such,  and  insists  that  the  suit  shall  be  brought 
in  his  name.'"  The  law  supporting  the  proposition  stated  in 
this  section  is  analogous  to  that  which  makes  the  purchr^ser 
and  owner  of  the  equity  of  redemption  by  grant  from  a 
mortgagor  a  necessary  party  to  a  foreclosure ;'  the  only 
difference  being  that  in  the  latter  case  the  defendant  holds 
the  fee  title,  while  in  the  former  he  held  only  a  lien  on  the 
fee. 

§  169.  Assignee  of  subsequent  mortgage  or  lien  pen- 
dente lite  not  necessary. — A  person  who  during  the 
pendency  of  an  action  to  foreclose  a  mortgage  purchases  a 
mortgage,  judgment  or  other  incumbrance  upon  the  mort- 
gaged premises,  which  is  subsequent  in  its  lien  to  the  mortgage 
under  foreclosure,  is  not  a  necessary  party  to  the  action,  and 
the  plaintiff  will  not  be  obliged  to  bring  such  a  purchaser 
before  the  court  ;^  the  purchaser  may,  however,  as  he 
succeeds  to  all  the  rights  of  the  subsequent  lienor,  appear 
and  defend  in  the  name  of  the  party  from  whom  he  acquires 
his  lien,  or  be  substituted  on  application  in  his  place.*  The 
statutory  enactments  of  the  Code,  which  were  discussed  in 


'  Western  Reserve  Bank  v.  Potter,  133,  where  a  discussion  of  the  com- 

Clarke  Ch.  (N.   Y.)  437  (1841),  per  mon  law  doctrine  of  lis  pendens  smd 

Vice-Chancellor  Whittlesey.  of  the   statutory  enactments  in  the 

'  See  ante  %%  126,  127.  various  states  is  given.     It  may  be 

*  In  point.  Case  v.  Bartholow,  21  generally  stated  that  the  princi])le3 
Kan.  800  (1878),  where  a  subsequent  of  law  there  presented,  as  applying 
mortgage  was  purchased  pending  to  the  purchaser  of  the  equity  of 
the  foreclosure  of  a  prior  mortgage.  redemption  in  mortgaged  premises 

*  Sec  Koch  V.  Purcell,  45  N.  Y.  during  an  action  to  foreclose,  apply 
Supr.  Ct.  (13  J,  &  S.)162(1879),  asto  also  to  the  purchaser  of  a  lien  on  the 
the  rights  of  such  an  assignee  with  same  equity  during  the  foreclosure, 
reference  to  the  action,  and  any  sur-  The  statute  of  lis  pendens  in  New 
plus  arising  on  tli«  sale.  See  Fisher  York  also  imquestiouably  supports 
on  Mortgages,  ^ii  380,  388,  and  the  this  proi)osilioa. 

Ejiglish  cases  cilcd.    See  a/de  §p!  131 , 


§170.]  ASSIGNEE    PENDENTE    LITE.  2U5 

the  preceding  chapter  as  applying  to  the  equity  of  redemp- 
tion, apply  with  equal  force  to  liens  upon  that  equity.' 

To  sustain  the  proposition  stated  in  this  section,  resort  must 
be  had  to  the  principle  of  analogy,  as  there  are  no  reported 
cases  bearing  directly  upon  the  point.  As  has  been  shown, 
the  purchaser  of  the  equity  of  redemption  in  mortgaged 
premises,  during  the  pendency  of  an  action  to  foreclose,  is 
not  a  necessary  defendant  ;*  no  reason  presents  itself  why 
the  purchaser  of  a  lien  on  the  same  equity  of  redemption 
under  similar  circumstances  should  be  made  a  defendant.  It 
is  assumed,  of  course,  that  the  assignor  of  the  purchaser 
pendente  lite  is  a  party  defendant  to  the  action  ;  a  pur- 
chaser pendente  lite,  if  his  assignor  is  not  a  party  to  the 
action,  is  no  more  bound  by  the  decree  of  foreclosure  than 
the  assignor  himself  would  be.  The  assignee  of  a  mortgage 
is  an  incumbrancer  within  §  1671  of  the  New  York  Code  of 
Civil  Procedure,  and  if  he  takes  title  by  assignment  after,  or 
records  his  assignment  subsequently  to,  the  filing  of  a  lis 
pendens,  he  is  chargeable  with  notice.' 

§  170.  Incumbrancer  pendente  lite  not  necessary. — 
Likewise  it  is  reasoned  by  analogy  that  a  person  who  obtains 
a  lien  by  mortgage,  judgment*  or  otherwise  upon  the  equity 
of  redemption  in  mortgaged  premises,  during  the  pendency  of 
an  action  to  foreclose,  is  not  a  necessary  party  to  the  action, 
providing  it  was  commenced*  or  the  lis  pendens  was  filed* 
before  the  Hen  was  obtained  or  recorded.^  In  such  a  case 
however,  while  the  plaintiff  is  not  bound  to  bring  the 
incumbrancer  before  the  court,  the  incumbrancer  himself 
may  intervene  by  petition  at  any  time  before  the  sale,  and 
if  allowed  by  the  court  to  come  in  at  all,  he  will  obtain 


'  See  ante  §  133.  «  Lyon  v.  Sanford,  5  Conn.   548 

•  See  ante  §  132.  (1825). 

»  Lamont  v.  Cheshire,  65  N.  Y.  30  « ^^'uller  v.  Scribner,  16  Hun  (N. 

(1875) ;  Hovey  v.  Hill,  3  Lans.  (N.  Y.)  180  (1878) ;  afl'd  76  K  Y    190 

Y.)  167  (1870).  (1879). 

*  Montgomery  v.  Birge,  31  Ark.  ^  Bank  of  U.  S.  v.  Carroll,  4 
491  (1876) ;  Linn  v.  Patton,  10  W.  B.  Mon.  (Ky.)  50  (1843).  See  ante 
Va.  187  (1877).  S 133. 


2Ut)  LIENOR   PENDENTE   LITB.  [§  170. 

as  good  and  perfect  a  standing  in  the  case  as  any  other 
party,  and  may  defend  if  he  has  a  defense  to  offer.* 

A  lis  pendens  is  not  effective  until  the  complaint  is  filed, 
and  the  complaint  can  not  be  filed  nunc  pro  tunc  so  as  to 
affect  the  rights  which  a  judgment  creditor  may  have 
acquired  in  the  meantime."  In  a  case  where  a  judgment 
had  been  recovered  and  docketed  against  the  owner  of  the 
equity  of  redemption  in  mortgaged  premises,  after  the  filing 
of  a  lis  pe7idens  and  the  service  of  the  summons  upon  one  or 
more  of  the  defendants,  but  prior  to  the  service  upon  the 
owner  of  the  equity,  the  court  would  not  relieve  the  bidder 
at  the  sale  of  his  bid,  on  the  ground  of  a  defect  of  parties  to 
the  action ;  the  judgment  creditor  was  not  a  necessary  party.* 

In  another  case,  where  no  lis  pendents  had  been  filed 
and  a  judgment  was  recovered  and  docketed  between  the 
time  of  entering  the  decree  of  foreclosure  and  the  day  of 
sale,  it  was  held  that  the  judgment  creditor  could  merely 
redeem  at  any  time  before  the  sale,  but  that  thereafter  his 
rights  would  be  effectually  barred.*  In  the  foreclosure  of  a 
senior  mortgage  the  owner  of  a  junior  recorded  mortgage 
was  omitted  as  a  party,  as  the  deed  from  the  original  mort- 
gagor to  the  person  executing  the  junior  mortgage  had  not 
been  recorded,  and  the  senior  mortgagee  had  no  notice  of 


•  F.  and  M.  Bank  ©f  Milwaukee  v.  but  refused  to  allow  the  judgment 

Luther,   14    Wis.    96   (1861).      See  creditor  to  intervene,  for  the  reason 

People's  Bank    v.   Hamilton   Mfg.  that  his   petition    did   not  state   a 

Co.,  10  Paige  Ch.  (N,  Y.)  481  (1843),  defense  in  proper  form. 

•where  a  creditor  obtained  a  judg-  *  Weeks  v.  Tomes,  16  Hun  (N.Y.) 

ment  against  the  owner  of  the  equity  349  (1878) ;  aff'd  76  N.Y.  601  (1879). 

of   redemption,  and    docketed    the  "  Fuller  v.  Scribner,  76  N.  Y.  190 

same  about  a  week  after  the  decree  (1879),   afE'g   16    Hun  (N.   Y.)  180 

of  foreclosure  was  entered,  but  before  (1878),  and  distinguishing  Rogers  v. 

the  sale ;    a  lis  pendens  had   been  Bonner,  45  N.  Y.  379  (1871);  the 

duly  filed  at  the  commencement  of  judgment  creditor  was  a  subsequent 

the  action.     Execution  was  issued  incumbrancer  within  the  meaning  of 

and  the  judgment  creditor  bid  in  the  §§1670  and  1671  of  the  N.  Y.  Code 

premises  ;  he  thereupon  presented  to  of  Civil  Procedure, 

the  court  his  petition,  setting  forth  *  McHenry  v.   Cooper,  27  Iowa, 

all  the  facts  of  the  case   and  his  137,  146  (1869).    See  Pratt  v.  Pratt, 

defense.  Chan  cellor Walworth  recog-  96  111.  184  (1880),  where  a  second 

nized  the  petition,  and  held  it  to  be  mortgage  was  executed  pending  a 

the  proper  practice  and  procedure,  foreclosure. 


§§  171-172.]    LIENOE A  MAERIED   WOMAN.  207 

the  deed  or  subsequent  mortgage  from  the  record  or  other- 
wise ;  the  rights  of  the  junior  mortgagee  were  held  concluded 
and  cut  off  by  the  action.'  In  another  case  the  owner  of  a 
recorded  unindexed  second  mortgage  was  omitted  as  a  party 
defendant  to  the  foreclosure  of  a  prior  mortgage,  and  the 
foreclosure  was  held  void  as  to  him.' 

§  171.  Subsequent  mortgagee  or  lienor  a  married 
woman  does  not  alter  rule ;  necessary. — Mortgages,  judg- 
ments and  all  other  liens  upon  real  estate  are  now  unques- 
tionably personal  property.  At  common-law  the  husband 
became  upon  marriage  the  owner  of  his  wife's  personal 
property,  including,  of  course,  mortgages,  judgments,  etc., 
even  though  they  were  placed  in  his  wife's  name  after 
marriage.  In  an  action  to  foreclose  a  prior  mortgage  the 
husband  of  a  woman  who  held  a  subsequent  incumbrance 
was,  undoubtedly,  necessary  as  a  party  defendant  to  the 
action ;  she  also  was  a  necessary  party.  The  common-law 
rule  has,  however,  been  so  completely  superseded  that  it  is 
believed  there  is  no  state  in  America  where  it  is  now  in 
force.  It  is  safely  asserted  that  the  husband  of  a  feme 
covert,  who  holds  a  subsequent  lien  upon  premises  under 
foreclosure  by  a  prior  mortgagee,  is  not  a  necessary  party 
to  the  action.  The  wife,  however,  who  holds  the  lien  in  her 
own  name,  is  always  as  necessary  a  party  as  though  she  were 
a  feme  sole*  Likewise,  the  wife  of  a  person  holding  a  subse- 
quent lien  is  not  a  necessary  party,  as  she  has  no  interest 
in  it.* 

§  172.  Heirs,  devisees,  legatees  and  annuitants  of 
deceased  subsequent  lienor  generally  not  necessary. — 

Under  the  statutes  of  no  state  do  the  heirs  at  law  receive 
the  legal  title  and  possession  of  the  personal  property  of  a 
deceased  person.  It  is  the  theory  of  American  law  that 
upon  a  person's  death  the  title  to  all  his  personal  property 


"  Kipp  V.  Brandt,  49  How.  (N.  Y.)         •  See  ante  §§  159-164. 
Pr.  358  (1875).  «  See  Kay  v.  Whittaker,  44  N.  Y. 

»  Mutual  Life  Ins.  Co.  v.  Dake,  1      565  (1871). 
Abb.  (N.  Y.)  N.  C.  380  (1876) ;  aff'd 
87  N.  Y.  257  (1881). 


208  HEIRS    OF   SUBSEQUENT   LIENOR.  [§  173. 

vests  in  an  executor  or  administrator,  while  the  title  to  his  real 
property  always  vests  in  his  heirs  or  devisees.  Consequently 
the  heirs  and  devisees  of  a  decedent,  who  held  a  subsequent 
lien  upon  mortgaged  premises,  are  neither  necessary  nor 
proper  parties  to  an  action  to  foreclose  a  prior  mortgage.* 

In  an  action  where  the  heirs  and  the  personal  represen- 
tatives of  a  deceased  subsequent  mortgagee  were  all  made 
parties  to  the  foreclosure  of  a  prior  mortgage,  it  was  held, 
where  the  question  was,  whether  the  plaintiff  could  tax 
costs  for  five  defendant  heirs,  that  "there  was  no  necessity 
nor  any  apparent  excuse  for  making  the  five  children  of  the 
subsequent  mortgagee  parties.  The  executor  fully  repre- 
sented the  rights  of  the  decedent  as  a  junior  mortgagee,  and 
the  heirs  at  law  should  not  have  been  made  defendants. 
The  extra  costs  of  making  them  parties  must  therefore  be 
disallowed."'  The  same  proposition  is  also  true  of  devisees, 
legatees  and  annuitants,  under  a  will,  for  they  take  no  title 
to  the  subsequent  lien,  as  it  passes  at  once  to  the  executor, 
unless  it  is  bequeathed  specifically  to  the  devisee,  legatee  or 
beneficiary,  in  which  case  he,  as  the  immediate  owner  of  the 
same,  would  become  a  necessary  defendant.  The  benefi- 
ciary, in  such  a  case,  takes  title  directly,  as  he  would  by  a 
specific  assignment  from  the  testator  in  his  life-time.* 

§  173.  Executors  and  administrators  of  a  deceased 
subsequent  lienor  necessary. — As  has  been  previously 
stated,  the  entire  personal  estate  of  a  decedent,  both  at  law 
and  in  equity,  including  mortgages,  judgments  and  all  kinds 
of  liens  upon  real  estate,  vests  in  his  personal  representatives, 
— that  is,  in  his  executors  or  administrators.  Without 
exception  in  any  state  in  the  Union,  the  executor  or  admin- 
istrator takes  the  entire  legal  title  to  all  kinds  of  liens 
created  upon  real  estate.  Of  course,  the  title  which  a 
personal  representative  has  in  the  goods  of  a  decedent  is  not 


'  Shaw  V.  McNish,  1  Barb.  Ch.         •  In  Jeneson  v.  Jeneson,  66  111. 

(N.  Y.)328  (1846).    See  ante  %%  141-  260  (1872),  a  decedent  gave  one  of 

144,  and  the  cases  cited.  several  notes  secured  by  a  mortgage 

*  Shaw  V.  McNish,  1  Barb.  Ch.  to  an  heir,  who  was  held  a  necessary 

(N.  Y.)  338  (1846),  per  Chancellor  defendant  to  the  foreclosure  of  a 

Walworth.  prior  mortgage. 


§  l7o.]  EXECUTORS    OF   SUBSEQUENT   LIENOR. 


209 


the  absolute  ownership  which  a  person  has  in  his  own 
property ;  nevertheless,  the  law  treats  the  personal  represen- 
tative as  the  absolute  owner,  with  full  control  and  power  of 
disposition,  as  if  the  property  were  his  own. 

It  easily  follows  that  the  executor  of  a  deceased  sub- 
sequent mortgagee  or  lienor,  is  a  necessary  defendant  in 
an  action  to  foreclose  a  prior  mortgage,  representing,  as  he 
does,  the  entire  interest  of  the  junior  lienor.*  If  a  subsequent 
lien  is  specifically  bequeathed,  the  beneficiary  becomes  a 
necessary  party  in  place  of  the  executor.  If  a  subsequent 
lienor  dies  during  the  pendency  of  an  action  to  foreclose, 
the  action  must  be  revived  against  his  personal  represen- 
tatives. It  is  intimated  that  if  a  deceased  subsequent  lienor 
is  a  non-resident  of  the  state,  the  plaintiff  foreclosing  may 
take  out  letters  of  administration  for  the  purposes  of  the 
action  in  the  county  where  the  mortgaged  premises  are 
situated  ;'  but  provision  is  made  in  the  practice  of  most 
states  for  serving  the  summons  upon  non-residents  by  publi- 
cation or  otherwise. 

If  no  administrator  or  executor  has  been  appointed  or  has 
qualified  as  the  personal  representative  of  a  deceased  subse- 
quent mortgagee  or  lienor,  it  is  doubtful  whether  the  plaintiff 
foreclosing  a  prior  mortgage  can  properly  and  safely  rely 
upon  making  only  the  heiis  at  law  and  next  of  kin  of  the 
subsequent  lienor  parties  defendant  to  the  action.  This 
practice  is  sometimes  resorted  to  where  the  heirs  at  law  and 
next  of  kin  are  few  in  number  and  can  be  easily  served  ; 


'  Lockman  v.  Reilly,  95  N.  Y.  64  ante  §§  141-144.     In  Lockman   v, 

(1884);   Shaw  v.  McNish,  1  Barb.  Reilly,    95   N.   Y.    64   (1884),    'per 

Ch.  (N.  Y.)  326  (1846),  quoted  from  Rapallo,     J.,     the    premises    were 

in  the  preceding  section  ;  Ger.  Sav.  bought  in  by  an  executor  who  was 

Bank  v.  Muller,    10  K  Y.   Week.  plaintiff    in    the    foreclosure    of    a 

Dig.  67  (1880);  White  v.  Rittemeyer,  junior  mortgage  ;  on  the  foreclosure 

30  Iowa,  268,  272  (1870),  citing  many  of  the  senior  mortgage  the  executor 

caaes    and    authorities.     Shields  v,  of  the  junior  mortgagee  was  held 

Keys,  24  Iowa,  298,  307  (1868),  was  the  only  necessary  defendant,  as  tha 

a  foreclosure  of  a  mechanic's  lien,  real  estate  was  to  be  regarded  as 

citing    Baldwin  v.    Thompson,  15  personalty. 

Iowa,    504  (1864),    and  Burton    v.  *  In  point,  Lothrop's  Case,  33  N. 

Hintrager,  18  Iowa,  348  (1865).    See  J.  Eq.  (6  Stew.)  246  (1880). 


21'»  SUBSEQUEISTT   IJENOE BANKKUPT.  [§  174. 

tliey  are,  indeed,  the  actual  and  ultimate  owners  of  the 
subsequent  lien,  but,  as  has  been  seen,  they  are  neither 
necessary  nor  proper  parties  where  there  is  a  personal  repre- 
sentative.* Even  though  it  may  be  inconvenient,  and  may 
often  necessitate  considerable  delay,  it  is  nevertheless  the 
safest  practice  and  the  one  here  recommended,  to  cause  an 
administrator  of  such  deceased  subsequent  lienor  to  be 
appointed  before  the  action  to  foreclose  is  commenced,  or  at 
least  before  it  proceeds  to  judgment.' 

§  174.  Assignee  in  bankruptcy  and  voluntary  general 
assignee  of  subsequent  lienor  necessary. — The  case  of 
Bard  v.  Poole'  holds  quite  pointedly  that  an  assignee  in 
bankruptcy,  who  receives  from  his  assignor  an  interest  in  a 
mortgage,  is  a  necessary  defendant  in  an  action  for  the  fore- 
closure of  a  prior  mortgage.  To  sustain  the  proposition  of 
this  section,  resort  is  again  had  to  reasoning  by  analogy, 
upon  which  so  much  of  this  chapter  is  dependent.  The 
same  rules  and  illustrations,  which  have  shown  an  assignee 
in  bankruptcy  of  the  owner  of  the  equity  of  redemption*  in 
mortgaged  premises  to  be  a  necessary  defendant  in  an  action 
to  foreclose,  apply,  it  is  believed,  with  equal  force  to  an 
assignee  in  bankruptcy  of  a  person  holding  a  lien  upon  the 
same  equity  of  redemption  ;  the  assignee  is  equally  a  neces- 
sary party  in  both  cases.*  The  same  rules  apply  to  assignees 


See  the  preceding  eection  ;  •  13  N.  T.  495,  507  (1855),  per 
Fisher  on  Mortgages,  §  359;  Whittla  Denio,  J. 
V.  Halliday,  4  Dm.  and  War,  267  *  See  ante  %  152. 
(1827).  *  Reference  is  had  to  §  168  ante, 
*  In  point,  Lothrop's  Case,  33  N.  where  it  appears  that  the  assignee  of 
J.  Eq.  (8  C.  E.  Gr.)  246(1880),  where  a  subsequent  lien  by  sale  and  trans- 
limited  administration  was  granted  fer  is  a  necessary  party.  The  same 
for  the  purposes  of  the  foreclosure,  title  and  interest  being  transferred 
See  Koger  v.  Weakly,  2  Port.  (Ala.)  to  an  assignee  in  bankruptcy,  no 
616  (1835) ;  Coursen's  Will,  4  N.  J.  reason  presents  itself  why  the 
Eq.  (3  H.  W.  Gr.) 408 (1843).  In  pomt,  assignee  in  bankruptcy  is  not  also  a 
Fisher  on  Mortgages,  §  369.  See  necessary  defendant.  From  the 
Long  V.  Storie,  23  L.  J.  Ch.  N.  S.  proposition  presented  in  §§  126-128 
200  (1853),  where  a  creditor  was  ap-  ante,  the  reasoning  by  analogy  be- 
pointed  administrator  for  the  pur-  comes  even  stronger, 
poses  of  the  action. 


§§  175-176.]    JUNIOR  LIENOR INFANT,  ETC.  211 

by  voluntary  general  assignment  and  to  receivers  of  insol- 
vent corporations.  If  the  assignee  dies  pending  the  fore- 
closure and  after  having  been  made  a  defendant,  the  action 
must  be  revived  against  his  successor  in  office,  or  the  right 
to  redeem  will  survive  to  the  successor.' 

§  175.  General  guardian  of  infant,  and  committee  of 
lunatic,  idiot  or  habitual  drunkard,  trustees  and  benefi- 
ciaries, holding  subsequent  mortgage  or  lien,  necessary. 
— If  a  subsequent  mortgage  is  drawn  in  the  name  of  the 
general  guardian  or  committee  of  an  incompetent  person, 
the  guardian  or  committee  will,  unquestionably,  be  a  neces- 
sary party  defendant  in  an  action  to  foreclose  a  prior  mort- 
gage, and  the  beneficiary  will  also  be  a  very  proper,  if  not  3 
necessary,  party."  If,  however,  the  subsequent  lien  is 
executed  or  recovered  in  the  name  of  the  beneficiary,  then 
the  infant,  lunatic,  idiot  or  habitual  drunkard  will  be  a 
necessary  party  in  his  own  name,  without  his  guardian  of 
committee  appearing  as  a  party  to  the  action.  The  process 
of  the  court,  however,  is  generally  required  to  be  served 
upon  the  guardian  or  committee  as  well  as  upon  the  incom- 
petent person.* 

§  176.  Purchasers  at  tax  sales,  boards  of  supervisors, 
state  comptrollers  and  municipal  corporations,  defen- 
dants.— It  is  a  universal  principle  of  law  that  unpaid  taxes 
are  a  lien  upon  the  real  estate  against  which  they  are  assessed 
prior  to  mortgages,  judgments  and  all  other  incumbrances 
When  real  estate  is  sold  for  the  satisfaction  of  unpaid  taxes, 
the  purchaser  likewise  acquires  a  title  that  is  good  against  all 


'  Avery  v.  Ryerson,  34  Mich.  363  decree,  they  being  too  numerous  to 

(1876).  be  brought  into  the   action.      See 

*  InWillink  v.  Morris  Canal  Bank-  Loehr  v.  Colborn,  93  Ind.  24  (1883) 

lag  Co.,  4  K  J,  Eq.  (3  H.  W.  Gr.)  377  Shinn  v.  Shinn,  91  III.  477  (1879) 

(1843),  the  trustees  and  cestuis  que  also  the  English  cases,    Wetherell 

fc'MS^  were  both  held  necessary  defen-  v.  Collins,  3  Madd.  255  (1818),  and 

dants ;    but    in    Iowa    County    v.  Osbourn  v.  Fallows,  1  Russ.  &  M. 

Jlineral  Point  R.    R.,   24  "Wis.    93  741    (1830),    stating    circumstances 

(1869),  it  was  held  sufficient  to  make  under  which  the  beneficiaries   are 

t'le  trustee  representing  the  bond-  not  necessary  parties, 

holders  a  defendant,  and  that  the  ^  N.  Y.  Code  Civ.  Proc.  §  426. 
bondholders  would  be  bound  by  the 


212  PURCHASERS    AT   TAX    SALES.  [§176. 

pre-existing  incumbrances  to  the  extent  of  his  purchase 
price,  unless  divested  by  an  incumbrancer  redeeming. 

Purchasers  at  general  tax  sales,  and  states,  counties  and 
cities,  for  whose  benefit  any  unpaid  tax  was  levied,  are 
not  necessary  parties  to  the  foreclosure  of  a  mortgage 
upon  the  premises  taxed  ;  but  they  are  very  proper  par- 
ties as  prior  incumbrancers  for  the  purpose  of  determin- 
ing the  exact  amount  of  their  claims,  and  of  having  them 
extinguished  as  liens  upon  the  property,  by  a  provision 
in  the  judgment  for  their  payment  out  of  the  proceeds  of 
the  sale.*  A  purchaser  at  a  tax  sale  will  not  be  affected 
by  the  subsequent  foreclosure  of  a  mortgage  to  which  he  is 
not  made  a  party."  The  purchaser's  title  is  absolute  and 
prior  to  the  mortgage,  subject  only  to  be  redeemed  by  the 
mortgagee.  Under  the  rulings  of  the  courts  it  is  clearly 
the  best  practice  to  make  purchasers  at  tax  sales,  the  owners 
of  tax  certificates,  and  all  parties,  domestic  corporations  and 
others,  having  any  interest  in  unpaid  taxes,  parties  defendant 
to  a  foreclosure,  that  their  claims  may  be  ascertained  and  paid.* 

Provision  is  made  in  the  New  York  Code  of  Civil  Pro- 
cedure and  in  the  statutes  of  some  other  states,  requiring 
the  referee  to  sell,  or  the  master  in  chancery,  to  pay  all 
outstanding  taxes,  assessments,  water  rates,  etc.,  from  the 
proceeds  of  the  sale.*  Where  such  provision  can  be  made 
in  the  decree  of  sale,  it  is  not  so  desirable  to  make  parties 
holding  tax  certificates  defendants  to  the  foreclosure. 


'  Roosevelt  Hospital  v.  Dowley,  Iowa,   411   (1867).      See    Straka  T. 

57  How.  (K  Y.)  Pr.  489  (1878).  ;)er  Lander,    60    Wis.    115   (1884),    in 

VanVorst,  J.     See  post  chap.  ix.  which  action   to   foreclose,  it  was 

*  Becker  v.  Howard,  66  N.  Y.  5,  8  alleged  that  a  tax  deed  of  the  prem. 
(1876).  But  see  Adair  v.  Mergen-  ises  had  been  issued  to  one  of  the 
theim,  (Ind.)  13  West.  Rep.  852  defendants  and  that  the  plaintiffs 
(1888).  had  redeemed  from  the  tax  liens. 

*  See  the  cases  supra ;  Becker  v.  The  municipality  which  issued  the 
Howard,  4  Hun  (N.  Y.)  359  (1875),  tax  deed  was  held  not  to  be  a  neces- 
per  E.  Darwin  Smith,  J. ;  Ayres  v.  sary  party ;  the  question  of  the 
Adair  County,  61  Iowa,  728  (1883),  validity  of  the  deed  or  of  the  redemp- 
per  Adams,  J.,  discussing  at  length  tion  could  not  be  determined  in  the 
the  rights  of  a  purchaser  at  a  tax  foreclosure. 

sale  in  relation  to  a  pre-existing  mort-  *  N.  T.  Code  Civ.  Proc.  §  1676. 
gage.      See    Crum   v.    Cotting,   22 


CHAPTEE  VIIL 

PAKTEES  DEFENDANT— NECESSARY  TO  PERFECT  THE  TITLE. 

PARTIES    HOLDING   PART  OR  EQUITABLE   INTERESTS  IN  THE  MORT- 
GAGE UNDER  FORECLOSURE,  OR  IN  LIENS  CONTEMPORARY 
THEREWITH,  NOT  JOINING  AS  PLAINTIFFS, 
NECESSARY  DEFENDANTS. 


^177.  IntTodiictory. 

178.  Assignor,   having    made   an 

absolute  assignment  of  the 
mortgage  or  no  longer  hold- 
ing an  interest  in  it,  not 
necessary. 

179.  Assignor  —  "When    a  prober 

and  desirable  party. 

180.  Assignee  of  a  mortgage  abso- 

lutely assigned,  never  a 
necessary  defendant. 

181.  Assignor    of     a    mortgage, 

assigned  conditionally  or 
as  collateral  security,  a  nec- 
essary party. 

182.  Assignee  of  a  mortgage  as- 

signed collaterally,  a  neces- 


sary defendant  in  foreclos- 
ure by  the  assignor. 

183.  Joint  or  several  mortgagees; 

action  commenced  by  one, 
the  others  necessary  defen- 
dants. 

184.  Contemporary     and     equal 

mortgagees  ;  foreclosure 
commenced  by  one,  others 
necessary  defendants. 

185.  Ownership      of      mortgage 

doubtful  or  in  dispute  ; 
action  commenced  by  one 
claimant,  other  claimants 
advisable  defendants. 

186.  Trustees    and     beneficiaries 

sometimes  necessary  defen- 
dants. 


§  177.  Introductory. — In  the  two  preceding  chapters, 
attention  has  been  given  to  those  parties  who  were  necessary 
defendants  in  an  action  to  foreclose  a  mortgage,  in  order  to 
extinguish  the  entire  equity  of  redemption  and  all  the  liens 
that  had  accrued  upon  it  since  the  execution  of  the  mort- 
gage. It  sometimes  occurs  that  a  mortgage  is  held  by  joint 
owners,  or  that  there  are  liens  contemporary  with  it,  or  that 
it  is  assigned  collaterally  or  conditionally,  whereby  equitable 
questions  arc  raised  as  to  its  true  ownership.  Part  owners 
and  others  having  equitable  interests  in  the  mortgage  under 
foreclosure  may  refuse  to  join  as  co-plaintiffs.  In  such  cases 
it  is  always  n.icessary  to  make  them  defendants,  that  their 
interests  may  be  extinguished.  This  rule  is  based  upon  the 
general  principle  which  was  early  considered'  in  this  work, 


See  ante  §  70. 


21? 


214  rNTEODUCTORY.  [§  177. 

that  all  parties  interested  in  the  mortgage  or  in  the  mort- 
gaged premises  are  necessary  parties,  plaintiff  or  defendant, 
in  an  action  to  foreclose.  It  is  also  a  well  recognized  rule, 
especially  in  equitable  actions,  that  a  person  interested  in 
the  subject-matter  of  an  action,  who  refuses  to  become  or 
who  is  omitted  as  a  co-plaintiff,  may  be  made  a  defendant.' 

It  is  to  be  observed  that  the  parties  defendant  discussed 
in  this  chapter  could  equally  well  be  parties  plaintiff,  with  one 
or  two  exceptions;  and  that,  being  omitted  or  refusing  to  join 
as  parties  co-plaintiff,  they  become  absolutely  necessary 
parties  defendant  in  an  action  to  foreclose,  in  order  to 
produce  at  the  sale  a  perfect  title  and  to  accomplish  the 
purposes  for  which  a  party  is  necessary,  as  repeatedly 
stated  in  this  part  of  the  work.  Chancellor  Walworth,  in 
considering  the  necessity  of  making  a  party  holding  an 
equitable  interest  in  the  mortgage  a  party  to  the  action  in 
order  to  produce  a  perfect  decree  for  the  purchaser  at  the 
sale,  has  held:  "Where  the  mortgage  is  assigned  as  a  mere 
security  for  the  payment  of  a  debt,  or  where  but  a  part  of 
the  mortgage  debt  is  assigned  to  the  plaintiff,  the  assignor 
is  a  necessary  party  to  a  bill  filed  to  foreclose  the  mortgage, 
so  that  a  perfect  decree  may  be  made  which  will  protect  the 
mortgagor  and  the  purchaser  of  the  mortgaged  premises 
under  the  decree  to  be  made  in  the  suit,  from  any  future 
claims  which  the  assignor  may  make,  notwithstanding  his 
assignment.'"  A  conveyance  upon  a  foreclosure  sale,  to 
produce  this  result,  must  convey  the  entire  interest  of  the 
mortgagor  and  the  mortgagee,  and  be  an  entire  bar  against 
each  of  them  and  against  all  persons  claiming  under  them. 

The  New  York  Code  of  Civil  Procedure  provides  "  that  a 
conveyance  upon  the  sale,  made  pursuant  to  a  final  judgment 
in  an  action  to  foreclose  a  mortgage  upon  real  property, 
vests  in  the  purchaser  the  same  estate,  only,  that  would 
have  vested  in  the  mortgagee,  if  the  equity  of  redemption 
had  been  foreclosed.     Such  a  conveyance  is  as  valid,  as  if  it 


•  N.  Y.  Code  Civ.  Proc.  §  448.  Ilobart  v.  Abbot,  3  F    Wms.   643 

«  Christie  v.  Herrick,  1  Barb.  Ch.  (1731) ;    N.    Y.    Codf    ^Av.    Proc. 

(N.  Y.)  259  (1845) ;  Johnson  v.  Hart,  §  1632. 

3  Johns.   Cas.  (N.  Y.)  322  (1802)  ; 


§  178.]  ASSIGNOR — WHEN   NOT   NECESSARY.  215 

was  executed  by  the  mortgagor  and  the  mortgagee,  and  is 
an  entire  bar  against  each  of  them,  and  against  each  party 
to  the  action  who  was  duly  summoned,  and  every  person 
claiming  from,  through  or  under  a  party,  by  title  accruing 
after  the  filing  of  the  notice  of  the  pendency  of  the  action, 
as  prescribed  in  the  last  section."*  It  is  apparent  then  that 
if  any  person,  who  holds  an  interest  in  the  mortgage  under 
foreclosure,  as  part  owner  or  otherwise,  is  omitted  as  a 
party  to  the  action,  the  decree  will  not  be  binding  upon  him, 
and  his  interest  will  not  be  cut  off;  his  relation  to  the 
subject-matter  of  the  action  continues  as  though  the  action 
had  never  been  commenced. 

§  178.  Assignor,  having  made  an  absolute  assign- 
ment of  the  mortgage  or  no  longer  holding  an  interest 
in  it,  not  necessary. — When  the  owner  of  a  bond  and  mort- 
gage makes  an  absolute  and  unconditional  transfer  of  the 
same  by  assignment  or  otherwise,  he  ceases  to  have  any 
interest  in  it,  and  is,  consequently,  no  longer  a  necessary 
party  to  an  action  to  foreclose  the  mortgage ;"  neither  are 
his  heirs,  executors  or  administrators  necessary  parties.* 
An  administrator  who  assigned  a  mortgage  to  an  heir  as 


>  N.  Y.  Code  Civ.  Proc.  §  1632.  Williams    v.    Smith,    49    Me.    564 

«  Clark  V.  Mackin,  95  N.  Y.  346  (1861) ;  Miller  v.  Henderson,  10  N. 

(1884)  ;  Andrews  v.  Gillespie,  47  N.  J.  Eq.  (2  Stockt.)  320(1855).     Aliter, 

Y.  487  (1872) ;  Christie  v.  Herrick,  if  the  assignment  is  not  absolute, 

1    Barb.    Ch.  (N.  Y.)    254    (1845) ;  Larimer  v.  Clemer,  31  Ohio  St.  409 

Western    Reserve   Bank  v.  Potter,  (1877)  ;  Omohundro  v.  Henson,  26 

Clarke    Ch.    (N.    Y.)    437    (1841);  Gratt.   (Va.)    511   (1875);    Scott  v. 

Whitney  v.  McKinney,  7  Johns.  Ch,  Ludington,  14  W.  Va.    387  (1878). 

(N.   Y.)  147  (1823);    Ward  v.  Van  See    Wright    v.    Sperry,    21    Wis. 

Bokkelen,  2  Paige  Ch.  (N.  Y.)  295  331   (1867),   and  the  notes  to  ant» 

(1880)  ;  Prout  v.  Hoge,  57  Ala.  28  §§  75-77.      Fisher    on    Mortgages, 

(1870) ;  Walker  v.  Bank  of  Jlobile,  §  347,  and  the  English  authorities 

6  Ala.  453  (1844)  ;  Barraque  v.  Man-  cited. 

uel,   7  Ark.  516  (1847)  ;  JMarkel  v.  ^  But  in  North  Carolina  the  heirs 

Evans,  47  Ind.  326  (1874) ;  Gower  v.  of  the  mortgagee  are  held  necessary 

Howe,  20  Ind.  396  (1863) ;  but  held  parties    to    a    bill    of   foreclosure ; 

necessary  in  Strong  v.  Downing,  34  Etheridge  v,  Vernoy,  71  N.  C.  184, 

Ind.  300  (1870).     In  point,  Wilson  186    (1874);    s.    c.    70  N.    C.    713*; 

V.  Spring,   64  111.   14  (1872),  where  Kerchner  v.  Fairley,  80  N.    C.    25 

the  assignor  assigned  one  of  a  num-  (1879).     See  also  PuUen  v.    Heroa 

ber  of  notes  secui-ed  by  a  mortgage  ;  Mining  Co.,  71  N.  C.  567  (1874). 


216  ASSIGNOR OFTEN    DESIRABLE.  [§  179. 

part  of  his  distributive  share  of  the  decedent's  estate,  is  not 
a  necessary  party  to  a  foreclosure  brought  by  the  heir.' 
Chancellor  Kent  held,  in  1823,  that  "where  the  assignment 
is  absolute,  and  the  mortgagee  parts  with  all  his  interest  in 
the  mortgage,  and  there  is  nothing  special  or  peculiar  in  the 
case,  the  assignee  is  under  no  necessity  to  make  the  mort- 
gagee a  party  to  a  bill  to  foreclose.  The  general  principle 
is,  that  a  person  who  has  no  interest  in  the  suit,  and  who  is 
a  mere  witness,  against  whom  there  could  be  no  relief,  ought 
not  to  be  a  party."* 

Another  learned  jurist,  in  referring  to  the  history  and  the 
reasons  for  this  principle,  determined  that  it  is  **  well  settled 
that  where  there  has  been  an  absolute  assignment  of  all  the 
interest  of  the  mortgagee  in  the  debt  secured  by  the  mort- 
gage, he  is  not  a  necessary  party  to  a  bill  to  redeem,  or  to  a 
bill  of  foreclosure.  The  reason  why  it  was  formerly  consid- 
ered necessary  to  make  the  assignor  of  a  chose  in  action  a 
party  to  a  bill  in  equity  brought  by  the  assignee,  I  apprehend, 
must  have  been,  that  courts  of  law  did  not  sanction  and 
protect  such  assignments  considering  them  a  species  of 
maintenance ;  and  the  assignor,  having  the  legal  title  or 
interest  in  the  thing  assigned,  might  sustain  an  action  at 
law  thereon,  nothwithstanding  a  decree  in  equity  to  which 
he  was  not  a  party.  This  reason  has  long  since  ceased,  and 
the  above  settled  rule  is  now  in  force.'" 

§  179.     Assignor — When  a  proper  and  desirable  party. 

— If  the  assignor  has  guaranteed  the  payment  or  collection 
of  the  mortgage  debt,  he  is  a  necessary  party  defendant,  if  a 
judgment  for  deficiency  is  sought  against  him.*  If  usury, 
fraud    or   other   defenses   or   equities   existed   against    the 


'  Westerfield  v.  Spencer,  61  Ind.  (1884);   Newman    ▼.    Chapman,    2 

839(1878).  Hand.    (Va.)    93    (1823).      See  also 

^  Whitney  v.  McKiniiey,  7  Johns.  Chambers  v.   Goklwin,  9  Ves.   Sr. 

Ch.  (N.  Y.)  147  (1823) ;   Fenton  v.  269  (18U4) ;  Ward  v.  VanBokkelen, 

Hughes,  7  Ves.  287  (1802).     See  also  2  Paige  Ch.  (N.  Y.)  295  (1830),  per 

McGuffey  v.    Finlcy.   20  Ohio,  474  Chancellor  Walworth. 

( 1851 ),   and  the  notes  to  §^  75-77  *  See  post  %  233,  on  the  liability  of 

ante.  an  assignor  for  a  judgment  of  defi- 

»  Clark  V.  Mackin,  95  N.  Y.  346  ciency. 


§3  79.]  ASSIGNOR — OFTEN    DESIKABLE.  217 

mortgage  in  its  inception  or  while  the  mortgagee  held  it,  he 
will  be  as  assignor  a  very  proper,  if  not  a  necessary,  party 
to  the  foreclosure  conducted  by  his  assignee ;'  so  also,  if  the 
assignment  is  imperfect  in  form,*  or  is  by  parol,*  the  assignor 
will  be  held  a  necessary  party.  In  an  action  to  foreclose, 
brought  by  the  assignee  of  the  mortgage  debt  without  the 
mortgage,  the  assignor  has  been  held  a  necessary  defendant.* 
It  is  now  well  settled  that  one  who  transfers  a  chose  in 
action  warrants  impliedly,  at  least,  that  there  is  no  legal 
defence  to  its  collection  arising  out  of  his  own  connection 
with  its  origin.*  It  has  been  held  that  the  assignor,  under 
such  circumstances,  is  not  a  necessary  party  to  the  action, 
for  the  reason  that  upon  the  coming  in  of  the  answer  setting 
up  usury,  fraud,  or  other  defences,  the  assignee  as  plaintiff 
may  give  notice  of  such  defence  to  the  assignor  and  offer 
to  him  the  future  conduct  of  the  suit,  which  would  make 
the  judgment  binding  upon  him,  and  place  the  plaintiff  in  the 
best  possible  position  for  maintaining  an  action  against 
the  assignor  for  a  breach  of  warranty.  In  such  a  case  it 
has  been  held  that,  "  if  the  assignor  was  a  necessary  party 
to  a  complete  determination  of  the  controversy,  she  should 
have  been  so  made  under  the  provsions  of  §452,  instead  of 
depriving  the  defendant  (mortgagee)  of  a  right  to  which  he 
was  clearly  entitled,  because  of  her  absence  as  such  party. 
It  was  the  protection  of  the  interest  of  the  plaintiff 
(assignee),  and  not  that  of  the  defendant,  that  mad^  her  a 
necessary  party  if  so  at  all.  By  the  sale  and  assignment  of 
the  mortgage  to  the  plaintiff's  testator,  the  assignor 
impliedly  warranted  that  there  was  no  legal  defence  to  its 


'  Ward  V.  Sharp,  15  Vt.  115  (1843).  Strong  v.    Downing,   34    Ind.    300 

See  ante  §  77,  last  paragraph.  (1870).     See  also  ante  %%  84-86,  97, 

»  Holdridge  v.  Sweet,  23  Ind.  118  98. 

(1864).  »  Littauer  v.  Goldman,  72  N.  Y. 

3  Denby  v.  Mellgrew,  58  Ala.  147  506  (1878) ;    Andrews  v.    Gillespie, 

(1877).  47    N.   Y.   487    (1872);    Delaware 

*  In  Bibb  v.  Hawley,  59  Ala.  403  Bank  v.  Jarvis,  20  N.  Y.  226  (1859). 

(1877),  the  assignor  was  held  a  neces-  So  held  of  a  bond  and  mortgage 

sary  party  in  case  of  an  unindorsed  which  were  usurious  and  void,  and 

note  where  the  assignment  was  by  a  assigned  by  the  mortgagee ;  Ross  v. 

separate    written   instrument.     See  Terry,  63  N.  Y.  613  (1875). 


218  ASSIGNOE    OF   MORTGAGE.         [§§  180-181. 

collection  arising  out  of  its  origin.  *  *  *  But  it  was 
not  necessary  to  make  the  assignor  a  party,  to  accom- 
plish this  object.  It  is  well  settled  that  a  purchaser  of 
property,  with  a  warranty  of  title,  upon  being  sued  for  the 
recovery  thereof  by  one  claiming  a  paramount  title  thereto, 
may  give  notice  to  his  vendor  of  the  action,  and  offer  to 
him  the  conduct  of  the  defense;  and  that  upon  his  so  doing, 
the  vendor  is  bound  by  the  judgment  in  respect  to  the  title, 
whether  or  not  the  defense  is  undertaken  by  him."* 

§  iSo.  Assignee  of  a  mortgage  absolutely  assigned, 
never  a  necessary  defendant. — As  the  assignee  of  a  mort- 
gage becomes  its  absolute  owner,  he  occupies  the  position  of 
the  original  mortgagee  in  all  respects,  and  of  course  can 
sustain  no  other  relation  to  an  action  to  foreclose  than  that 
of  plaintiff."  He  is  always,  however,  a  necessary  party  to 
the  action  in  some  relation,  as  a  perfect  title  could  not  be 
offered  at  the  sale,  unless  his  interest  by  lien  were  extin- 
guished. In  an  action  by  the  mortgagor  to  redeem,  he  is, 
vicf  versa,  a  necessary  defendant,  in  place  of  his  assignor,  the 
mortgagee.' 

§  iSi.  Assignor  of  a  mortgage,  assigned  conditionally 
or  as  collateral  security,  a  necessary  party. — A  mortgagee 
who  assigns  his  bond  and  mortgage  conditionally,  as  a 
collateral  security  or  otherwise,  retaining  to  himself  at  the 
same  time  an  equitable  interest  of  any  kind,  is  a  necessary 
party  to  a  foreclosure  of  the  mortgage  instituted  by  the 
assignee;  if  he  is  not  joined  as  a  co-plaintiff,  he  will  be  a 
necessapy/-  defendant.*     The  logical  reason  for  this  rule  is. 


*  Andrews  v.  Gillespie,  47  N.  T.  *  In  re  Estate  of  Gilbert,  25  N.  T. 
492  (1872),  per  Grover,  J.  Wk.    Dig.    470    (1887) ;    Daltoa  v. 

«  Lennon  v.  Porter,  68  Mass.   (2  Smith,  86  N.  Y.   176  (1881)  ;  Union 

Gray),  473(1854),  holding  also  that  a  College  v.    Wheeler,    61   N.  Y.  88 

mesne  assignee  is  not  a  necessary  (1874)  ;   Bloomer  v.  Sturges,  58  N. 

defendant ;    Burton    v.    Baxter,    7  Y.  175  (1874)  ;  Bard  v.  Poole,  12  N. 

Blackf.  (Ind.)  297  (1844).     See  ante  Y.  495  (1855)  ;  Wes.  Res.   Bank  v. 

t^t^  73-77,  and  notes.  Potter,  Clarke  Ch.  (N.  Y.)  432  (1841); 

*  "Whitney  v.  McKinney,  7  Johns.  Johnson  v.  Hart,  3  Johns.  Cas.  (N. 
Ch.  (N.  Y.)  147  (1823),  2^er  Chancel-  Y.)  322  (1802);  Slee  v.  Manhattan 
lor  Kent.  Co.,  1  Paige  Ch.  (N.  Y.)  48  (1828) ; 


§181,]         MOIITGAGE   COLLATEEALLY    ASSIGIfED. 


210 


that  a  complete  decree  could  not  otherwise  be  made  which 
would  protect  the  mortgagor  and  the  purchaser  of  the  mort- 
gaged  premises  from  any  claims  which  the  assignor  might 
subsequently  make,  as  the  court  would  acquire  no  jurisdic- 
tion of  him,  and  an  interest  in  the  premises  would  remain 
unextinguished. 

Thus,  in  an  action  where  it  appeared  that  a  mortgagee 
had  assigned  his  mortgage  as  a  collateral  security,  and 
subsequently  made  a  general  assignmerl:  for  the  benefit 
of  creditors,  it  was  held  that  the  assignees  or  trustees 
for  the  creditors  succeeded  to  the  rights  of  the  mort- 
gagee, and  were  necessary  defendants  in  an  action  to  fore- 
close brought  by  the  pledgee  of  the  mortgage.'  Kent 
has  stated  as  cogent  reasons  why  the  assignor  should  be 
made  a  defendant  where  the  assignment  is  made  as  a  col- 
lateral security,  that  he  should  have  an  opportunity  to 
redeem  his  bond  and  mortgage  by  paying  the  debt,  and  also 
to  show,  if  he  could,  that  he  had  in  fact  paid  his  debt  and 


Kittle  V.  VanDyck,  1  Sandf.  Ch. 
(ISr.  Y.)  76  (1843).  See  Hughes  v. 
Johnson,  38  Ark.  285  (1881) ;  St. 
John  V,  Freeman,  1  lud.  84  (1848); 
Brown  v.  Johnson,  53  Me.  246 
(1865) ;  Ciitts  V.  York  Manufactur- 
ing Co.,  14  Me.  326  (1837) ;  s.  c.  18 
Me.  190  (1841) ;  Stevens  v.  Reeves, 
S3  N.  J.  Eq.  (6  Stew.)  427  (1881); 
Ackerson  v.  Lodi  Branch  R.  R.,  28 
K  J.  Eq.  (1  Stew.)  542  (1877); 
Woodruff  V.  Depue,  14  N.  J.  Eq. 
(1  McCart.)  168  (1861),  authorities 
stated  in  the  briefs  of  the  counsel ; 
Miller  v.  Henderson,  10  N.  J.  Eq. 
(2  Stockt.)  320  (1855);  Fithian  v.  Cor- 
■win,  17  Ohio  St.  118  (1866) ;  Wright 
V.  Sperry,  21  Wis.  331  (1867).  See 
Chew  V.  Brumagen,  )il  N.  J.  Eq.  (6 
C.  E.  Gr.)  520,  529  (1870),  exhaus- 
tively collating  and  reviewing  the 
New  York  cases  ;  reported  also  in 
19  N.  J.  Eq.  (4  C.  E.  Gr.)  130(1868); 
on  appeal  to  the  Supreme  Court  of 
the  United  States,  the  assignor  was 


held  not  a  necessary  party ;  the 
assignee  was  held  to  be  a  trustee  for 
him  to  the  extent  of  the  surplus  over 
his  own  debt,  for  which  he  held  the 
mortgage  as  a  collateral  security ; 
Chew  V.  Brumagen,  80  U.  S.  (13 
Wall.)  497  (1871) ;  bk.  20  L.  ed.  663. 
In  Salmon  v.  Allen,  11  Hun  (N.  T.) 
29  (1877),  a  complicated  case,  the 
first  pledgee  had  re-assigned  the  bond 
and  mortgage  as  a  collateral  security 
for  his  own  obligations ;  on  fore- 
closure both  of  the  assignees  and  the 
original  mortgagee  were  held  neces- 
sary parties.  See  also  Graydon  v. 
Church,  4  Mich.  646  (1857),  where 
the  assignor  was  not  made  a  party 
and  he  subsequently  became  insol- 
vent ;  Fisher  on  Mortgages,  §  348  ; 
Norrish  v.  Marshall,  5  Madd,  475 
(1821) ;  Hobart  v.  Abbot,  2  P.  Wms. 
643  (1731).  See  also  ante  %%  87-89, 
and  the  notes. 

'  Bard  v.    Poole,    12  N.    T.   495 
(1855),  a  case  often  cited. 


220  ASSIGNEE MORTGAGE    AS    COLLATERAL.    [§  182. 

SO  was  entitled  to  a  re-assignment  of  the  mortgage  ;  and  fur- 
ther, that  otherwise  the  mortgaged  premises  might  be  sold 
without  his  knowledge.*  In  an  early  case,  it  was  held  that 
the  "  assignor  was,  therefore,  the  principal  party  interested 
in  the  mortgage  at  the  time  the  bill  was  filed  ;  and  although 
the  legal  title  to  the  bond  and  mortgage  was  in  the  plaintiff 
(assignee)  solely,  the  equitable  interest  was  mainly  in  the 
assignor.  There  is  no  doubt  but  that  she  was  a  necessary 
party  to  the  suit."*  This  rule  holds  good,  even  though  the 
assignment  of  the  mortgage  is  absolute  on  its  face  and 
expresses  a  full  consideration,  when  the  actual  fact  is,  that 
only  a  portion  of  the  consideration  was  paid,  and  that  such 
payment  was  only  a  loan.*  Where  it  appeared  in  a  suit 
brought  by  the  assignee  of  a  mortgage,  assigned  as  collateral 
security,  to  foreclose  the  same,  that  it  was  the  intention  of 
the  assignor  to  give  such  assignee  the  right  to  receive  the 
moneys  due  upon  the  mortgage  and  to  foreclose  the  same  in 
his  own  name,  it  was  held  that  the  assignor  was  not  a  neces- 
sary party,  and  that  the  decree  of  sale  was  perfect  without 
him.* 

§  182.    Assignee  of  a  mortgage  assigned  collaterally, 
a  necessary  defendant  in  foreclosure  by  the  assignor. — 

A  mortgagee  who  has  assigned  a  mortgage  as  collateral 
security  for  a  less  amount  than  the  mortgage  may,  as 
assignor,  file  a  bill  of  foreclosure  in  his  own  name,  especially 
if  the  purchaser  or  assignee  holding  the  mortgage  as  col- 
lateral security  refuses  to  foreclose.'  As  has  been  seen,  the 
purchaser  might  have  commenced  the  action  and  made 
the  mortgagee  a  defendant,  if  he  refused  to  become  a  co- 
plaintiff  ;•  and  in  that  case  the  assignee  would  have  become 


'  Johnson  v.  Hart,  3  Johns.  Cas.  «  Kittle  v.  VanDyck,  1  Sandf,  Ch. 

(N.  Y.)  332  (1803) ;  Bard  v.  Poole,  (N.  Y.)  78  (1843). 

12  N.  Y,  508  (1855).     See  Compton  *■  Christie  v.  Herrick,  1  Barb.  Ch. 

V.  Jones,  65  lud.   117  (1878),  where  (N.  Y.)  254  (1845). 

the    debt    had   been  paid,  and  the  '  See  ante  §§  87-89,  and  notes, 

assignor  was  erroneously  omitted  as  *  Hoyt  v.  Martense,  16  N.  Y.  231 

a  party.  (1857) ;  Brown  v.  Johnson,  53  Me. 

«  Kittle  V.  VanDyck,  1  Sandf.  Ch.  240  (1365).     See  ante  §§  87-89. 
(N.  Y.)  7b  (184^). 


§  183.]  JOINT    OR    SEVERAL   MORTGAGEES.  221 

a  trustee  of  the  surplus.*  In  case  the  mortgagee,  as  assignor, 
commences  an  action  as  sole  plaintiff,  the  assignee,  if  he 
refuses  to  become  a  co-plaintiff,  will  be  a  necessary  party- 
defendant.*  This  rule  is  based  upon  the  same  principle 
stated  in  the  preceding  section,  that  the  entire  interest  of 
the  mortgagee  must  be  brought  under  the  jurisdiction  of  the 
court.  If  that  part  of  the  mortgagee's  interest  which  is 
assigned  as  a  collateral  security  is  not  represented  in  the 
foreclosure  by  the  assignee,  the  decree  of  sale  will,  of  course, 
be  defective,  and  the  purchaser  will  not  acquire  the  whole 
interest  of  the  mortgagee  and  the  mortgagor.* 

If  the  assignee  refuses  to  become  a  co-plaintiff,  and  is 
made  a  defendant,  the  reason  why  he  is  made  a  defendant 
must  be  alleged  in  the  complaint,  or  it  will  be  demurrable  ;* 
if  the  objection  is  not  taken  by  demurrer,  it  will  be  considered 
waived.  If  the  defect  does  not  appear  upon  the  face  of 
the  complaint,  it  may  be  objected  to  by  any  party  interested 
in  the  action,  by  answer.  The  same  is  also  true  where  the 
action  to  foreclose  is  commenced  by  the  assignee,  as  described 
in  the  preceding  section,  and  the  assignor  or  mortgagee  is 
omitted  as  a  party.* 

§  183.  Joint  or  several  mortgagees ;  action  com- 
menced by  one,  the  others  necessary  defendants. — 
Where  a  joint  or  several  mortgage  is  foreclosed  by  one  of 
the  mortgagees,  and  the  remaining  mortgagees  refuse  to 
unite  as  co-plaintiffs  in  the  action,  they  are  uniformly  held 
necessary  defendants,"  for  the  reason  that  their  omission 


*  Norton  v.  Warner,  3  Edw.  Ch.  papers,  see  Anthony  v.   "Wood,   19 

(N.  Y.)  106  (1837).  N.  Y.  Wk.  Dig.  177  (1884). 

«  Norton  v,  Warner,  3  Edw.  Ch.  »  N.  Y.  Code  Civ.  Proc.  §  1632. 

(N.  Y.)  106  (1837) ;  Simson  v.  Sat-  *  Carpenter  v.  O'Dougherty,  2  T. 

terlee,  6  Hun  (N.   Y.)  305  (1875) ;  &  C.  (N.  Y.)  427  (1873) ;  N.  Y.  Code 

affd  64  N.  Y.  657  (1876) ;  McMillan  Civ.  Proc.  §  448. 

V.  Gordon,  4  Ala.  716  (1843).     So  a  *  See  ante  %  89. 

person  who  has  attached  a  mortgage  *  See  ante  %%  78-83,   and  notes, 

debt  is  held  a  necessary  party  defen-  See  also  Denison  v.  League,  16  Tex. 

dant ;  Pine  v.  Shannon,   30  N.   J.  399,  409  (1856) ;  Porter  v,  Clements, 

Eq.    (3  Stew.)  404  (1879).     To  the  3  Ark.  364,  380  (1842) ;  Vickers  v. 

contrary,    unless    the    sheriff    has  Cowell,  1  Beav.  529  (1839).     Fisher, 

obtained    actual   possession  of   the  on  Mortgages,  §  349.     In  Lovell  v. 


222  JOINT   OR   SEVERAL   MORTGAGEES.  [§183. 

fails  to  give  the  court  complete  jurisdiction  over  the  mort- 
gage debt.  Thus,  a  mortgage  had  been  executed  to  several 
creditors  to  secure  their  respective  claims ;  on  foreclosure 
by  some  as  plaintiffs,  who  omitted  others  as  parties  to  the 
action,  the  court  held  that  the  omitted  parties  might  main- 
tain a  separate  action  for  foreclosure,  but  that  all  should 
have  been  originally  brought  before  the  court.' 

In  an  action  by  A.  to  foreclose  a  mortgage  executed  to  A. 
and  B.,  for  a  note  given  to  A.  alone,  B.  was  held  a  necessary 
party;"  and  where  a  mortgage  is  given  by  one  of  two  joint  obli- 
gors on  a  note,  it  is  erroneous  to  file  the  bill  against  the  mort- 
gagor alone  ;  the  other  joint  maker  of  the  note  rs  a  necessary 
defendant.*  The  holder  of  one  or  more  of  a  number  of 
notes  secured  by  a  mortgage,  is  generally  a  necessary  defen- 
dant in  an  action  for  foreclosure  brought  by  the  holder  of 
any  other  note,  providing  he  does  not  join  as  a  co-plaintifl ; 
this  is  specially  true  if  the  holder  of  the  note  has  any 
interest  in  the  mortgage.*  If  no  interest  in  the  mortgage 
passes  with  the  transfer  of  the  note,  the  holder  of  the  note 
is  deemed  an  unnecessary  party  in  some  states.* 


Farrington,  50  Me.   239  (1863),  one  Cal.  16(1863) ;  Lietze  v.  Claybaugh, 

of  two  mortgagors  refusing  to  join  as  59  111.  136  (1871) ;  Preston  v.  Hod- 

a  co-plaintiflE  in  an  action  to  redeem  gen,  50    III.   56  (1869) ;    Myers   v. 

was  held  a  necessary  defendant.  Wright,  33  El.  284  (1864) ;  Murdock 

»  Howe   V.   Dibble,   45  Ind.   120  v.    Ford,    17   Ind.    53  (1861).     In 

(1873).     See  Tyler  v.  Yreka  Water  Rankin  v.  Major,  9  Iowa,  297,  300 

Co.,  14  Cal.  212  (1859),  ontheneces-  (1859),  two  notes  were  made  to  A. 

sity  of  making  them  parties ;  Nash-  B.  &  Co.  and  secured  by  a  mort- 

ville  &  D.  R.  R.   Co.  v.  Orr,  85  U.  gage ;  one  was  sold  to  J.  W.  R. ;  A. 

S.  (18  Wall.)  471  (1873) ;   bk.  22  L.  B.  &  Co.  and  J.  W.  R.  united  as  co- 

e{j    810.  plaintifEs  to  foreclose.     The  court 

«  Chrisman  v.  Chenoweth,  81  Ind.  held  that  there  was  a  misjoinder  of 

401  (1882).  plaintiffs,   and   that   one    of   them 

8  Dediick  v.  Barber,  44  Mich.  19  should  have  been  made  a  defendant. 

(1880).     See  Fond  du  Lac  Harrow  Seemingly    contra,    see    Harris    v. 

Co.  V.  Haskins,  51  Wis.  135  (1881).  Harlan,  14  Ind.  439  (1860) ;  Hensley 

*  In    Pettibone    v.    Edwards,    15  v.    Whiffln,    54  Iowa,   555  (1880) ; 

Wis.     95    (1862),    an    action    was  Thayer   v.   Campbell,    9    Mo.    277 

brought  on  the  last  of  three  notes  (1845).     But  see  ante  %%  84-86,  and 

for  the  foreclosure  of  a  mortgage,  notes,   citing  the    cases   fully    and 

and  the  holder  of  the  second  note  stating  the  rule  in  different  states, 

was   held    a   necessary    defendant.  '  Hensley  v.   Whiflin,  54    Iowa, 

Bee  also  Gratton  v.    Wiggins,    23  555  (1880) ;  Kemerer  v.  Boiimes,  53 


§§  184-185.]    COl^TTEJMPOEARY   MORTGAGEES.  223 

In  the  foreclosure  of  a  joint  mortgage  by  the  survivor  of 
the  mortgagees,  the  personal  representatives  of  the  decedent 
are  not  necessary  defendants  under  the  doctrine  of  survivor- 
ship in  joint  tenancy.'  The  rule  is  otherwise  where  the 
mortgage  is  held  by  parties  in  severalty.'  Where  a  mortgage 
was  executed  to  a  husband  and  wife,  and  the  husband  died 
and  his  administrator  assigned  it,  without  the  wife  joining 
in  the  assignment,  she  was  held  a  necessary  defendant  in  an 
action  brought  by  the  assignee  for  foreclosure.* 

§  184.  Contemporary  and  equal  mortgagees ;  fore- 
closure commenced  by  one,  others  necessary  defendants. 

— Where  two  or  more  mortgages,  held  by  different  parties, 
are  contemporary  and  equal  liens  upon  premises,  the 
commencement  of  a  foreclosure  by  the  owner  of  any  of 
the  mortgages  as  sole  plaintiff,  will  render  the  remaining 
mortgagees  necessary  defendants  in  the  action.*  This  rule 
is  based  upon  the  fact  that  courts  regard  the  owners  of 
such  mortgages  the  same  as  they  would  the  owners  of  a 
single  mortgage  given  to  secure  in  severalty  the  respective 
amounts  of  the  different  contemporary  mortgages. 

§  185.  Ownership  of  mortgage  doubtful  or  in  dispute  ; 
action  commenced  by  one  claimant,  other  claimants 
advisable  defendants. — Whenever  the  ownership  of  a 
mortgage  is  in  dispute,  or  parties  other  than  those  to  the 
instrument  claim  an  interest  in  it,  it  is  the  best  practice  to 


Iowa,  172  (1880) ;  Bell  v.  Shrock,  2  Ward    Savings   Bank   v.  Hay,  55 

B.  Mon.  (Ky.)  29  (1841) ;  Pugh  v.  How.  (N.  Y.)  Pr.  444  (1878).      In 

Holt,  27  Miss.  461  (1854) ;  Archer  v.  Greene  v.  Warnick,  64  N.  T.  220 

Jones,  26  Miss.  583  (1853).  (1876),  reversing  4  Hun  (N.  T.)  703, 

>  Launay   v.  Wilson,  30  Md.  536  it  was  also  held  that,  where  there 

(1869).      See    ante    §§81,   82,   and  was  an  agreement  that  two  mort- 

notes,  for  a  fuU  presentation  of  this  gages  executed  at  the  same  time  to 

question.  different  parties    should   be   equal 

'  See  ante  §§  80,  83  and  notes.  liens,  the  fact  that  one  was  recorded 

2  Savings  Bank  v.  Freese,  26  N.  J.  first  gave  it  no  priority,  even  in  the 

Eq.  (11  C.  E.  Gr.)  453  (1875).     See  hands  of  a  bona  fide  assignee  who 

ante  §§  81,  82.  bought  it  relying  upon  the  record 

*  Decker  v.  Boice,  83  N.  T.  215  and  believing  it  to  be  the  first  lien. 

(1880) ;  Cain  v.  Hanna,  63  Ind.  408  For  a  full  list  of  cases  upon  the 

(1878) ;  Cochran  v.  Goodell,  131  subject  of  the  section,  see  ante  §  99. 
Mass.    464    (1881).     See    Eleventh 


224  TRUSTEES   AI^D    BENEFICIARIES.  [§186. 

bring  all  claimants  within  the  jurisdiction  of  the  court,  that 
all  interests  may  be  bound  by  the  decree,  and  the  mortgage 
completely  foreclosed.'  It  often  occurs  that  the  legal  title 
to  a  mortgage  is  held  by  one  person  arid  the  equitable  title 
by  another.  Thus,  where  a  defendant  answers  that  no 
valid  assignment  was  made  to  the  plaintiff,  he  may  amend, 
making  his  assignor  a  defendant  to  determine  the  question.* 

§  i86.  Trustees  and  beneficiaries  sometimes  neces- 
sary defendants.^ — In  the  foreclosure  of  a  trust  mortgage 
by  the  trustee  as  plaintiff,  it  may  be  stated  as  a  general  rule 
that  the  beneficiaries  or  cestuis  que  trust  are  necessary  defen- 
dants, unless  they  are  joined  as  co-plaintiffs  in  the  action.* 
Likewise,  if  the  action  is  commenced  by  a  beneficiary,  the 
trustees  and  other  beneficiaries  are  necessary  defendants, 
unless  joined  as  co-plaintiffs.*  There  are  some  exceptions 
to  these  rules,  especially  in  the  case  of  railroad  mortgages 
and  where  the  beneficiaries  are  very  numerous.*  In  a  New 
York  case,  where  a  mortgage  was  made  to  a  person  in  trust 
for  the  payment  of  several  bonds  of  the  mortgagor  held  by 
different  individuals,  the  bondholders  were  held  necessary 
parties  to  an  action  brought  by  the  trustee  as  sole  plaintiff." 


»  See  Kellogg  v.  Smith,  26  N.  Y.  Waring  v.  Turton,  44  Md.  535(1876). 

18  (1862) ;  Hancock  v.  Hancock,  22  See  ante  §§  110-112,  where  the  cases 

N.  Y.  568  (1860) ;  Peek  v.  Mallams,  are  cited  fully. 

10  N.  Y.  509  (1853) ;  Lawrence  v.  ■•  Dorsey  v.  Thompson,  37  Md.  35 

Lawrence,  3  Barb.  Ch.  (N.  Y.)  71  (1872) ;  Hackensack  Water   Co.   v. 

(1848) ;  Slee  v.  Manhattan,  1  Paige  DeKay,  36  N.  J.  Eq.  (9  Stew.)  549 

Ch.   (N.  Y. )  48  (1828).     See  poit  (1883) ;  Hays  v.  Lewis,  21  Wis.  663 

chap.  ix.  (1867).     See  ante  §  113. 

'  Burrows  v.   Stryker,  47  Iowa,  *  Swift  v.  Stebbins,  4  Stew.  «&  P. 

477  (1877).  (Ala.)  447  (1833).     See  ante  §§  110- 

3  Large  v.  VanDoren,  14  N.  J.  Eq.  112. 
(1  McCart.)  208  (1862) ;  Davis  v.  « King  v.  The  Merchants'  Ex- 
Hemingway,  29  Vt.  438  (1857) ;  change  Co.,  5  N.  Y.  547,  556  (1851). 
Barkley  v.  Reay,  2  Hare,  306  And  see  Turner  v.  Midland  R.  R. 
(1843) ;  Fisher  on  Mortgages,  §  375  Co.,  24  N.  Y.  Wk.  Dig.  239  (1886) ; 
et  seq.  Contra,  in  Maryland,  see  The  Mercantile  Trust  Co.  v.  The 
Hays  V.  Dorsey,  5  Md.  99  (1853),  Rochester  &  Ont.  Belt  R.  Co.,  20 
under  the  act  of  1833,  chap.  181 ;  N.  Y.  Wk.  Dig.  508  (1885). 


CHAPTER  IX. 


PARTIES  DEFENDANT. 


PRIOB  MORTGAGEES  AND  ADVERSE  CLAIMANTS. 


187.  Introductory. 

188.  When  prior  mortgagees  and 

lienors    can  not    be    made 
defendants. 

189.  Rights  of  senior  and  junior 

mortgagees  to  maintain    a 
foreclosure. 

190.  When  prior  mortgagees  and 

lienors  may  be  made  defen- 
dants. 


§  191.  Parties  having  a  title  par^ 
mount  to  the  mortgage, 
neither  proper  nor  neces 
sary  defendants. 

192.  Adverse     claimants     neither 

proper  nor  necessary  defen- 
dants. 

193.  Senior  mortgagees  or  incum- 

brancers, claimed  to  be 
junior  lienors,  proper  de- 
fendants for  litigating  ques- 
tions of  priority. 


§  187.  Introductory.— It  has  been  repeatedly  stated  in 
this  work,  upon  the  authority  of  numerous  cases,  that  the 
only  proper  or  necessary  parties  to  the  foreclosure  of  a 
mortgage  are  the  mortgagor  and  the  mortgagee  and  those 
persons  who  have  acquired  rights  under  them  subsequent  to 
the  mortgage.  But  aside  from  this  general  rule,  there  are 
cases  in  which  it  is  proper  to  make  others  than  such  parties 
defendants  to  the  foreclosure,  for  the  purpose  of  fully  deter- 
mining the  issues  involved,  or  for  other  purposes  which  the 
plaintiff  may  desire  to  accomplish.  It  sometimes  happens 
that  it  is  material  to  the  interests  of  the  mortgagee  to  make 
a  prior  mortgagee  or  lienor  a  defendant  to  the  action,  for  the 
purpose  of  ascertaining  the  exact  amount  of  his  incumbrance 
and  of  having  it  paid  from  the  proceeds  of  the  sale  ;  a 
contest  as  to  priority  between  mortgages  upon  the  same 
premises,  can  be  litigated  most  directly  in  an  action  to  fore- 
close, if  all  the  mortgagees  are  brought  within  the  jurisdiction 
of  the  court ;  and  at  one  time  there  was  a  great  deal  of 
doubt,  as  to  whether  adverse  claimaints  should  not  be  made 
defendants  to  a  foreclosure  for  the  purpose  of  settling  their 
claims.  These  and  other  questions  as  to  who  can  rightly  be 
made  parties   to  a  foreclosure  for  a  full  determination  of 

2S&  as) 


226 


PRIOR   MORTGAGEES    DEFEISTDANTS. 


[§  188. 


all  the  issues  involved  are  presented  to  every  practicing 
attorney.  It  is  the  design  of  this  chapter  to  notice  briefly 
these  miscellaneous  matters. 

§  i88.  When  prior  mortgagees  and  lienors  can  not  be 
made  defendants. — It  may  be  stated  as  a  general  rule  that 
persons  holding  mortgages  or  liens  prior  to  the  mortgage 
under  foreclosure  are  neither  necessary  nor  proper  parties  to 
the  action.'  A  foreclosure  is  an  equitable  action  in  reniy 
designed  to  extinguish  the  mortgage  and  to  cut  off  all  liens 
which  are  subsequent  to  it  upon  the  premises,  and  not  to 
affect  in  any  way  the  title  to  the  premises  or  the  liens  upon 
it  prior  to  the  execution  of  the  mortgage.  It  is  the  general 
practice,  where  persons  holding  prior  mortgages  are  not 
made  defendants  and  no  provision  as  to  their  rights  is  made 
in  the  judgment,  to  sell  the  premises  subject  to  such  mort- 
gages ;  no  portion  of  the  proceeds  of  the  sale  can  be  applied 


'  Adams  v.  McPartlin,  11  Abb. 
(N.  Y.)  N.  C.  369  (1882) ;  Hamlin  v. 
McCahiU,  Clarke  Ch.  (N.  Y.)  249 
(1840) ;  see  the  note  to  this  case,  cit- 
ing numerous  authorities.  See  Emi- 
grant Industrial  Savings  Bk.  v.  Gk>ld- 
man,  75  N.  Y.  127, 131  (1878);  Brown 
V.  Volkening,  64  N.  Y.  76,  84 
(1876) ;  Frost  v.  Koon,  30  N.  Y.  428, 
444  (1864) ;  Hancock  v.  Hancock,  23 
N.  Y.  568  (1860);  Eagle  Fire  Ins. 
Co.  V.  Lent,  6  Paige  Ch.  (N.  Y.)  685 
(1837).  See  Chapman  v.  West, 
17  K  Y.  125  (1858),  where  the 
action  was  to  establish  a  land  con- 
tract ;  Lewis  v.  Smith.  9  N.  Y.  503 
(1854),  aff'g  11  Barb.  (N.  Y.)  153 
(1851)  ;  Bank  of  Orleans  v.  Flagg,  3 
Barb.  Ch.  (N.  Y.)  316  (1848) ;  Hol- 
comb  V.  Holcomb,  3  Barb.  (N.  Y.) 
20  (1847);  Smith  v.  Roberts,  63 
How.  (K  Y.)  Pr.  196,  200  (1881); 
oEf'd  91  N.  Y.  470,  477  (1883);  Payne 
V.  Grant,  23  Hun  (N.  Y.)  134  (1880) ; 
Vanderkemp  v.  Shelton,  11  Paige 
Ch.  (N.  Y.)  28  (1844) ;  Western  Ins. 
Co.  V.  Eagle  Fire  Ins.  Co.,  1  Paige 
Ch.  (N.  Y.)  284  (1828).     See  also 


Koch  V.  Purcell,  45  N.  T.  Supr. 
Ct.  (13  J.  &  S.)  162,  173  (1879); 
also  Hotchkiss  v.  Clifton  Air  Cure,  4 
Keyes  (N.  Y.)  170  (1868),  explaining 
the  remedy  of  a  bidder  at  the  sale, 
when  the  referee  varies  the  terms  of 
sale  from  the  directions  of  the  judg- 
ment. In  point.  White  v.  Holman,  33 
Ark.  753(1878);  Broward  v.  Hoeg,  15 
Fla.  370  (1875) ;  Pattison  v.  Shaw,  6 
Ind.  377  (1855) ;  Tome  v.  Mer.  Loan 
Co.,  34  Md.  13  (1870);  Dawson  v. 
Danbury  Bank,  15  Mich.  489  (1867) ; 
Hudnit  V.  Nash,  16  N.  J.  Eq.  (1  C. 
E.  Gr.)  550  (1862) ;  Williamson  v. 
Probasco,  5  N.  J.  Eq.  (4  Halst.)  571 
(1851);  Forrer  v.  Kloke,  10  Neb. 
373,  377  (1880) ;  Warren  v.  Burton, 
9  S.  C.  197  (1877)  ;  Weed  v.  Beebe, 
21  Vt.  495,  502  (1849) ;  Jerome  v. 
McCarter,  94  U.  S.  (4  Otto),  734,  736 
(1876) ;  bk.  24  L.  ed.  136  ;  Hagan  v. 
Walker.  55  U.  S.  (14  How.)  29,  37 
(1852);  bk.  14  L.  ed.  312.  See 
Fisher  on  Mortgages,  §§  350-353, 
and  the  English  cases  cited.  Contra, 
see  Case  v.  Bartholow,  31  Kan.  300 
(1878). 


§189.]  SENIOR   AND    JUNIOR   MORTGAGEES.  227 

to  their  payment.'  .  A  decree  of  sale  can  generally  have  no 
effect  upon  the  rights  of  prior  lienors,  whether  they  are  made 
parties  to  the  action  or  not."  The  proposition  of  this  section 
also  applies  where  the  prior  lien  is  a  judgment*  or  a 
mechanic's  lien.*  A  prior  lienor  can  not  properly  be  made 
a  defendant  to  an  action  to  foreclose  or  enforce  a  mechanic's 
lien.' 

§  189.  Rights  of  senior  and  junior  mortgagees  to 
maintain  a  foreclosure. — In  a  recent  case  it  appeared  that 
after  a  junior  mortgagee  had  commenced  an  action  to 
foreclose,  the  prior  mortgagee  also  commenced  a  fore- 
closure, making  a  defendant  the  junior  mortgagee,  who 
answered  that  an  action  was  pending  for  the  foreclosure 
of  the  junior  mortgage  to  which  the  prior  mortgagee 
had  been  made  a  defendant,  and  asked  the  foreclosure 
of  the  prior  mortgage  as  well  as  the  foreclosure  of  his 
own;  the  court  held  after  reviewing  the  authorities  at 
length,  that  the  fact  that  the  prior  mortgagee  was  made 
a  defendant  to  the  foreclosure  of  a  junior  mortgage  did 
not  affect  his  rights  at  all,  and  that  he  might  disregard 
the  foreclosure  of  the  junior  mortgage  and  prosecute 
his  own  foreclosure  to  a  sale.'  If  a  prior  mortgagee 
who  has  been  made  a  defendant  to  the  foreclosure  of  a 
junior  mortgage  dies,  or  his  interest  devolves  on  another 
pending  the  action,  the  proceeding  may  go  on  without 
reviving  or  continuing  it  against  his  personal  representative 
or  successor,  as  he  was  not  a  necessary  party  to  the  fore- 
closure. ' 


•  Bache  v.  Doscher,  67  N.  Y.  429  Bank  v.  Goldman,  75  N.  Y.  127, 132 
(1876).  (1878);    Holcomb   v.    Holcomb,    2 

•See  the  cases  supra;  Smith  v.  Barb.  (N.  Y.)  20  (1847);  Vanderkemp 

Eoberts,  91  N.  Y.  470,  477  (1883).  v.  Shelton,  11  Paige  Ch.  (N.  Y.)  28 

»  Frost  V.  Koon,  30  N.  Y.  428, 444  (1844) ;  Smith  v.  Schafier,   46  Md. 

(1864);  Kent  v.  Popham,  6  N.  Y.  573(1877). 

Oiv.  Proc.  337  (1884),  holding  that  •  Adams  v.   McPartlin,   11  Abb. 

complaint  should  be  dismissed  as  to  ( N.  Y. )  N.  C.   369  ( 1882 ).      See 

judgment  creditor,  with  costs.  Straight   v.    Harris,    14    Wis.    509 

*  Emigrant     Industrial     Savings  (1861) ;  Strobe  v.  Downer,  13  Wis, 
Bank  V.  Goldman,  75  N.  Y.  127, 132  10  (1860). 

(1878).  '  Hancock  v.  Hancock,  22  N.  Y. 

^  Emigrant     Industrial     Savings  568  (1860). 


228  PJBIOJi    MORTGAGEES    DEiE^NiJAJSi'S.  [§  190. 

Where  in  an  action  to  foreclose  a  mortgage  one  having  a 
subsequent  mortgage  is  made  a  party  defendant,  and  such 
party  is  also  the  owner  of  mortgages  prior  to  that  of  the 
plaintiff,  he  may  answer  in  the  action  and  ask  to  have  such 
prior  mortgages  paid  out  of  the  proceeds  of  the  sale  before 
applying  any  portion  thereof  to  the  satisfaction  of  the 
plaintiflf's  mortgage.*  In  New  York  it  is  the  usual  practice, 
where  prior  incumbrancers  are  improperly  made  parties  to  a 
foreclosure,  to  order  the  action  to  be  dismissed  as  to  such 
defendants  upon  their  application,  without  prejudice  to  their 
or  the  plaintiff's  rights  in  any  other  proceeding.'  If  the 
action  is  not  dismissed  as  to  them,  their  rights  may  be 
expressly  reserved  in  the  decree  ;'  or  they  may  disregard  the 
action,  as  the  decree  can  have  no  effect  whatever  upon 
their  rights.* 

§  190.  When  prior  mortgagees  and  lienors  may  be  made 
defendants. — As  an  exception  to  the  proposition  of  the  two 
preceding  sections,  a  prior  incumbrancer  by  mortgage, 
judgment  or  otherwise,  may  be  made  a  defendant  to  the 
foreclosure  of  a  junior  mortgage  for  the  purpose  of  having 
the  amount  of  his  claim  ascertained  and  paid  out  of  the 
proceeds  of  the  sale,  but  such  a  purpose  must  be  specifically 
indicated  and  the  prior  claim  set  forth  in  full  in  the  com- 
plaint ;*  even  in  such  a  case  it  will  be  impossible  to  compel 
the  prior  lienor  to  accept  payment  from  the  proceeds  of  the 
sale  unless  his  lien  has  matured  and  is  due  and  payable,"  and 


»  Doctor  V.  Smith,  16  Hun  (N.  Y.)  470  (1883);  Emigrant  Industrial  Sav- 

245(1878).  ings  Bank  v.    Goldman,  75  N.  Y. 

2  Corning  v.  Smith,  6  N.  Y.  83  127,  132  (1878) ;  Metropolitan  Trust 

(1851);  Kentv.  Popham,  6N.  Y.  Civ.  Co.   v.    Tonawanda  R.  R.  Co.,    18 

Proc.  337  (1884).  Abb.    (N.   Y.)    N.   C.    868    (1887); 

'  San    Francisco    v.    Lawton,   18  Holcomb  v.  Holcomb,  2  Barb.  (N. 

Cal.  465  (1861).     See  Wilkerson  v.  Y.)  20  (1847) ;  Vanderkemp  v.  Sbel- 

Daniels,   1  G.   Greene  (Iowa),   179  ton,  11  Paige  Ch.  (N.  Y.)  28  (1844) ; 

(1848).  Fisher  on  Mortgages,  §§  359-353. 

■»  See  the  cases  cited  in  the  first  *  Frost  v.  Yonkers  Savings  Bank, 

note  to  g  188  ante.  70  N.  Y.  553,  557  (1877) ;   Hamlm 

»  Smith  V.  Davis,  4  N.  Y.  Civ.  v.  McCahill,  Clarke  Ch.  (N.  Y.)  249 

Proc.    158    (1883),     discussing    the  (1840);   Western   Reserve   Bank  v. 

point  in  a  note  and  citing    many  Potter,   Clarke    Ch.    ( N.    Y.  )    439 

cases ;  Smith  v.  Roberts,  91  N.  Y.  (1841) ;  Western  Ins.    Co.  v.  Eagl€ 


§  190.] 


PIIIOB  MORTGAGEES  DEFENDANTS. 


229 


it  is  doubtful  whether  a  court  will  then  decree  the  payment 
of  a  prior  lien  from  the  proceeds  of  the  sale,  unless  the 
prior  lienor  has  appeared  and  consented  to  the  decree.*  It 
is  not  advisable  to  make  a  prior  mortgagee  a  party  to  the 
suit,  unless  he  previously  indicates  a  willingness  to  have  the 
whole  title  sold  under  the  foreclosure  and  to  have  all 
incumbrances  paid  out  of  the  proceeds  in  the  order  of  their 
priority.' 

It  is  believed  that  in  a  proper  case  the  English  rule  con- 
cerning prior  mortgages  will  be  followed  in  our  courts. 
Under  this  rule,  if  a  subsequent  mortgagee  desires  to  sell 
the  whole  estate,  he  can  make  the  prior  mortgagee  or  lienor 
a  party  to  the  suit  and  require  him  to  consent  to  such  a  sale 
or  to  refuse  it  at  once.  If  he  consents,  a  sale  of  the  whole 
estate  will  be  decreed  ;  otherwise,  the  decree  will  be  for  a 
sale  subject  to  his  prior  lien,  the  exact  amount,  terms  and 
conditions  of  which  can  be  ascertained  in  the  suit  and  made 
known  at  the  sale,  so  that  a  purchaser  can  know  accurately 
the  incumbrances  subject  to  which  he  is  buying  the  title.* 


Fire  Ins.  Co.,  1  Paige  Ch.  (N.  Y.) 
284  (1838). 

1  White  V.  Holman,  33  Ark.  753 
(1878) ;  Norton  v.  Joy,  6  111.  App. 
406  (1880) ;  Warner  v.  Dewitt  Co. 
Bank,  4  111.  App.  305  (1878) ;  Per- 
sons V.  Alsip,  3  Ind.  67  (1850) ; 
Troth  V.  Hunt,  8  Blackf.  (Ind.)  580 
(1847) ;  Clarke  v.  Prentice,  3  Dana 
(Ky.)  469  (1835);  Champlin  v.  Foster, 
7  B.  Mon.  (Ky.)  104  (1846) ;  Waters 
V.  Bossel,  58  Miss.  603  (1881) ;  Hud- 
nit  V.  Nash,  16  N.  J.  Eq.  (1  C.  E. 
Gr.)  550  (1863) ;  Roll  v.  Smalley, 
6  N.  J.  Eq.  (3  Halst.)  464  (1847) ; 
Evans  V.  McLucas,  12  S.  C.  56  (1878); 
Raymond  v.  Holborn,  23  Wis.  57 
(1868);  Jerome  v.  McCarter,  94  U.  S. 
(4  Otto),  734(1876),  bk.  24  L.  ed.  136; 
Hagan  v.  Walker,  55  U.  S.  (14  How.) 
29,  37  (1853);  bk.  14  L.  ed.  312  ;  Fin- 
ley  V.  Bank  of  United  States,  24  U.  S. 
(11  Wheat.)  304  (1826) ;  bk.  6  L.  ed. 
480.    See  Dunn  v.  Raley,  58  Mo.  134 


(1874),  as  to  what  allegations  must 
be  made  in  the  complaint ;  Gargaa 
V.  Grimes,  47  Iowa,  180  (1877); 
Anonymous,  8  N.  J.  Eq.  (4  Halst.) 
174  (1849).  See  also  Tootle  v.  White, 
4  Neb.  401  (1876),  in  point.  If  the 
prior  mortgagee  consents  to  a  sale, 
he  can  not  afterward  commence  a 
foreclosure  of  his  own  mortgage ; 
Rowley  v.  Williams,  5  Wis.  151 
(1856). 

'^  Vanderkemp  v.  Shelton,  11 
Paige  Ch.  (N.  Y.)  28  (1844) ;  Clarke 
V.  Prentice,  3  Dana  (Ky.)  469  (1835); 
Champlin  v.  Foster,  7  B.  Mon.  (Ky.) 
104  (1846) ;  Ducker  v.  Belt,  3  Md. 
Ch.  13  (1851) ;  Rucks  v.  Taylor,  49 
Miss.  553  (1873) ;  Miller  v.  Finn,  1 
Neb.  254  (1871). 

'  Langton  v.  Langton,  7  DeG., 
M.  &  G.  29  (1855) ;  Wickenden  v. 
Rayson,  6  DeG.,  M.  &  G.  210  (1855) ; 
Parker  v.  Fuller,  1  Russ  &  M.  656 
(1830);    Delabere  v.   Norwood,    3 


230 


TITLE    PAr.AiilOUXT   TO    MORTGAGE. 


[§  191. 


In  Indiana,  contrary  to  the  practice  in  nearly  all  other  states, 
a  prior  incumbrancer  is  held  a  proper  party  to  the  foreclosure 
of  a  junior  mortgage,  and  when  made  a  party  will  be  bound 
by  the  decree ;'  so  also  in  Nebraska,  if  the  prior  mortgage  is 
due.'' 

§  191.  Parties  having  a  title  paramount  to  the  mort- 
gage, neither  proper  nor  necessary  defendants. — Persons 
who  own  an  interest  in  mortgaged  premises  paramount  to 
the  mortgage,  are  neither  necessary  nor  proper  parties  to  its 
foreclosure,  for  the  reason  that  they  did  not  acquire  their 
rights  under  the  mortgagor  or  the  mortgagee,  subsequent  to 
the  execution  of  the  mortgage.'  Whether  they  are  made 
parties  or  not,  the  decree  in  the  action  will  not  in  any  way 
affect  their  rights.  Thus  a  widow,  who  did  not  sign  a  mort- 
gage executed  by  her  husband,  should  not  be  made  a 
defendant  to  its  foreclosure ;  and  even  if  she  is  made 
a  defendant,  her  rights  will  not  be  affected  in  any  way  by 


Swans,  144  n.  (1818).  See  Bige- 
low  V.  Casscdy,  26  N.  J.  Eq.  (11  C. 
E.  Gr.)  557  (1875) ;  Potts  v.  N.  J. 
Arms  Co.,  17  N.  J.  Eq.  (3  C.  E. 
Gr.)  516  (1865) ;  Gihon  v.  Belleville 
Co.,  7  N.  J.  Eq.  (3  Halst. )  531 
(1849) ;  Jerome  v.  McCarter,  94  U. 
S.  (4  Otto),  734,  736  (1876) ;  bk.  24 
L.  ed.  136,  and  the  cases  cited  in 
the  opinion.  See  also  Perdicaris  v. 
Wheeler,  8  N.  J.  Eq.  (4  Halst.)  68 
(1849)  ;  Persons  v.  Merrick,  5  Wis. 
231  (1856). 

1  Masters  v.  Templeton,  92  Ind. 
447(1883),  citing  numerous  Indiana 
cases,  also  holds  that  claims  adverse 
to  the  title  may  be  litigated  in  a 
foreclosure ;  Merritt  v.  Wells,  18 
Ind.  171  (1862). 

2  White  V.  Bartlett,  14  Neb.  320 
(1883). 

s  Lewis  V.  Smith,  9  N.  Y.  502, 
514  (1854),  affirming  11  Barb.  (N.  Y.) 
153  (1851);  Walsh  v.  Rutgers,  13 
Abb.  (N.  Y.)  Pr.  33  (1861) ;  Rath- 
bone  V.    ilouue}',    58    N.  Y.    403, 


467  (1874);  Merchants'  Bank  v. 
Thompson,  55  N.  Y.  711  (1873); 
Lee  V.  Parker,  43  Barb.  (N.  Y.) 
611,  614  (1865);  Hamlin  v.  Mc- 
Cahill,  Clarke  Ch.  (N.  Y.) 249(1840), 
and  the  note  ;  Bram  v.  Bram,  34 
Hun  (N.  Y.)  487,  491  (1885) ;  Gage 
V.  Perry,  93  111.  176  (1879);  McAlpin 
V.  Zitzer,  119  111.  273  (1887) ;  s.  c.  8 
West.  Rep.  345 ;  Wilkinson  v. 
Green,  34  Mich.  221  (1876);  Com- 
stock  V.  Comstock,  24  Mich.  39 
(1871);  Horton  v.  Ingersoll,  13  Mich. 
409  ( 1865 ) ;  Wurcherer  v.  Hewett, 
10  Mich.  453  (1862);  McCIure  v. 
Holbrook,  39  Mich.  42  (1878); 
Price's  Ex'rs  v.  Lawtou,  27  N.  J. 
Eq.  (12  C.  E.  Gr.)  325  (1876),  citing 
numerous  cases ;  Hekla  Fire  Ins. 
Co.  V.  Morrison,  56  Wis.  133  (1882), 
citing  numerous  cases ;  Macloon 
V.  Smith,  49  Wis.  200  (1880) ;  Palmer 
V.  Yager,  20  Wis.  91  (1865) ;  Pelton 
V.  Farmin,  18  Wis.  222  (1864).  See 
the  cases  cited  in  the  following 
section. 


§  192.]  ADVERSE   CLATMAXTS   DEFEND Als^TS.  231 

the  decree.'  This  is  specially  true  if  the  complaint  does  not 
contain  allegations  setting  forth  her  real  rights  in  the 
property  and  asking  to  have  them  foreclosed  ;  and  even  with 
such  allegations  in  the  complaint,  it  was  held  in  one  case 
that  the  judgment  passing  upon  her  rights  and  foreclosing 
them  was  erroneous  and  void.* 

A  person  claiming  dower  by  title  paramount  to  the  mort- 
gage can  not  be  brought  into  court  in  a  foreclosure  and 
made  to  contest  the  validity  of  her  dower.  Whether  she  is 
made  a  party  or  not,  her  rights  will  remain  unaffected  by 
the  action  ;  the  sale  should  be  made  subject  to  her  dower. 
This  rule  also  applies  to  persons  holding  an  estate  in  remain- 
der or  reversion,  where  the  life  estate  or  the  intermediate 
interests  of  the  beneficiary  have  been  mortgaged.* 

§  192.  Adverse  claimants  neither  proper  nor  necessary 
defendants. — It  is  now  an  established  rule  in  practice  that 
a  foreclosure  suit  is  not  a  proper  action  in  which  to  litigate 
the  rights  of  persons  who  claim  title  to  mortgaged  premises 
in  hostility  to  the  mortgagor."    In  New  York  it  has  been 


"Lewis  V.  Smith,  9  N.  Y.   502,  30  N.  Y.    428,    444  (1864);    Cor- 

514  (1854),    affirming  11  Barb.  (N.  ning  v.  Smitli,    6  N.  Y.  82  (1851); 

Y.)  153  (1851) ;  Merchants'  Bank  v.  Bank  of   Orleans  v.  Flagg,  3  Barb. 

Thomson,    55  N.  Y.  7,    11   (1873);  Ch.   (N.Y.)  316  (1848) ;"  Meiggs  v. 

Lanier  v.   Smith,  37  Hun  (N.  Y.)  Thomson,  66  How.  (N.  Y.)  Pr.  466 

529  (1885).  (1884) ;  Payn  v.  Grant,  23  Hun  (N. 

^  Merchants'  Bank    v.  Thomson,  Y.)     134    (1880) ;    Eagle    Fire   Co. 

55  N.  Y.   7,  11   (1873);    Payn  v.  v.  Lent,  6  Paige  Ch.  (N.  Y.)  635, 

Grant,   23  Hun  (N.  Y.)  134  (1880);  638   (1837).      See    also    Brown    v. 

Bradley  v.  Parkhurst,  20  Kan.  462  Volkening,  64  N.  Y.  76,  84  (1876) ; 

(1878) ;  Lounsbury  v.  Catron,  8  Neb.  Marlow  v.  Barlew,  53  Cal.  456  (1879); 

469  (1879) ;  Shellenbarger  v.   Biser,  Crogan  v.  Minor,  53  Cal.  15  (1878) ; 

5  Neb.  195  (1876) ;  Wicke  v.  Lake,  San  Francisco  v.  Lawton,  18  Cal.  465 

21  Wis.  410(1867);  Roche  V.  Knight,  (1861);   Gage  v.  Perry,  93  111.  176 

21   Wis.    324  (1867).      See  Pool  v.  (1879) ;  Gage  v.  Board  of  Directors, 

Horton,  45  Mich.  404  (1881).  8  III.   App.   410  (1881) ;  Carbine  v. 

3  Piathbone  v.  Hooney,  58  N.  T.  Sebastian,  6  111.    App.   564  (1880) ; 

463,   467  (1874).      See  Standish  v.  Pancost  v.   Travelers'  Ins.   Co.,  79 

Dow,  21  Iowa,  363  (1866),  a  case  of  Ind.   172  (1881) ;  Pattison  v.  Shaw, 

trust.  6  Ind.  377  (1855) ;   Comly  v.   Hen- 

*  Lewis  V.  Smith,   9  N.  Y.  502,  dricks,  8  Blackf.  (Ind.)  189  (1846) ; 

514  (1854),  affirming  11  Barb.  (N.  Wilkinson  v.  Green,  34  Mich.   221 

Y.)  153   (1851);    Frost    v.    Koon,  (1876);    Summers  v.   Bromley,    28 


232 


ADVERSE    CLAIMANTS   DEFENDANTS. 


[§  192. 


determined  that  where  a  party  setting  up  such  a  claim  is 
made  a  defendant  to  the  foreclosure  of  a  mortgage,  the 
decree  will  be  held  erroneous  and  will  be  refused,  if  it  passes 
upon  his  rights,  though  made  after  a  hearing  upon  the  plead- 
ings and  proofs.'  The  mortgagee  has  no  right  to  make  one, 
who  claims  adversely  to  the  title  of  the  mortgagor  and  prior 
to  the  mortgagee,  a  party  defendant  for  the  purpose  of  try- 
ing the  validity  of  his  adverse  claim  of  title." 

The  bill  of  foreclosure  should  be  dismissed  as  to  an  adverse 
claimant,  unless  the  plaintiff  alleges  in  his  complaint  and  is 
prepared  to  prove,  that  the  facts  upon  which  he  relies  arose 
subsequently  to  the  execution  of  the  mortgage.'  Disputes 
involving  the  title  to  the  mortgaged  premises,  arising  out  of 
circumstances  ante-dating  the  execution  of  the  mortgage, 
can  not  be  litigated  in  a  foreclosure,  but  must  be  tried  by 
ejectment  or  other  suitable  action  apart  from  the  foreclosure;* 
but  where  the  title  was  acquired  at  a  tax  sale  subsequent  to 
the  mortgage,  the  purchaser  was  held  a  proper  party."     It  is 


Mich.  125  (1873),  citing  New 
York  cases;  Comstock  v.  Comstock, 
24  Mich.  39  (1871);  Wurcherer  v. 
Hewitt,  10  Mich.  453  (1862); 
Chamberlain  v.  Lyell,  3  Mich. 
448  (1855) ;  Banning  v.  Bradford, 
21  Minn.  308  (1875);  Newman  v. 
Home  Ins.  Co.,  20  Minn.  423 
(1874) ;  Bogey  v.  Shute,  4  Jones 
(N.  C.)  Eq.  174  (1858) ;  Lyman  v. 
Little,  15  Vt.  576  (1843) ;  Lange  v. 
Jones,  5  Leigh  (Va.)  192  (1834); 
Peters  v.  Bowman,  98  U.  S.  (8 
Otto ),  56  ( 1878 ) ;  bk.  25  L.  ed. 
91  ;  Dial  v.  Reynolds,  96  U.  S. 
(6  Otto),  340  (1877) ;  bk.  24  L.  ed. 
644.  See  Chicago  Theological  Semi- 
nary V.  Gage,  103  111.  175  (1882) ; 
Shellenbarger  v.  Biser,  5  Neb.  195 
(1876);  Coe  v.  N.  J.  Midland  Ry., 
31  N.  J.  Eq.  (4  Stew.)  105  (1879). 
See  the  cases  cited  in  the  preceding 
section. 

'  Lewis  V,   Smith,  9  N.  T.  502, 
514  (1854) ;  Corning  v.  Smith,  6  N. 


Y.  82  (1851);  Eagle  Fire  Co.  v. 
Lent,  6  Paige  Ch.  (N.  Y.)  635  (1837). 

^  Eagle  Fire  Co.  v.  Lent,  6  Paige 
Ch.  (N.  Y).  635  (1837).  See  the 
English  authorities  cited  in  this 
case. 

3  Corning  v.  Smith,  6  N.  Y.  83 
(1851)  ;  Meigs  v.  Thomson,  66  How. 
(N.  Y.)  Pr.  466  (1884)  ;  s.  c.  5  N.  Y. 
Civ.  Proc.  106,  containing  an  ex- 
haustive note  on  parlies  defendant 
to  foreclosures  ;  Keeler  v.  Mc- 
Neirney,  6  N.  Y.  Civ.  Proc.  363 
(1883). 

*  Eagle  Fire  Co.  v.  Lent,  6  Paige 
Ch.  (N.  Y.)  635  (1837) ;  Brundage  v. 
Domestic  and  Foreign  Missionary 
Society,  60  Barb.  (N.  Y.)  204,  213 
(1871)  ;  Keeler  v.  McNeirney,  6  N. 
Y.  Civ.  Proc.  363  (1883).  See  Price's 
Ex'rs  V.  Lawton,  27  N,  J.  Eq.  (13 
C.  E.  Gr.)  325  (1876). 

^  Horton  v.  Ingersoll,  13  Mich. 
409  (1865)  ;  Carbine  v.  Sebastian,  6 
111.  App.  564  (1880).     See  Chicago 


§193.]  SENIOR   MOETGAGEES   DEFENDANTS.  233 

not  right  that  the  mortgagee,  in  pursuing  his  remedies, 
should  be  delayed  or  hindered  by  litigation  upon  a  question 
of  title  which  does  not  affect  his  rights  in  any  way.  In 
Indiana  and  Kansas,  however,  adverse  claims  may  be  litigated 
in  a  foreclosure.' 

§  193.  Senior  mortgagees  or  incumbrancers,  claimed 
to  be  junior  lienors,  proper  defendants  for  litigating 
questions  of  priority. — As  has  been  stated  in  the  two  pre- 
ceding sections,  parties  who  claim  adversely  or  paramount 
to  the  mortgagor  are  not  even  proper  defendants  in  the  fore- 
closure of  a  mortgage  ;  but  parties  who  claim  subsequently 
to  the  mortgagor,  but  adversely  and  paramountly  to  the 
mortgagee,  are  proper,  if  not  necessary,  defendants  to  a 
foreclosure  for  the  purpose  of  litigating  questions  of  priority 
in  lien  between  the  mortgage  under  foreclosure  and  their 
claims.  This  rule  allows  such  questions  only  as  affect  the 
rights  of  the  mortgagee  to  be  brought  into  the  action  for 
litigation."  "Whether  a  defendant's  equities  are  prior  and 
superior  to  the  rights  of  the  plaintiff  under  his  mortgage,  or 
junior  and  subordinate  thereto,  must  necessarily  be  deter- 
mined in  the  judgment  for  a  foreclosure  of  the  plaintiff's 
mortgage.  The  defendant  is  not  contesting  the  title  of  the 
mortgagor,  but  simply  asserts  a  right  under  him  prior  in 
point  of  time  to  the  mortgage.  The  question  of  priority 
between  the  two  is  necessarily  involved  in  the  action  and 
proper  to  be  determined  in  it."* 

If  a  mortgagee  or  incumbrancer  claiming  priority  is  not 
made  a  defendant,  his  rights  will  be  in  no  way  affected  by 


Theological  Sem.  v.  Gage,  103  111.  (1848) ;  Payn  v.  Grant,  23  Hun  (N. 

175  (1882).  Contra,  Adair  v.  Mergen-  T.)  134  (1880);  Krutsinger  v.  Brown, 

theim,  (Ind.)   13   West.    Rep.    853  73   Ind.    466    (1880);    Cochran   v. 

(1888);  Robertsv.Wood,38  Wis.  60  Goodell,    131    Mass.    464    (1881); 

(1875).  Dawson  v.  Danbury  Bank,  15  Mich. 

'  Masters  v.  Templeton,   92  Ind.  489,  495  (1867) ;  Hoppock  v.  Ramsey, 

447,  451  (1883) ;   Bradley  v.  Park-  28  N.  J.  Eq.  (1  Stew.)  414  (1877)  ; 

hurst,  20  Kan.  462  (1878) ;  Nooner  Board    of    Supervisors    v.   Mineral 

V.  Short,  20  Kan.  624  (1878).  Point  R.  R.,  24  Wis.  93  (1869). 

•  Brown  v.  Volkening,  64  N.  Y.  «  Brown  v.  Volkening,  64  N.  Y. 

76,  84  (1876) ;  Bank  of  Orleans  v.  76,  84  (1876),  per  Allen,  J. 
8  Barb.   Ch.    (N.    Y.)   316 


234:  SENIOR   MORTGAGEES    DEFENDANTS.  [§  193. 

the  action.  It  is  often  necessary  to  bring  additional  parties 
into  the  action  for  a  complete  determination  of  the  questions 
involved  in  the  issue  ;  in  such  cases  the  application  may  be 
made  by  the  plaintiff  or  the  defendant,  or  the  court  on  its 
own  motion  may  order  such  parties  as  it  deems  necessary  to 
be  brought  within  its  jurisdiction,  but  it  must  be  a  fact  in 
each  case  that  the  party  who  is  brought  into  court  claims 
some  right  or  interest  that  is  adverse  to  the  claims  of  the 
mortgagee  foreclosing.  The  practice  of  making  a  defendant 
to  a  foreclosure  every  party  who  claims  an  interest  in  the 
mortgage  or  in  the  premises,  in  order  to  make  a  complete 
determination  or  settlement  of  all  questions  affecting  the 
mortgage  or  the  premises,  is  broadening  and  increasing  in 
its  application  by  the  courts  of  all  our  states. 

In  New  York  it  is  provided  that  "  any  person  may  be 
made  a  defendant,  who  has  or  claims  an  interest  in  the 
controversy,  adverse  to  the  plaintiff,  or  who  is  a  necessary 
party  defendant,  for  the  complete  determination  or  settle- 
ment of  a  question  involved  therein."' 

Whenever  the  plaintiff  desires  to  litigate  questions  of 
priority,  which  may  affect  his  mortgage,  he  must  state  his 
claims  specifically  in  his  complaint  and  demand  separately 
the  judgment  of  priority  to  which  he  believes  himself 
entitled.  Likewise,  the  defendant  must  raise  by  answer  all 
of  his  claims  to  priority,  or  he  will  be  deemed  to  have 
waived  them  in  the  foreclosure.  His  silence,  however,  will 
not  necessarily  prevent  his  maintaining  an  action  as  plaintiff 
for  affirmative  relief. 


'  N.  T.  Code  Civ.  Proc.  §§  447,      enacted  in  the  codes  of  some  other 
4.i6.     The  same  principle  has  been      states. 


CHAPTER  X. 

PARTIES  DEFENDANT— LIABLE  FOR  THE  MORTGAGE  DEBT. 


GENERAL  PRINCIPLES-POINTS  IN  PRACTICE. 


§  194.  Introductory. 

195.  Greneral  principles — At  com- 

mon-law. 

196.  General  principles-Statutory. 

197.  Theory  of  the  English  and 

common-law  practice. 

198.  Common-law    and  chancery 

practice  opposed  to    judg- 
ments for  deficiency. 

199.  General  principles— Statutory 

provisions    modifying    the 
common-law  rule. 


§  200.  Points  in  practice— The  com- 
plaint. 

201.  Points  in  practice — Thedecree 

of  foreclosure. 

202.  Decree  should  fix  order  of 

liability. 

203.  Decree  must  follow  prayer  of 

the  complaint. 

204.  Points  In  practice — The  judg- 

ment for  deficiency. 


PARTIES  ORIGINALLY  LIABLE. 


§  205,  Introductory. 

206.  Mortgagor,  signing  the  bond 

or  note  or  covenanting  in 
the  mortErage  payment  of  the 
debt,  liable. 

207.  All  persons  signing  the  bond 

or  note  which  the  mortgage 
accompanies  liable. 

208.  All  persons  guaranteeing  the 

bond  and  mortgage  at  its 
inception  liable. 

209.  A  married    woman    signing 

the  bond  or  other  obligation 
liable — General  principles. 

210.  A  married    woman    signing 

the  bond  or  other  obligation 
liable— Act  of  1884  in  New 
York. 

211.  A  married    woman    signing 

the  bond  or  other  obligation 
liable — Rule  in  New  York 


prior  to  1884,  and  in  most 
states  at  present. 
§  212.  Personal  liability  of  married 
woman  mortgaging  her  sep- 
arate estate. 

213.  Persons     originally     liable, 

deceased,  their  estates  lia- 
ble —  Personal  representa- 
tives proper  parties. 

214.  Personal  representat  i ves  prop- 

er defendants  under  recent 
decision  in  New  York. 

215.  Persons  originally  liable,  de- 

ceased, their  heirs  and 
devisees  not  proper  parties. 

216.  Remedies  against  heirs  and 

devisees. 

217.  Person  originally  liable,  mak- 

ing an  assignment  in  bank- 
ruptcy or  voluntarily,  as- 
signee proper. 


§  194.  Introductory. — In  the  consideration  of  parties 
defendant  to  an  action  to  foreclose  a  mortgage,  attention  has 
been  given  in  the  foregoing  pages  to  those  parties  alone  who 
were  necessary  to  enable  the  plaintiff  to  exhaust  his  entire 

235 


236  INTEODUCTORY.  [§  19-1. 

remedy  again jt  the  land  in  a  perfect  manner, — that  is,  to 
those  parties  who  were  necessary,  in  order  to  wipe  out  the 
entire  interest  of  the  mortgagee  and  the  mortgagor  in  the 
premises  at  the  time  of  the  execution  of  the  mortgage,  and 
to  offer  a  perfect  title  to  a  purchaser  at  the  sale,  or  such  a 
title  as  the  courts  would  compel  a  purchaser  to  accept. 

The  examination  of  questions  affecting  such  parties  has 
been  completed ;  but  now,  after  the  plaintiff's  remedy  against 
the  mortgaged  premises  has  been  entirely  exhausted,  there 
remains  for  investigation  the  interesting  question,  whether 
he  has  any  other  remedy  for  the  collection  of  his  mortgage 
debt,  and  if  so,  what  and  against  whom.  The  statutes  and 
decisions  affecting  these  questions  are  in  their  growth  a 
splendid  historical  illustration  of  the  expansive  and  liberal 
tendencies  of  our  equity  system.  There  was  a  time  in  the 
law  of  mortgages  when  the  mortgagee  had  no  remedy  for 
the  collection  of  his  debt,  except  an  action  in  rem  against 
the  land  ;  even  to-day,  the  general  principle  underlying  that 
old  English  law  is  preserved  in  part  by  our  courts,  in  making 
the  land  the  primary  fund  for  the  payment  of  the  debt. 

At  present,  however,  both  in  England  and  in  America,  the 
plaintiff  has  generally  a  personal  remedy  by  action  at  law 
against  all  persons  who  have,  in  any  way,  made  themselves 
liable  for  the  payment  of  the  mortgage  debt ;  and  most  of 
the  states  have  made  provisions  for  the  enforcement  of  that 
remedy  in  the  action  of  foreclosure,  obtaining  as  a  result,  if 
the  proceeds  of  the  sale  of  the  premises  are  insufficient  to  pay 
the  debt,  what  is  commonly  known  as  a  judgment  for 
deficiency. 

It  is  proposed  in  this  chapter  and  in  the  following  chapter 
to  consider  those  parties  who  may  be  made  defendants  in  an 
action  to  foreclose  a  mortgage,  for  the  purpose  of  obtaining 
u  judgment  for  deficiency  against  them  ;  no  particular  con- 
sideration need  be  given  to  parties  against  whom  this  personal 
remedy  may  be  enforced  in  a  separate  action  at  law.  No 
person  who  has  merely  become  liable  for  the  mortgage  debt 
and  who  has  no  interest  in  the  mortgaged  premises  can,  in 
any  sense,  be  said  to  be  a  necessary  party  to  a  foreclosure, 
except  for  the  purpose  of  exhausting  in  the  same  action 


§  195.]         GEKERAL   PRINCIPLES COMMON-LAW.  237 

every  remedy  for  collecting  the  debt.  The  use  of  the  word 
"  necessary,"  with  this  meaning,  is  not  common  in  the  re- 
ported cases;  the  word  "proper  "  is  more  often  used  by  the 
courts,  as  it  indicates  an  option  on  the  part  of  the  plaintiff 
to  make  such  a  person  a  defendant.  In  the  following  pages, 
then,  clearness  and  accuracy  will  be  better  obtained,  if  parties 
are  considered  as  liable  or  not  liable  for  the  mortgage  debt, 
instead  of  being  considered  as  "  necessary  "  or  "  proper  "  to 
the  action ;  for  if  it  is  once  determined  that  a  party  is  liable, 
the  plaintiff  may  make  him  a  party  or  not,  according  to  his 
intention  of  pursuing  his  personal  remedy  against  him,  due 
regard  being  had  always  to  the  relation  of  principal  and 
surety  which  the  defendant  may  sustain  to  any  other  person 
who  is  liable. 

§  195.  General  principles — At  common-law. — The  pur- 
suit of  a  remedy  against  the  land  for  the  collection  of  a 
mortgage  debt  has  always  been  equitable  in  its  nature.  In 
early  English  law  the  land  was  the  only  source  from  which 
payment  could  be  enforced.  As  the  law  of  mortgages  was 
developed,  and  it  became  thoroughly  established  that  a 
mortgage  was  only  a  security,  there  grew  up  the  use  of 
a  bond  or  note  as  the  instrument  of  indebtedness,  which  the 
mortgage  accompanied  merely  as  a  collateral  security;  a 
covenant  of  payment  of  the  debt  was  sometimes  incorpo- 
rated into  the  mortgage  and  used  instead  of  a  bond. 

With  the  introduction  of  the  covenant  of  payment  and 
the  use  of  a  bond  or  note,  there  grew  up  a  line  of  cases'  in 
English  and  in  American  law  which  sustained  an  action 
at  law  for  the  recovery  of  the  debt,  independently  of  the 
mortgaged  premises,  and  also  for  the  recovery  of  any  balance 
which  might  remain  unpaid  after  applying  the  proceeds  of 
a  sale  of  the  land  to  the  payment  of  the  debt.  In  an  early 
action  at  law,  brought  on  a  bond  to  recover  a  deficiency 
arising  on  a  foreclosure  and  sale,  the  defense  was  interposed 
that  the  bond  and  mortgage  had  been  extinguished  by  the 


'  Dunkley  V.  VanBuren,  3  Johns.      sing,  5  Cow.  (N.  T.)  380  (1826);  3 
Ch.  (N.  Y.)  330  (1818),  citing  Englisn      Powell  on  Mortgages,  1003. 
authorities;  Globe  Ins.  Co.  v.  Lan- 


238  GENEEAL   PRINCIPLES STATUTOEY.  [§196. 

foreclosure.  The  court  said,  "The  question  presented  is, 
whether  a  foreclosure  and  sale  of  the  premises  mortgaged  as 
a  collateral  security  is  an  extinguishment  of  the  debt  due  on 
the  bond.  It  most  clearly  is  not,  any  further  than  to  the 
extent  of  the  money  produced  by  the  sale  of  the  mortgaged 
premises."* 

§  196.  General  principles — Statutory. — The  practice  at 
law  and  in  equity  for  the  collection  of  a  mortgage  debt  has 
been  modified  and  assisted,  from  time  to  time,  in  England 
and  in  the  various  states,  by  statutory  provisions.  Under 
the  common-law  foreclosure  of  a  mortgage,  the  distinguish- 
ing characteristic  of  the  practice  with  reference  to  persons 
liable  for  the  mortgage  debt  was,  that  they  could  not  be 
made  parties  defendant  for  the  purpose  of  obtaining  a 
judgment  for  deficiency  against  them ;  a  judgment  for 
deficiency  could  not  be  recovered  against  the  mortgagor, 
even  where  he  was  the  sole  defendant  to  the  action."  The 
universal  and  only  practice  was  for  the  plaintiff  to  sue  at 
law  on  the  bond  or  other  instrument  of  indebtedness, 
which  made  the  defendants  liable  for  any  deficiency  which 
might  remain  unpaid.'  An  action  to  foreclose  under  that 
practice  was  in  no  sense  in  personam,  but  rather  in  rem.*  In 
those  states  where  statutory  provisions  have  not  been  made 
for  obtaining  a   judgment   of   deficiency   in   an   action  to 


»  Globe  Ins.  Co.  v.  Lansing,  5  Cow.  (N.  Y.)  381  (1826) ;  Dunkley  t.  Van 

(N.  Y.)  381  (1826),  per  Savage,  Ch.  Buren,   3  Johns.   Ch.   (N.  Y.)  330 

J.     As  early  as  1799,  Lord  Thurlow  (1818) ;  Hunt  v.  Lewin,  4  Stew.  & 

held  in  Aylet  v.  Hill,  2  Dick.  551,  P.    (Ala.)    138    (1833) ;    Taylor    v. 

that  "a  mortgagee  might  proceed  on  Townsend,    6   Mass.    264   (1810); 

his  bond,  notwithstanding  he  had  Amory  v.  Fairbanks,  8  Mass.  563 

obtained  a  decree  of  foreclosure."  (1793). 

See  Dunkley  v.  VanBuren,  3  Johns.  *  White  t.  Williams,  3  N.  J.  Eq. 

Ch.  (N.  Y.)  330  (1818) ;  also  South-  (2  H.   W.   Gr.)   376    (1836).      The 

worth    V.   Scofleld   51    N.    Y.   513  sdre  facias  practice  of  foreclosure  in 

(1873),  where  an  action  was  main-  Illinois  gives  only  a  judgment  in 

tained  for  an  impaid  balance,  rem ;  see  Osgood  v.  Stevens,  25  HI. 

'  Dunkley  v.  VanBuren,  3  Johns.  89  (1860),  for  an  illustration.    Statu- 

Ch.  (N,  Y.)  330  (1818) ;  Fleming  v.  tory  foreclosures  by  advertisement 

Sitton,  1  Dev.  &  B.  (N.  C.)  Eq.  621  in  New  York  accomplish  only  the 

(1837).  same  result, 

•  Globe  Ins.  Co.  v.  Lansing,  5  Cow. 


§  197.J  LIABILITY COMMON-LAW    PKACTICE.  239 

foreclose  a  mortgage,  this  same  common-law  practice  of  a 
separate  action  at  law  on  the  instrument  of  indebtedness, 
remains  the  only  procedure  that  the  plaintiff  has. 

In  most  of  the  states  statutory  provision  is  now  made, 
however,  for  joining  all  persons  liable  for  the  debt  in  the 
action  to  foreclose,  and  for  decreeing  a  personal  judgment 
of  deficiency  therein  against  them ;  but  even  in  those  states 
the  common-law  practice  is  not  abolished  but  remains  in 
force,  with  the  single  condition  that  to  exercise  it,  permission 
to  sue  at  law  must  first  be  obtained  of  the  court  in  which 
the  mortgage  was  foreclosed.*  But  if  the  mortgagee 
commences  his  action  without  first  obtaining  permission  of  the 
court,  he  can  afterwards  without  prejudice  procure  an  order 
ex  parte,  nunc  pro  tunc,  granting  permission."  The  court  is 
not  bound  to  grant  the  permission  as  a  matter  of  right ;  and 
it  seems  that  where  the  mortgagee  has  voluntarily  refrained 
from  asking  a  decree  for  any  deficiency,  some  satisfactory 
reason  must  be  assigned  for  permitting  him  to  institute  a 
separate  action  at  law  for  its  recovery.' 

§  197.  Theory  of  the  English  and  common-law  practice. 
— When,  in  1786,  it  was  first  decided  that  the  mortgagee 
after  a  foreclosure  sale  in  chancery  could  bring  an  action  at 
law  for  the  balance  of  the  debt  unpaid,  it  was  a  universal 
principle  of  practice,  and  one  which  still  remains  in  force  in 
some  states,  that  relief  in  equity  and  also  at  law  could  not 


'  N.  T.  Code  Civ.  Proc.  §  1628 ;  grantor  who  sues  his   grantee    on 

Equitable  Life  Ins.  Co.  v.  Stevens,  a  contract  ©f  assumption  of  payment 

63    N.   Y.    341    (1875) ;    Matter    of  of  the  mortgage  debt ;    Scofield  v. 

Collins,  17  Hun  (N.  Y.)  389  (1879).  Doscher,  73  N.  Y.  494  (1878),  affg 

See  fost  §  200.     This  permission  is  10  Hun  (N.  Y.)  582  ;   Campbell  v. 

not   required    in    Ohio ;    Avery  v.  Smith,  71  N.  Y.  26  (1877),  afE'g  8 

Vansickle,    35  Ohio  St.  270  (1879) ;  Hun  (N.  Y.)  6. 

nor  in  Iowa,  but  an  action  at  law  on  *  McKernan  v.   Robinson,   84  N. 

the  debt  and  one  to  foreclose  the  Y.  105  (1881),  aff'g  23  Hun  (N.  Y.) 

mortgage  can  not  be  maintained  at  289 ;    a   nunc  pro   tunc   order    to 

the  same  time ;  Brown  v.  Cascaden,  bring  and  continue  an  action  was 

43    Iowa,    103    (1876) ;    County    of  granted   and  sustained  in  Earl    v. 

Dubuque   v.   Koch,   17    I»wa,   229  David,  20  Hun  (N.  Y.)  537  (1880) ; 

(1864).    The  N.  Y.  Code  Civ.  Proc.  aff'd  86  N.  Y.  634  (1881). 

§  1628  is  prohibitory  only  to  parties  *  Equitable  Life  Ins.  Co. v.  Stevens, 

foreclosing,  and  does  not  apply  to  a  63  N.  Y.  341  (1875),  per  Rapallo,  J. 


24:0  NO    DEFICIENCY    JUDGllENTS    FOUMERLY.      [§  198. 

be  decreed  in  the  same  action.*  It  was  for  this  reason  that 
Chancellor  Kent  decided  in  an  early  case,  that  on  a  bill  to 
foreclose  a  mortgage  the  mortgagee  was  confined  to  his 
remedy  on  the  mortgaged  premises,  and  that  the  suit  could 
not  be  extended  to  the  mortgagor's  other  property  nor 
against  his  person,  in  case  the  property  mortgaged  was  not 
sufficient  to  pay  the  debt  for  which  it  was  pledged,  and  that 
the  mortgagee's  further  remedy  was  at  law.* 

A  court  of  equity  could  not  ordinarily  decree  the  payment 
of  the  balance  remaining  unpaid  after  the  foreclosure,  unless 
the  debt,  apart  from  the  mortgage,  was  such  as  a  court  of 
chancery  would  have  jurisdiction  of  and  could  enforce.  But 
the  courts  in  some  states  have  departed  from  this  rule  so  far 
as  to  render  a  judgment  for  deficiency  in  an  action  to  fore- 
close, where  the  mortgagor  is  the  sole  defendant,*  on  the 
ground  that  an  action  against  him,  in  which  a  decree  is 
sought  for  the  foreclosure  of  the  title,  as  well  as  for  a  judg« 
ment  against  him  for  deficiency,  would  not  embrace  different 
causes  of  action,  but  different  remedies  for  the  same  cause.* 

§  198.  Common-law  and  chancery  practice  opposed  to 
judgments  for  deficiency. — When,  however,  a  judgment  for 
deficiency  is  sought  against  a  third  person  who  is  liable 
for  the  debt,  another  principle  of  law  interferes  and  prevents 
his  being  made  a  party  to  the  foreclosure.  It  has  always 
been  a  rule  of  practice  in  chancery  and  in  common-law,  as 
well  as  under  most  codes,  that  though  actions  arising  out  of 
the  same  transactions  or  connected  with  the  same  subject- 
matter  may  be  united  and  different  remedies  demanded 
therein,  yet  the  causes  of  action  must  be  so  united  and  the 


'  2  Hilliard  on  Mortgages,  293  ;  4  »  In  Wightman  v.  Gray,  10  Rich. 

Kent,  183,  and  English  cases  cited.  (S.  C.)  Eq.  518,531  (1859), Chancellor 

^  Dunkley  v.  VauBuren,  3  Johns.  Wardlaw  reviews  the  history  of  this 

Ch.  (N.  Y.)  330  (1818).     See  Stevens  question  in  South  Carolina,  referring 

V.    Dufour,    1    Blackf.   (Ind.)    387  to  the  act  of  1840. 

(1825) ;  also  the  statute  of  1824,  and  *  In  point,  Fithian  v.  Monks,  43 

Youse  V.  M'Creary,  2  Blackf.  (Ind.)  Mo.  502, 515  (1869),  per  Wagner,  J., 

243  (1829);  Markle  v.  Rapp,  2  Blackf.  collating  and  reviewing  the  authori> 

(Tnd.)  2G8  (1829),   holding  that  suit  ties  at  length., 
should  first  be  brought  on  the  bond. 


§  199.]     DEFICIENCY  JUDGMENTS  NOW  BY  STATUTE.  241 


remedies  so  demanded  as  to  affect  all  parties  to  the  action 
in  the  same  manner,  and  to  bind  them  all  to  the  performance 
of  the  same  judgment/  This  rule  is  so  fundamental  and 
essential  that  no  system  of  law  or  practice  can  do  without 
it ;  it  can  be  departed  from  only  with  the  sanction  of  statu- 
tory provisions  in  special  cases. 

§  199.  General  principles — Statutory  provisions  modi- 
fying the  common-law  rule. — The  common-law  rule  of 
procedure  for  the  collection  of  an  unpaid  balance  in  a  fore- 
closure, as  above  explained,  has  been  modified  in  most  of 
our  states,  as  will  be  observed  by  reference  to  their  statutory 
provisions  respecting  foreclosures  conducted  by  equitable 
actions.  The  general  result  is,  that  in  an  action  to  foreclose 
a  mortgage  a  judgment  in  personam''  against  the  mortgagor 


'  Jones  on  Mortgages,  ( 3d  ed. ) 
§  1710. 

»  N.  Y.  Code  Civ.  Proc.  §  1627  ; 
Hunt  V.  Lewin,  4  Stew.  &  P.  (Ala.) 
138  (1833)  ;  Ala.  Rev.  Code,  §  3479  ; 
Hunt  V.  Dohrs,  39  Cal.  304  (1870)  ; 
Englund  v.  Lewis,-25  Cal.  337  (1864); 
Cormerais  v.  Genella,  22  Cal.  116 
(1863),  citing  the  statutes  of  1860 
and  1861  ;  Rowland  v.  Leiby.  14 
Cal.  156  (1859);  Rollins  v.  Forbes, 
10  Cal.  299  (1858)  ;  Stevens  v.  Camp- 
bell, 21  Iiid.  471  (1863);  Duck  v. 
Wilson,  19  Ind.  190  (1862); 
Grimmell  v.  Warner,  21  Iowa,  11 
(1866);  Cooley  V.  Hobart,  8  Iowa,  358 
(1859),  distinguishing  Sands  v. 
Wood,  1  Iowa,  263  (1855),  and  Wilk- 
erson  v.  Daniels,  1  G.  Green  (Iowa), 
179, 188  (1848);  Code  of  Iowa,  §  2084; 
Kentucky  Code,  §376;  formerly 
otherwise,  Crutchfield  v.  Coke,  6 
J.  J.  Marsh.  (Ky.)  89  (1831) ;  Mor- 
gan V.  Wilkins,  6  J.  J.  Marsh.  (Ky.) 
28  (1831) ;  Johnson  v.  Sliepard,  35 
Mich.  115  (1876) ;  Fredman  S.  &  T. 
Co.  V.  Dodge,  3  McAr.  C.  C.  529 
(1879).  See  also  Fleming  v.  Kerken- 
dall,  31  Ohio  St.  568  (1877)  ;  Larimer 
V.  Clemmer,  31  Ohio  St.  499  (1877)  ; 


Conn  V.  Rhodes,  26  Ohio  St.  644 
(1875);  King  v.  Safford,  19  Ohio 
St.  587  (1869);  see  tlie  act  of 
February  19,  1864.  In  Missouri 
a  personal  judgment  for  a  defi- 
ciency may  be  recovered  against  the 
mortgagor,  but  not  against  third 
parties  who  are  liable  for  the  mort- 
gage debt,  as  a  foreclosure  in  that 
state  is  strictly  an  action,  at  lato,  and 
not  in  equity  ;  Fithian  v.  Monks,  43 
Mo.  502  (1869),  citing  the  statute. 
In  Wisconsin  such  a  decree  was  not 
allowable  under  the  Revised  Statutes 
of  1858  ;  Faesi  v.  Goetz,  15  Wis.  231 
(1802,)  stated  the  ground  of  the 
objection  to  such  a  decree  as  a  mis- 
joinder of  causes  of  action  ;  Bordeu 
V.  Gilbert,  13  Wis.  670  (1861) ;  Wal- 
ton v.  Goodnow,  13  Wis.  661  (1861). 
But  the  Laws  of  1862,  chap.  243, 
made  provisions  for  judgments  of 
deficiency  similar  to  those  of  the  New 
York  statute  ;  Bishop  v.  Douglass, 
25  Wis.  696  (1870) ;  Baird  v.  Mc- 
Conkey,  20  Wis.  297  (1866)  ;  Bur- 
dick  V.  Burdick,  20  Wis.  348  (1866). 
In  New  Jersey  the  rule  was  for  many 
years  the  same  as  it  now  is  in  New 
York ;  Jarman  v.  Wiswall,  24  N.  J. 

(16) 


242  DEFICIENCY  JUDGMENTS  NOAV  CY  STATUTE.     [§  190. 

and  all  parties  liable  for  the  mortgage  debt  may  be  decreed 
for  any  residue  of  the  debt  remaining  unsatisfied,  after  a  sale 
of  the  mortgaged  property  and  the  application  of  the  pro- 
ceeds pursuant  to  the  directions  contained  in  the  decree. 

This  rule  differs  from  the  common-law  rule  in  the  two  points 
of  allowing  a  remedy  at  law  and  in  equity  to  Lj  pursued  in 
the  same  action,  and  of  allowing  the  joinder  of  parties  who 
are  not  interested  equally  or  in  the  same  manner  in  the 
subject-matter.  This  innovation  was  first  made  in  New 
York  by  the  adoption  of  the  Revised  Statutes  ;'  the  original 
statute  was  subsequently  incorporated  into  the  first  Code, 
and  reads  as  follows,  as  amended  in  the  Code  of  Civil  Pro 
cedure  :  "  Any  person  who  is  liable  to  the  plaintiff  for  the 
payment  of  the  debt  secured  by  the  mortgage,  may  be  made 
a  defendant  in  the  action  ;  and  if  he  has  appeared,  or  has 
been  personally  served  with  the  summons,  the  final  judgment 
may  awarJ  payment  by  him  of  the  residue  of  the  debt 
remaining  unsatisfied,  after  a  sale  of  the  mortgaged  property, 
and  the  application  of  the  proceeds,  pursuant  to  the  direc- 
tims  contained  therein.*"  The  statutory  provisions  of 
Wisconsin,  Nebraska,  North  Carolina,  South  Carolina,* 
Florida,  and  many  other  states,  are  substantially  the  same. 

The  Supreme  Court  of  the  United  States  in  1864,  in  order 
to  assimilate  the  practice  in  the  circuit  courts  to  the  general 
practice  in  the  state  courts,  adopted  the  rule  that  in  all  suits 
in  equity  for  the  foreclosure  of  mortgages  in  the  circuit 
courts,  or  in  any  of  the  courts  of  the  territories,  a  judgment 
may  be  rendered  for  any  deficiency  found  due  after  applying 


Eq.   (9  C.    E.    Gr.)  267  (1873),  a  Eq.  (7  Stew.)  Ill  (1881);    Newark 

leading  case  ;  but  by  the  act  of  1880,  Savings  Inst.  v.  Forman,  33  N.  J. 

chap.   255,  it  was  provided  that  a  Eq.  (6  Stew.)  436  (1881). 

decree  for  a  deficiency  should  not  *  2  N.  Y.  Eev.  Stat.  191. 

be  entered  in  a  foreclosure  against  ^  N.  Y.  Code  Civ.  Proc.  §  1627. 

parties  who  were  personally  liable  See  Schwinger  v.  Hickok,  53  N.  Y. 

for  the  mortgage  debt.     The  com-  283  (1873) ;   Bank  of  Rochester  v. 

mon-law  practice  of  a  separate  action  Emerson,  10  Paige  Ch.  (N.  Y.)  359 

at  law  is  now  the  only  procedure  in  (1843)  ;    McCarthy    v.    Graham,    8 

that  state  ;  Allen  v.  Allen,  34  N.  J.  Paige  Ch.  (N.  Y.)  480  (1840). 

Eq.  (7  Stew.)  493  (1881) ;    Naar  v.  »  Gray  v.  Toomer,  5  Rich.  (S.  C.) 

rnion  and  Essex  Land  Co.,  34  N.  J.  L.  261,  266  (1852). 


§  200.]  COMPLAINT DEFICIENCY.  243 

the  proceeds  of  the  sale  to  the  satisfaction  of  the  mortgage 
debt.  This  rule  applies  also  to  the  courts  of  the  District  of 
Columbia.' 

§  200.  Points  in  practice  —The  complaint.  —  When 
statutory  provisions  first  allowed  a  judgment  for  deficiency 
to  be  rendered  against  all  persons  liable  for  the  mortgage 
debt  in  an  action  to  foreclose,  the  courts,  to  protect  persons 
so  liable,  adopted  a  rule  requiring  the  plaintiff  to  state  his 
cause  of  action  fully  in  his  complaint,  and  also  to  make  a 
specific  demand  that  the  decree  of  foreclosure  adjudge  that 
the  persons  so  liable  pay  any  deficiency  which  might  arise,' 
and  the  order  in  which  they  should  be  severally  liable.  It 
often  occurs  among  practicing  attorneys,  that  the  demand 
for  a  judgment  of  deficiency  is  made  in  the  most  general 
way  against  the  parties  personally  liable,  but  this  practice  is 
not  commendable  ;  it  is  much  better  and  safer  to  make  the 
demand  specifically,  according  to  the  order  of  liability  of 
the  several  persons  who  are  holden  for  the  mortgage 
debt. 

If  no  demand  is  made  against  a  person  who  is  liable 
for  the  unpaid  balance,  judgment  can  not  be  taken  against 
him,'  but  the  plaintiff  may  still  have  a  separate  action  at 
law ;  not,  however,  without  the  leave  of  the  court  in  which 
the  action  to  foreclose  was  brought.  If  the  plaintiff  intends 
to  exercise  his  right  of  action  against  any  person  so  liable,  it 
is  best  to  do  so  in  the  action  to  foreclose, — for,  when  appli- 
cation is  made  for  leave  to  bring  a  separate  action  at  law, 
the  tendency  of  the  courts  is  to  require  a  good  cause  for  the 


»  Cross  V,  DeValle,  68  U.   S.  (1  186  (1878) ;  Manhattan  Life  Ins.  Co. 

Wall.)  5  (1863) ;  bk.  17  L.  ed.  515  ;  v.  Glover,  14  Hun  (N.  Y.)  153  (1878); 

7  Wash.  Law  Rep.  2.  Foote   v.    Sprague,    13    Kan.    155 

»  Equitable  Life  Ins.  Co.  v.  Stev-  (1874) ;  Giddings  v.  Barney,  31  Ohio 

ens,  1  N.  Y.  Wk.  Dig.  465  (1875) ;  St.  80(1876).     Whenever  a  judgment 

Luce  V.  Hinds,  Clarke  Ch.  (N.  Y.)  for  a  deficiency  is  demanded  against 

453,  457  (1841) ;   Leonard  v.  Morris,  a  married   woman,   facts  must   be 

9  Paige  Ch,  (N.  Y.)  90  (1841).     In  alleged  showing  the  liability  of  her 

point.  Simonson  v.  Blake,  20  How.  separate    estate  ;    McGlaughlin    v 

(N.  Y.)  Pr.  484  (1861) ;  s.  c.  12  Abb.  O'Rourke,  12  Iowa,  459  (1861). 
(N.  Y.)  Pr.  831,  citing  the  old  Code,  *  Giddings  v.  Bai-uey,  31  Ohio  St. 

§275.  See  Tucker  v.Leland,  75  KY.  80(1876). 


244  DEMAND    FOR    DEFICIENCY.        [§§  201-202. 

same  to  be  shown.'  An  action  at  law  can  also  be  maintained 
on  the  note  or  bond,  or  the  covenant  in  the  mortgage,  with- 
out resorting  to  an  equitable  foreclosure,  in  order  to  obtain 
a  personal  judgment  against  those  liable  for  the  payment  of 
the  mortgage  debt.'  In, some  states  actions  at  law  on  the 
bond,  and  for  foreclosure  in  equity,  can  be  maintained  at  the 
same  time.* 

§  201.  Points  in  practice— The  decree  of  foreclosure. — 
The  judgment  of  foreclosure  should  provide  in  the  first  place, 
if  the  proceeds  of  the  sale  are  insufficient  to  pay  the  amount 
reported  due  to  the  plaintiff,  with  the  interest  and  expenses 
of  the  sale  and  the  costs  of  the  action,  that  the  referee  specify 
the  amount  of  such  deficiency  in  his  report  of  sale,  and  the 
defendants  personally  liable  for  the  mortgage  debt  pay 
the  same  to  the  plaintiff.*  Under  the  New  York  Code  of 
Civil  Procedure  direction  is  also  made  for  the  payment 
of  taxes,  assessments  and  water  rates,  which  are  liens  upon 
the  property  sold  ;*  and  in  ascertaining  the  amount  of  the 
deficiency  the  taxes,  assessments,  etc.,  are  to  be  deducted 
as  though  they  were  part  of  the  original  debt.' 

§  202.  Decree  should  fix  order  of  liability. — The  judg- 
ment should  provide  in  the  second  place,  when  it  is  rendered 

»  See  ante    %%  195,   196,   and  the  »  Very  v.  Watkins,   18  Ark.  546 

cases  cited  on  this  point  ;  McKernan  (1857);  Fairman  v.  Farmer,  4  Ind. 

V.  Robinson,  84  N.  Y.  105  (1881);  436  (1853),    based  upon  the  statute 

Scofield  V.  Doscher,  72  N.  Y.  491  of   1831 ;   Ely  v.    Ely.  73  Mass.   (6 

(1878),  citing  Suydam  v.  Bartle,  9  Gray),  439  (1856)  ;  Wilhelm  v.  Lee,  2 

Paige  Ch.  (N.  Y.)  294  (1841).  Md.  Oh.  Dec.  323  (1849) ;  Brown  v. 

«Burr  V.   Beers,    24  N.   Y.    178  Stewart,   1  Md.  Ch.  Dec.  87  (1847). 

(1861) ;   Rosevelt  v.    Carpenter,    28  See    Mayer  v.   Farmers'    Bk.,     44 

Barb.  (N.  Y.)  426  (1858) ;  Brown  v.  Iowa,   212,  214  (1876),    and    Code, 

Cascaden,     43    Iowa,     103    (1876) ;  §§  3163,  3164  (1876),  holding  that  a 

Banta  v.  Wood,   32  Iowa,  469,   474  personal  judgment  recovered  on  the 

(1871) ;  Stephens  v.  Greene  Co.  Iron  bond  will  be  a  lien  on  the  mortgaged 

Co.,   11  Ileisk.    (Tenn.)  71    (1872);  premises  from  the  date  of  the  record- 

Ober  V.  Gallagher,  93  U.  S.  (3  Otto),  ing  of  the  mortgage,  and  that  the 

199  (1876) ;  bk.  23  L.  ed.  829.     The  premises  can  be  sold  under  execu- 

action    can     also     be     maintained  tion  on  the  judgment, 

against  any  person  who  has  guaran-  *  N.  Y.  Code  Civ.  Proc.   ^§  1626, 

teed  the  payment  of  the  bond  and  1627  ;  Supreme  Court  Rule  61. 

mortgage  ;  Hand  v.  Kennedy,  45  N.  ^  N.  Y.  Code  Civ.  Pioc.  §  1676. 

Y.  Supr.  Ct.  (13  J.  &  S.)  385  (1879).  «  See  post  %  204:. 


§  202.]  DECREE   FIXING   LIABILITY.  245 

against  several  persons,  some  of  whom  are  primarily  liable  as 
principals,  and  others  are  liable  only  secondarily  as  sureties, 
that  it  be  enforced  first  against  the  principal  debtors,  and 
then,  so  far  as  it  remains  unsatisfied  only,  against  the  sure- 
ties in  the  order  of  their  liability,  which  should  also  be  fixed  ;' 
upon  the  decree  of  foreclosure,  as  it  fixes  the  order  of  the 
liability  of  the  sureties,  will  be  based  the  judgment  for 
deficiency. 

In  a  case  where  a  mortgagee  had  assigned  a  bond  and 
mortgage,  guaranteeing  their  payment,  and  an  action  was 
brought  against  the  mortgagor  and  guarantor,  and  the  usual 
decree  of  foreclosure  and  sale  was  demanded  with  a  judg- 
ment for  deficiency  against  both,  Chancellor  Walworth  held, 
as  to  the  proper  form  of  decree,  that  "  the  proper  decree, 
where  the  mortgagor  is  himself  a  party  to  the  suit,  and  is 
primarily  liable  for  the  payment  of  the  deficiency,  and 
a  third  person  is  made  a  party  defendant  who  is  only  second- 
arily liable,  is  to  decree  the  payment  of  the  deficiency  by  the 
principal  debtor  in  the  first  instance ;  and  to  decree  payment 
of  the  am.ount  of  such  deficiency  against  his  co-defendant 
who  stands  in  the  situation  of  his  surety  merely,  only  in 
case  it  can  not  be  collected  of  the  principal  debtor,  aft«er  the 
return  of  an  execution  against  such  principal  debtor  unsatis- 
fied. The  decree  in  such  cases  should  also  direct  that,  in 
case  the  amount  of  the  deficiency  is  paid  by  the  defen- 
dant who  is  only  secondarily  liable  for  such  deficiency,  he 
shall  have  the  benefit  of  the  decree,  for  the  purpose  of 
obtaining  satisfaction  for  the  same  amount,  with  the  interest 
thereon,  from  the  defendant  who  is  primarily  liable.  *  *  -^ 

After  the  usual  decree  for  the  foreclosure  and  sale  of  the 
mortgaged  premises,  and  the  payment  of  the  debt  and  costs 
out  of  the  proceeds  of  such  sale,  and  a  decree  over  against 
the  mortgagor  personally  for  the  deficiency,  if  any,  the 
decree  must  further  direct,  that  if  the  complainant  is  not 
able  to  collect  the  amount  of  such  deficiency  out  of  the 
estate  of  the  mortgagor,  upon  the  issuing  of  an  execution, 


'  In  point,  Hand  v.  Kennedy,  45      Youngs  v.  Tnistees,  31  N.  J.  Eq.  (4 
N.Y.  Supr.  Ct.  (13  J.  &  S.)  385(1879);       Stew.)  290  (1879). 


2iG  DECREE   ELKLNG    LT ABILITY.  [§  203. 

against  his  property,  to  the  sheriff  of  the  county  in  which  he 
resides,  or  of  the  county  where  he  last  resided  in  this  state, 
the  defendants  (assignors),  upon  the  return  of  such  execu- 
tion unsatisfied,  pay  so  much  of  such  deficiency  as  remains 
unpaid.  *  *  *  The  decree  must  further  direct  that,  if  they 
pay  the  amount  thus  decreed  against  them  personally,  or  if 
the  same  is  collected  out  of  their  property,  they  shall  have 
the  benefit  of  the  decree  against  the  mortgagor,  for  the 
purpose  of  enabling  them  to  obtain  remuneration  from  him, 
to  the  same  extent."* 

§  203.     Decree  must  follow  prayer  of  the  complaint.— 

The  judgment  for  foreclosure,  in  fixing  the  order  of  liability, 
must  follow  the  demand  in  the  complaint,  if  judgment  is 
taken  by  default  or  upon  the  report  of  a  referee.  This 
judgment  is  not  a  personal  one  in  any  sense,  but  is  more  in 
the  nature  of  a  judgment  in  rem;  the  plaintiff  can  not, 
therefore,  have  a  contingent  personal  judgment  in  the  decree 
of  foreclosure  against  any  of  the  defendants."  Judgments  of 
foreclosure  are  too  often  entered  without  decreeing  the 
respective  liabilities  of  the  different  parties  to  the  action. 
This  may  not  render  the  judgment  itself  defective  in  any 
way,  -but  it  often  causes  litigation  among  the  defendants  in 
order  to  determine  their  respective  liabilities. 

A  judgment  for  deficiency  can  not  be  rendered  against  a 
person  liable  for  the  debt,  "  unless  he  has  appeared  or  has 
been  personally  served  with  the  summons  "  or  has  submitted 
himself  to  the  jurisdiction  of  the  court.*     Jurisdiction  over 


•  Jones  V.  Stcinlierg,  1  Barb.  Ch.  decree  acfiinst  the  obligor,  TTind«, 

(N.    Y.)    252    (1845).     In    Luce  v.  for  the  deliciency,  and  in  case  an 

Hinds,  Clarke  Ch.  (N.Y.)  456  (1841),  execution    against  Hinds  does    not 

a    case    similar    in    all    respects  to  realize  the  money,  an  execution  must 

Jones  V.  Steinberg,  ViceChancellor  afterwards  go  against  Stow  (guar&u- 

Whittlesey  says,    "  I  shall  be,  there-  tor)  for  any  balance  due  after  sale  of 
fore,  compelled  to  decree  against  the  '     the  premises,  and  execution  un^atis- 

defendant,  according  to  the  prayer  fied  against  the  obligor  Hinds." 

of  the  complainant's  bill.    The  order  *  Cobb  v.  Thornton,  8  How.  (N. 

must  be  a  reference  to  a  master  to  Y.)   Pr.    66    (1852).      See    Welp  v. 

compute  the  amount  due, —the  final  Guuther,  48  Wis.  54-3,  (1819). 

order    will   be   for   the   sale   of   the  »  N.   Y.   Code  Civ.  Proc.  §1627. 

mortgaged  premises,  and  a  personal  The  same   rule   prevails   in    Ohio  ; 


§  204.]  JUDGMENT   FOE   DEFICIENCY.  247 

the  person  is  a  prior  requisite  in  New  York  practice,  and 
doubtless  is  in  the  practice  of  other  states.  Consequently 
a  personal  judgment  for  deficiency  can  not  be  obtained 
against  a  non-resident,  unless  he  appears  in  the  action ;  and 
though  such  a  judgment  be  docketed  against  a  non-resident 
after  service  by  publication  or  otherwise,  it  will  be  irregular 
and  void.* 

§  204.    Points  in  practice — The  judgment  for  deficiency. 

— The  judgment  for  deficiency,  which  courts  are  now  gener- 
ally authorized  to  decree  against  parties  personally  liable  for 
the  mortgage  debt,  is  a  judgment  for  the  balance  of  the 
debt  remaining  unsatisfied  after  a  sale  of  the  mortgaged 
premises,  and  the  application  of  the  proceeds  of  the  sale  to 
its  payment.*  .  If  part  of  the  debt  is  due  and  part  not  due, 
the  judgment  for  deficiency  can  be  rendered  only  for  what 
is  due;  a  personal  judgment  can  not  be  legally  rendered  for 
a  debt  which  has  not  matured.*  The  first  step  is  to  ascer- 
tain the  amount  of  the  unpaid  balance.  The  judgment 
consequently  can  not  be  rendered  even  contingently,  until 
after  the  master  in  chancery  or  the  referee  appointed  to  sell 
has  made  and  filed  his  report.*  It  is  the  usual  practice  for 
the  referee  to  state  the  amount  of  deficiency  in  his  report  of 
sale,  and  upon  the  confirmation  of  the  report  judgment  for 
the  deficiency  may  be  docketed.*     It   seems  from    recent 


publication  of  the    summons  does  *  Cobb  v.  Thornton,  8  Ho-rr.  (N. 

not  give  jurisdiction  for  a  personal  Y.)  Pr.   66  (1852).     See  Lipperd  v. 

judgment    against     a     defendant ;  Edwards,  39  Ind.  165  (1872). 

Wood  V.  Stanberry,  21  Ohio  St.  142  *  Bank  of  Rochester  v.  Emerson, 

(1871).                                             '  10  Paige   Ch.  (N.  Y.)  359   (1848); 

'  Gibbs  V.  Queen  Ins.  Co.,  63  N.  McCarthy  v.  Graham,  8  Paige  Ch. 

Y.  131  (1875);  Schwinger  v.  Hickok,  (N.  Y.)  480  (1840);  Bache  v.  Doscher. 

58  N.  Y.  280  (1873).  41  N.  Y.  Supr.  Ct.  (9  J.  «&  S.)  150 

■■!  See    Mutual    Life   Ins.    Co.   v.  (1876) ;  aflf'd  67  N.  Y.  429.     In  Cali- 

Southard,  25  N.  J.  Eq.  (10  C.   E.  fornia  there  can  be  no    judgment 

Gr.)  337  (1874),  for  the  practice  in  for  a  deficiency,  till  the  referee  has 

New  Jersey,  which  is  very  similar  made   his    return    that    a    balance 

to  that  in  New  York.     See  the  cases  remains  unpaid  after  the  sale  ;  Hunt 

cited  below.  v.  Dohrs,  39  Cal.  304  (1870),  citing 

»  Skelton    ▼.  Ward,    51    Ind.    46  the  Practice  Act,  §  246.   See  also  Cul- 

(1875);  Smith  v.  Osborn,  33  Mich.  ver  v.  Rogers,  28  Cal.  520  (1865); 

410(1876).  Englund    v.    Lewis,    25    Cal.    337 


248 


JUDGMENT    FOR    DEFICIENCY. 


[§  204. 


decisions  that  a  confirmation  of  the  referee's  report  of  sale  is 
not  necessary  prior  to  issuing  execution.* 

The  sum  paid  for  the  premises  at  the  foreclosure  sale 
must  be  taken  as  a  conclusive  determination  of  their  value 
as  between  the  parties  to  the  suit.'  In  determining  the 
amount  of  the  judgment  for  deficiency,  there  must  be 
deducted  from  the  proceeds  of  the  sale  the  costs  and 
expenses  of  the  plaintiff's  attorney  in  conducting  the  action, 
the  expenses  and  fees  of  the  referee  making  the  sale,  and  all 
taxes, ^  assessments  and  water  rates*  which  are  liens  upon 
the  property  sold  ;  the  amount  of  the  proceeds  then  remain- 
ing is  to  be  deducted  from  the  amount  of  the  debt  and  interest 
as  stated  in  the  decree  of  foreclosure,  and  the  balance  will 
furnish  the  amount  for  the  judgment  of  deficiency. 

It  has  been  held  erroneous  to  enter  a  judgment  for  defi- 
ciency for  a  portion  of  the  mortgage  debt  which  has  become 
due,  although,  because  the  premises  were  so  situated  that 
they  could  not  be  sold  in  parcels,  the  entire  proceeds  of  the 
foreclosure  sale  were  applied  to  pay  the  debt  due  and  to 
become  due.* 


(1864) ;  Cormerais  v.^  Genella,  22 
Cal.  116  (1863) ;  Rowland  v.  Leiby, 
14  Cal.  156  (1859). 

'  Bache  v.  Doscher,  41  N.  Y. 
Supr.  Ct.  (9  J.  &  S.)  150  (1876);  aff'd 
67  N.  Y.  429;  Bicknell  v.  Byrnes,  23 
How.  (N.  Y.)  Pr.  486  (1862) ;  Cobb 
V.  Thornton,  8  How.  (N.  Y.)  Pr.  66 
(1852);  Springsteen  v.  Gillett,  30 
Hun  (N  Y.)  260  (1883) ;  Moore  v. 
Shaw,  15  Hun  (N.  Y.)  428  (1878); 
ali'd  77  N.  Y.  513  (1879).  In 
Wisconsin  a  prior  order  of  con- 
firmation is  necessary ;  Laws  of 
1862,  chap.  243  ;  Tormey  v.  Ger- 
hart,  41  Wis.  54  (1876);  also  in 
Nebraska,  Clapp  v.  Maxwell,  13 
Neb.  542  (1882).  See  White  v.  Zust, 
28  N.  J.  Eq.  (1  Stew.)  107  (1877). 
In  Michigan  a  special  application 
must  be  made  to  the  court,  before 
execution  can  issue  on  a  judgment 
of  deficiency  ;  McCricket  v.  Wilson, 


50  Mich.  513  (1883);  Gies  v. 
Green,  42  Mich.  107  (1879).  In 
Leviston  v.  Swan,  33  Cal.  480  (1867), 
it  was  held  that  the  clerk  should 
enter  up  judgment  for  the  deficiency 
on  the  filing  of  the  referee's  report 
of  sale  without  the  further  order  of 
the  court. 

*  In  point,  Snyder  v.  Blair,  33  N. 
J.  Eq.  (6  Stew.)  208  (1880),  collating 
and  reviewing  the  cases. 

3  N.  Y.  Code  Civ.  Proc.  §  1676  ; 
Cornell  v.  WoodrufE,  77  N.  Y.  203 
(1879);  Fleishauer  v.  Doellner,  60 
How.  (N.  Y.)  Pr.  438  (1881). 

*  Marshall  v.  Davis,  78  N.  Y.  414, 
422  (1879),  reversing  16  Ilun  (N.  Y.> 
606;  Argald  v.  Pitts,  78  N.  Y. 
239  (1879) ;  Cornell  v.  Woodruff,  77 
N.  Y.  205  (1879). 

*  Taggert  v.  San  Antonio,  etc.,  18 
Cal.  460  (1861)  ;  Skelton   v.   Ward, 

51  Ind.    46    (1875);    Darrow    T. 


§§  205-206.J  MOKTGAGOE    LIABLE.  249 

PARTIES    ORIGINALLY   LIABLE. 

§  205.  Introductory. — For  the  purpose  of  a  logical 
analysis,  the  subject-matter  of  this  chapter  and  the  following 
chapter  will  be  considered  under  the  sub-divisions,  Parties 
Originally  Liable  and  Parties  Subsequently  Liable.  Some 
writers  have  considered  the  following  subject-matter  under 
the  headings.  Parties  Primarily  Liable  and  Parties  Second- 
arily Liable ;  but  this  division  is  not  logical  except  as 
primary  means  original,  and  secondary  means  subsequent ; 
furthermore,  the  words  "primary"  and  "secondary"  are  too 
suggestive  of  the  relation  of  principal  and  surety,  which 
would  certainly  not  be  a  logical  division  of  this  subject,  as 
the  relation  is  so  variable  and  subject  to  change,  whenever 
a  new  party  becomes  related  to  a  bond  and  mortgage  in 
such  a  way  as  to  make  himself  personally  liable  for  the 
debt. 

The  logical  division,  Original  and  Subsequent,  also  fur- 
nishes an  opportunity  to  consider  the  parties  liable  in 
chronological  order.  In  the  following  part  of  this  chapter, 
then,  attention  is  to  be  given  to  parties  who  originally  be- 
came liable  for  the  mortgage  debt, — that  is,  to  those  who 
became  liable  at  the  inception  of  the  bond  and  mortgage. 
It  is  to  be  remarked  again,  that  parties  are  not  considered 
with  reference  to  their  being  "necessary"  or  "proper," 
but  with  reference  to  their  liability,  it  remaining  at  the 
option  of  the  plaintiff  whether  he  will  make  them  parties  or 
not,  due  regard  being  had  always  to  the  relation  of  principal 
and  surety. 

§  206.  Mortgagor,  signing  the  bond  or  note  or  cove- 
nanting in  the  mortgage  for  payment  of  the  debt,  liable. — 

The  fact  that  a  mortgagor  who  signs  a  bond  or  note,  which 
is  accompanied  by  a  mortgage,  for  the  payment  of  a  sum  of 
money,  or  who  covenants  in  the  mortgage  without  a  bond 
or  note  to  pay  the  same,  is  liable  for  the  payment  of  that 
sum,  rests  upon  the  fundamental  principle  of  law,  that  every 
man  must  perform  his  contracts  and  is  liable  for  any  breach 


Scullin,  19  Kan.  57  (1877)  ;  Smith  v.       forth    v.    Coleman,     23    Wis.    528 
Osborn,  33  Mich.  410  (1876) ;  Dan-      (180«). 


150 


MUJiiaAaOB   PEKSOifALLy    LIABLE. 


[§  207. 


of  them.*  There  is  scarcely  a  case  in  which  the  question  of 
deficiency  is  considered  that  does  not  give  an  obiter  dictum, 
that  the  mortgagor  is  the  first  person  to  become  liable  for 
the  payment  of  the  debt."  That  his  relation  as  principal 
may  be  changed  to  that  of  surety,  will  be  seen  hereafter ;  but 
his  name  once  subscribed  to  the  contract  of  indebtedness, 
he  will  always  remain  liable. 

If  no  note,  bond  or  other  legal  obligation  was  given  with 
the  mortgage,  the  plaintiff  will  be  confined  to  the  mortgaged 
premises  for  his  remedy,'  unless  the  claim  on  which  the 
mortgage  is  founded  was  an  equitable  one,  or  there  was  a 
debt  existing  independent  of  the  mortgage.*  The  same  is 
true  where  the  debt  is  barred  by  the  statute  of  limitations,  or 
the  obligor  has  been  discharged  in  bankruptcy  proceedings." 

§  207.  All  persons  signing  the  bond  or  note  which  the 
mortgage  accompanies  liable. — In  an  action  to  foreclose 
a  bond  and  mortgage,  where  the  bond  has  been  executed  by 


»  Schwinger  v.  Hickok,  53  N.  Y. 
280  (1873)  ;  Hunt  v.  Chapman,  51 
N.  Y.  555  (1873)  ;  Curtiss  v.  Tripp, 
Clarke  Ch.  (N.  Y.)  317  (1840) ;  Marsh 
V.  Pike,  10  Paige  Ch.  (N.  Y.)  595 
(1844) ;  Bank  of  Rochester  v.  Emer- 
son, 10  Paige  Ch.  (N.  Y.)  359  (1843); 
Leonard  v.  Morris,  9  Paige  Ch.  (N. 
Y.)  90  (1841).  See  National  Fire 
Ins.  Co.  V.  McKay,  21  N.  Y.  191, 
193  (1860),  where  Comstock,  Ch.  J., 
says  oSiYer,  ''S.  was  the  mortgagor 
and  was  personally  bound  for  the 
payment  of  the  debt."  See  Wads- 
worth  V.  Lyon,  93  N.  Y.  201  (1883) ; 
Price  V.  State  Bank,  14  Ark.  50 
(1853) ;  Snell  v.  Stanley,  58  111.  31 
(1871)  ;  Stevens  v.  Campbell,  21  lud. 
471  (1863)  ;  Darrow  v.  Scullin,  19 
Kan.  57  (1877)  ;  Foote  v.  Sprague, 
13  Kan.  155  (1874),  where  the  notes 
were  all  due  by  the  terms  of  an 
interest  clause  and  judgniciit  for  the 
whole  amount  was  held  proper  ; 
Conn.  Mat.  Life  Ins.  Co.  v.  Tyler, 
8  Biss.  C.  C.  369  (1878),  holding  that 
the  fact  that  a  mortgagor  has  con- 


veyed his  equity  of  redemption  in 
the  premises  does  not  release  him 
from  his  personal  liability  on  the 
bond.  See  contra  in  New  Jersey 
since  the  act  of  1880,  which  provides 
that  a  judgment  for  deficiency  shall 
not  be  decreed  in  a  foreclosure  ; 
Allen  V.  Allen,  34  N.  J.  Eq.  (7 
Stew.)  493  (1881)  ;  Naar  v.  Union  & 
E.  L.  Co.,  34  N.  J.  Eq.  (7  Stew.) 
Ill  (1881). 

2  Calvo  V.  Davies,  73  N.  Y.  211, 
215  (1878)  ;  Birnie  v.  Main,  29  Ark. 
591  (1874). 

^  Coleman  v.  VanT^enssdaer,  44 
How.  (N.  Y.)  Pr.  368  (1873) ;  Hunt 
V.  Lewin,  4  Stew.  &  P.  (Ala.)  138 
(1833) ;  Fletcher  v.  Holmes,  25  Ind. 
458  (1865) ;  VanCrunt  v.  Mismer,  8 
Minn.  232  (1863). 

*  Gaylord  v.  Knapp,  15  Hun  (N. 
Y.)  87  (1878).  "Every  mortgage 
implies  a  loan  and  every  loan  a 
debt  ;"  Critcherv.  Walker,  1  Murpli. 
(N.  C.)  488  (1810). 

*  Kiuloch  V.  Mordecai,  1  Speer's 
(S.  C.)  Eq.  404  (1844). 


§207.]         AT.T.   PEESOlfS   SIGNING   BOND    LIABLE.  251 

persons  other  than  the  mortgagors,  as  well  as  by  the  mort- 
gagors, it  is  proper  to  make  such  obligors  parties  to  the 
action  and  to  demand  against  any  or  all  of  them  a  judgment 
for  deficiency,  as  they  are  all  liable  upon  the  bond  for  the 
debt.'  This  is  also  true  if  the  instrument  of  indebtedness 
is  a  note'  or  other  form  of  obligation.'  The  authority  to 
join  such  obligors  in  an  action  to  foreclose  a  mortgage  and 
to  demand  a  personal  judgment  for  deficiency  against  them, 
is  derived  from  the  codes  and  statutes  of  the  several 
states.* 

In  a  recent  foreclosure  in  New  York,  where  the  bond  had 
been  signed  by  others  than  the  mortgagors,  the  court  held  : 
•'The  Revised  Statutes  provide  that  if  the  mortgage  debt  be 
secured  by  the  obligation  or  other  evidence  of  debt,  of  any 
other  person  besides  the  mortgagor,  the  complainant  may 
make  such  person  a  party  to  the  bill,  and  the  court  may  de- 
cree payment  of  the  balance  of  such  debt  remaining 
unsatisfied  after  a  sale  of  the  mortgaged  premises,  as  well 
against  such  other  person  as  the  mortgagor,  and  may  enforce 
such  decree  as  in  other  cases.  The  same  provision  is,  in 
substance,  continued  in  the  Code.  These  authorities  justify 
the  plaintiff  in  joining  in  this  action  all  the  parties  to  the 
bond,  the  payment  of  which  is  secured  by  the  mortgage 
sought  to  be  foreclosed,  and  in  demanding  a  judgment 
against  all  the  obligors  for  any  deficiency  which  may  arise.'" 

If  a  husband  executes  with  his  wife  a  bond,  to  secure  which 
a  mortgage  is  given  on  her  separate  real  estate,  he  will 
be  liable  for  a  personal  judgment  in  a  foreclosure.*  A 
person   who  has  signed   the   bond   or  note,   but   not   the 


>  Scofield  V.  Doscher,    72  N.  Y.  »  Thome  v.  Newby,  59  How.  (N. 

491   (1878) ;  Bathgate  v.  Haskin,  59  T.)  Pr.  120  (1880), i^er  VanVorst,  J.; 

N.  Y.  533  (1875) ;  Thome  v.  Newby,  Sprague  v.  Jones,  9  Paige  Ch.  (N.  Y.) 

59  How.  (N.  Y.)  Pr.  120  (1880).     In  395  (1842),  was  very  similar,  in  that 

point,   Suydam  v.  Bartle,   9  Paige  the  bond  was  signed  by  two  persons 

Ch.  (N.  Y.)  294,  295  (1841).  and  the  mortgage  by  only  one  ;  both 

'  Davenport  Plow  Co.   v.  Mewis,  obligors  on  the  bond  were  held  liable 

10  Neb.  317  (1880).  for  a  judgment  of  deficiency. 

*  Fond  du  Lac  Harrow    Co.    ▼.  *  Conde  v.  Shepard,  4  How.  (N 
Haskins,  51  Wis.  135  (1881).  Y.)  Pr.  75  (1849). 

*  N.  Y.  Code  Civ.  Proc,  §  1627. 


252         PARTIES  GUAEANTEELNG  MORTGAGE  LIABLE.   [§208. 

mortgage,  is  not  an  indispensable  party  to  maintain  the 
action  or  to  perfect  the  title,  as  he  has  no  interest  in  the 
premises.* 

Where  statutory  provision  has  not  been  made  for  judg- 
ments of  deficiency,  the  obligation  upon  the  bond  can  be 
enforced  only  by  a  separate  action  at  law.  Folger,  J.,  has 
said,  in  considering  this  question,  that  the  statute  "  was 
enacted  to  give  the  court  in  which  the  foreclosure  of  the 
mortgage  was  had  full  jurisdiction  over  the  whole  subject, 
and  to  save  the  necessity  of  actions  at  law,  and  to  allow  one 
court  to  dispose  of  the  whole  subject,  instead  of  compelling 
parties  to  resort  to  other  tribunals  ;  *  *  *  and  is  applicable 
to  every  case  where  the  owner  of  the  mortgage  has  any 
personal  security  for  the  mortgage  debt,  whether  it  be  the 
bond  of  the  mortgagor  or  the  covenant  of  another  person.'"' 

§  208.  All  persons  guaranteeing  the  bond  and  mort- 
gage at  its  inception  liable. — All  persons  who  guarantee 
the  payment  or  collection  of  a  bond  and  mortgage  by  a 
separate  instrument,  at  the  time  of  their  execution  or  before 
their  transfer,  are  liable  for  the  mortgage  debt  and  may  be 
made  parties  to  an  action  to  foreclose,  for  the  purpose  of 
recovering  a  judgment  for  deficiency  against  them  as  stated 
in  the  preceding  section.' 

There  are  almost  no  cases  ruling  directly  upon  this  question, 
but  from  analogous  cases*  and  the  general  principles  of  law 
applicable  to  guarantors  and  sureties,  the  proposition  of  this 
section  is  unquestionably  true.  In  an  action  where  it 
appeared  that  the  mortgagee  had  assigned  his  mortgage, 


>  Deland   ▼.    Mershon,    7  Clarke  6  Paige  Ch.  (N.  T.)  43  (1836) ;  Bur- 

(lowa),    70    (1858).      In    Milroy  v.  dick  v.  Burdick,  20  Wis.  348  (1866). 

Stockwell,  1  Cart.  (Ind.)  35  (1848),  it  See  Grant  v.   Griswold,   82  N.   Y. 

was  held  that  such  an  obligor  was  a  569  (1880) ;   Hunt  v.  Purdy,  82  N. 

necessary  party,  and  that  upon  his  Y.  486  (1880). 

death  the  action  should  be  revived  *  Jones  v.  Steinbergh,  1  Barb.  Ch. 

against  his  personal  representatives.  (N.  Y.)  250  (1845) ;  Luce  v.  Hinds, 

«  Scofield  V.  Doscher,   72  N.   Y.  Clarke  Ch.    ( N.    Y. )  453    ( 1841 ) ; 

491,  493  (1878).  Bristol  v.  Morgan,  3  Edw.  Ch.  (N. 

•Mathews  v.  Aikin,  1  N.  Y.  595  Y. )   142  (1837);    Curtis  v.   Tyler, 

(1848) ;  Curtis  v.  Tyler,  9  Paige  Ch.  9  Paige  Ch.  (N.  Y.)  435  (1842). 
(N.  Y.)  435  (1842) ;  Guion  v.  Kuapp, 


§  209.]  MAKKIED    WOMAN    LIABLE.  253 

guaranteeing  its  payment,  and  subsequently  taken  the  bond 
of  a  third  person  as  a  further  security  for  the  payment  of 
such  mortgage,  Chancellor  Walworth  held  that  the  third 
person  was  liable  for  a  judgment  of  deficiency  in  the  fore- 
closure, saying,  "  It  is  well  settled,  however,  that  where  a 
surety,  or  a  person  standing  in  the  situation  of  a  surety,  for 
the  payment  of  a  debt,  receives  a  security  for  his  indemnity 
and  to  discharge  such  indebtedness,  the  principal  creditor  is, 
in  equity,  entitled  to  the  full  benefit  of  that  security."* 

§  209.  A  married  woman  signing  the  bond  or  other 
obligation  liable — General  principles. — With  the  general 
growth  during  the  past  century  in  England  and  in  America 
of  legislation  and  decisions,  enlarging  the  powers  of  married 
women  over  the  disposition  of  their  property,  there  has  been 
developed  a  corresponding  or  correlative  line  of  decisions  in 
the  courts,  holding  them  and  their  separate  estates  respon- 
sible for  any  breach  of  their  contracts.  It  is  not  within  the 
scope  of  this  work  to  discuss  the  history  or  principles  of  this 
very  interesting  branch  of  the  law.'  Our  attention  must  be 
confined  simply  to  a  general  statement  of  the  latest  rulings 
of  the  courts  upon  the  question  of  a  married  woman's 
liability  for  the  payment  of  a  mortgage  debt,  and  to  showing 
that  she  is  a  proper  party  to  a  foreclosure,  if  a  judgment  for 
deficiency  is  desired  against  her.  The  common-law  doctrine, 
which  rendered  a  married  woman  totally  incapable  of  making 
contracts,  practically  remains  in  force  in  no  state,  but  has 
been  modified  by  legislation  or  innovations  of  the  courts. 


•  Curtis  V.  Tyler,  9  Paige  Ch.  (N.  §§  106-118.  The  history  and  prin- 
T.)  435  (1842),  giving  citations  in  ciples  of  the  same  law  in  the  state  of 
point.  In  Maure  v.  Harrison,  1  Eq.  New  York  are  given  in  greater 
Ca.  Abr.  93  (1692),  it  was  held  that  detail  by  Abner  C.  Thomas  in  his 
in  equity  a  bond  creditor  was  entitled  Treatise  on  the  Law  of  Mortgages 
to  the  benefit  of  all  counter-bonds  (2d  ed.),  §§  605-619.  To  the  student 
or  collateral  security  given  by  the  of  equity  jurisprudence,  the  develop- 
principal  debtor  to  his  surety.  ment  of  this  branch  of  the  law  iu 

*  The  history  of  the  law  affecting  England  and  America  is  very  inter- 
married women's  contracts  and  their  esting,  as  its  different  stages  can 
control  of  their  separate  property  is  be  so  accurately  traced  in  the 
ably  discussed  by  Leonard  A.  Jones  legislation  and  decisions  of  the  two 
in  his  Treatise  on  Mortgages  (3d  ed.),  countries 


254 


MAIlillED    WOMAjS^    LIABLE WHEN. 


[§  210. 


until,  at  present,  it  is  a  universal  rule  that  a  married  woman 
can  bind  her  separate  estate  for  all  purposes  that  may  be 
necessary  to  enable  her  to  hold  and  enjoy  the  same. 

§  210.     A  married  woman  signing  the  bond  or  other 
obligation  liable— Act  of  1884  in  New  York. — The  New 

York  act  of  1 884  in  relation  to  the  rights  and  liabilities  of  mar- 
ried women,  has  rendered  obsolete  a  great  majority  of  the 
decisions  adjudicating  the  liabilities  of  married  women  and 
their  separate  estates  for  the  performance  of  their  contracts 
under  the  acts  of  1848-49  and  1860-62.  That  act  provides 
that  "A  married  woman  may  contract  to  the  same  extent, 
with  like  effect  and  in  the  same  form  as  if  unmarried,  and 
she  and  her  separate  estate  shall  be  liable  thereon,  whether 
such  contract  relates  to  her  separate  business  or  estate  or 
otherwise,  and  in  no  case  shall  a  charge  upon  her  separate 
estate  be  necessary."* 


>  Laws  of  1884,  chap.  381.  This 
act  was  passed  A[ay  28,  1884,  and  by 
its  provisions  took  effect  immediate- 
ly, so  that  all  contracts  made  prior 
to  May  28,  1884,  are  to  be  adjudi- 
cated according  to  the  statutes  and 
decisions  in  force  prior  to  that  date. 
It  is  also  provided,  "that  this  act 
shall  not  affect  nor  apply  to  any 
contract  that  sliall  be  made  between 
husband  and  wife." 

The  position  of  Sanf  ord  E.  Church, 
Chief  Judge  of  the  New  York  Court 
of  Appeals,  in  relation  to  questions 
effecting  a  married  woman's  liability 
for  her  contracts,  must  be  recognized 
here  ;  his  opinions  have,  undoubted- 
ly had  a  strong  influence  in  effect- 
ing the  passage  of  this  act.  His  de- 
cisions have,  at  least,  been  almost 
prophetic.  In  the  leading  case  of 
the  Manhattan  B,  &  M.  Co.  v. 
Thompson,  58  N.  Y.  84  (1874),  he 
said :  "If,  when  the  legislature 
changed  the  common  law  in  essential 
particulars  in  regarding  the  interests 
ia  property  of  the  husband  and  wife 


to  a  considerable  extent  as  distinct 
and  independent,  and  in  recognizing 
the  capacity  of  the  wife  to  judge  and 
provide  for  what  her  own  welfare 
requires  in  acquiring  and  holding 
the  legal  title  to  property,  and  man- 
aging and  disposing  of  the  same  as  if 
unmarried  and  without  subjection  to 
the  control  of  her  husband,  the 
courts  had  adopted  as  a  reasonable 
and  legitimate  sequence,  the  correla- 
tive rule  of  capacity  to  contract  debts 
as  if  unmarried,  restricted  only  to 
their  collection  from  separate  prop- 
erty, it  might  well  be  claimed  that 
the  rights  of  married  women  would 
have  been  as  well  if  not  better  pro- 
tected practically,  sound  public 
policy,  and  business  morality  more 
promoted,  and  a  flood  of  expensive 
and  vexatious  litigation  prevented. 
"  Courts  of  equity  in  England 
have  uniformly  exercised  a  power  of 
enforcing  contracts  of  married 
women  against  their  separate  estates, 
which  has  practically  produced  this 
result  (2  P.  Wms.  144  ;  1  Cr.  &  Ph. 


§  211. J       FORMER  RULE  IN  NEW  YORK.  255 

This  law  can,  of  course,  have  no  ex  post  facto  application 
and  for  a  decade,  at  least,  the  decisions  under  the  old 
statutes  will  be  of  importance,  and  must  be  applied  to  cases 
arising  on  contracts  made  prior  to  1884.  All  decisions  which 
have  been  rendered  in  New  York  upon  the  liability  of  a 
person  obligated  for  a  mortgage  debt,  to  have  a  judgment 
for  deficiency  rendered  against  him,  will,  hereafter,  apply 
with  equal  force  to  a  married  woman.  In  Massachusetts* 
and  some  other  states,  substantially  the  same  law  is  in  force, 
while  in  England  the  courts  of  equity  have  never  held  other- 
wise than  that  a  married  woman's  separate  estate  was  liable 
for  every  debt  she  might  contract  in  any  way.  Regarding 
her  separate  estate  she  can  contract  as  freely  as  a  man  ;  and 
her  estate  is  equally  liable  for  all  her  obligations,  whatever 
their  form  or  nature.'  At  laWj  however,  she  and  her  separate 
estate  are  not  liable. 

§211.  A  married  woman  signing  the  bond  or  other 
obligation  liable — Rule  in  New^  York  prior  to  1884,  and  in 
most  states  at  present. — The  decisions  which  make  a 
married  woman  who  has  signed  a  bond  or  other  obligation, 
to  which  a  mortgage  is  collateral,  liable  for  a  judgment  of 
deficiency  in  an  action  to  foreclose  a  mortgage,  are,  under 
the  same  state  of  facts,  precisely  the  same  in  their  reasoning 
and  conclusions  as  those  which  establish  her  liability  for  the 
performance  of  her  other  contracts.  The  cases  are  numerous 
in  fixing  her  liability  upon  ordinary  contracts,  and  by  analogy 
are  applicable  to  her  liability  in  mortgage  foreclosures  where 
a  judgment  for  deficiency  is  sought  against  her.* 


48).    But  our  courts  have  adopted  *  Manhattan  B.  &M.  Co,  v.  Thomp- 

more  conservative  principles,  and  it  son,  58  N.  Y.  80,  85  (1874);  Yale  v. 

is  better  to  adhere  to  them  until  the  Dederer,  22  N.  Y.  450  (1860). 

legislature  in  its  wisdom  and  power  *If  the  wife  has  signed  the  mort- 

iMll  see  fit  to  change  them."    To  the  gage  alone  and  not  the  bond,  it  will 

same  effect  is  his  opinion  in  Yale  v.  be  erroneous  to  demand  a  personal 

Dederer,  68  N.  Y.  334  (1877) ;  this  judgment  against  her ;  Gebhart  v. 

case  was  three  times  before  the  Court  Hadley,  19  Ind,  270  (1862);  in  Buell 

of  Appeals ;  18  N.  Y.  265  (1858) ;  22  v.    Shuman,    28    Ind.   464  ( 1867  ), 

N.  Y.  450  (1860);  68  N.  Y.  334  (1877).  she  had  signed  the  note  also,  but 

>  Nourse  v.  Henshaw,   123  Mass.  was  held  not  personally  liable.    In 

96  (1877).  Brick  v.  Scott,  47  Ind.  899  (1874), 


256  MAERIED    woman's    FORMER    LIABILITY.       [§211. 

Church,  Ch.  J.,  who  made  a  careful  study  of  the  liability 
of  the  separate  estate  of  a  married  woman  for  her  contracts, 
concluded  that  such  liability  may  be  enforced, — i.  When 
created  in  or  about  carrying  on  a  separate  trade  or  business  of 
the  wife  ;'  2.  When  the  contract  relates  to,  or  is  made  for  the 
benefit  of,  her  separate  estate  ;*  3.  When  the  intention  to 
charge  her  separate  estate  is  expressed  in  the  instrument  or 
contract  by  which  the  liability  is  created.'  These  three  propo- 
sitions substantially  embody  the  law  as  it  exists  in  most  of  the 
states ;  some  states  follow  the  rule  of  the  English  courts  of 
equity  as  stated  in  the  preceding  section,  and  a  few  have  gone 
as  far  as  New  York  in  the  act  of  1884.  "The  general  princi- 
ples applicable  to  this  subject  have  been  too  firmly  settled  by 
repeated  adjudications,  to  justify  a  reconsideration  of  the 
grounds  upon  which  they  were  arrived  at.  The  most  important 
of  these  principles  is,  that  the  statutes  of  1 848-49  and  1 860-62 
did  not  operate  to  remove  the  general  disability  of  married 
women  to  bind  themselves  by  their  contracts,  not  even  to 
the  extent  of  their  separate  estates.  This  made  it  necessary 
to  define  specifically,  in  what  cases  and  under  what  circum- 
stances such  contracts  could  or  ought  to  be  enforced  against 


the  court  went  so  far  as  to  hold  void  suretyship,     whether    as    indorser, 

a  mortgage  given  on  her  separate  guarantor,  or  in  any  other  manner  ; 

estate,  the  proceeds  of  which  wen*  and  such  contract,  as  to  her,  shall  be 

to    the    husband  ;  apparently  over'  void.     Rev.  Stat.    (1881),  chap.  71, 

ruled,  however,  in  Herron  v.  Herron,  §  5119. 

91  Ind.  278  (1883).  See  also  McCarty  '  Frecking  v.  Holland,  53  N.  Y. 

v.  Tarr,  83  Ind.  444  (1882)  ;  Moffitt  422  (1873) ;  Barton  v.  Beer,  35  Barb. 

V.  Roche,  77  Ind.  48  (1881) ;  Martin  (N.  Y.)  78  (1861). 

v.    Caubie,   72  Ind.    67   (1880).     In  «  Ballin  v.  Dillaye,   37  N.  Y.  35 

Sperry  v.  Dickinson,   82  Ind.   132  (1867) ;  Owen  v.  Cawley,  36  N.  Y. 

(1882),  the  wife  covenanted  in  the  600(1807). 

mortgage  to  pay  a  note,  and  she  was  *  Yale  v.  Dederer,  22  N.  Y.  450 

held    liable.     See    Merchants'    Nat.  (1860);  Yale  v.  Dederer,  18  N.Y.  265 

Bk.  V.  Raymond,  27  Wis.  567  (1871),  (1858) ;    Mack  v.    Austin,    29   Hun 

where  no  question  seems  raised  but  (N.  Y.)  534  (1883).     See  Penn.  Coal 

that  a  feme  covert  is  bound  as  much  Co.  v.  Blake,  85  N.  Y.   226  (1881)  ; 

by  her  contracts  as  a /(Sme  sc>Ze.   Rog-  Layman    v.    Shultz,    60    Ind.     541 

ers  V.  Weil,  12  Wis.  664(1860).    The  (1878) ;  Brick  v.  Scott,   47  Ind.    299 

statute  of  Indiana  is  peculiar  in  that  (1874)  ;  McGlaughlin  v.  O'liourke, 

it  provides  that  a  married  woman  12  Iowa,  459  (1861). 
fchall  not  enter  into  any  contract  of 


§212.J  MARRIED    WOMAN    LIABLE.  257 

their  separate  property,  and  the  difficulty  of  accomplishing 
this  purpose  has  led  to  most  of  the  Htigation  on  the 
subject."* 

§  212.  Personal  liability  of  married  woman  mortgaging 
her  separate  estate. — To  the  above  must  be  added  a  fourth 
proposition  that  a  mortgage  given  by  a  married  woman  on 
her  separate  estate  is  always  valid  against  her  to  the  extent 
of  the  value  of  the  mortgaged  lands,  the  reason  for  this 
being  that  the  mortgage  is  a  specific  charge  upon  a  specific 
part  of  her  separate  estate, — "  an  appropriation  only  of  so 
much  of  her  estate  as  the  mortgage  covers."*  This  proposi- 
tion is  universally  sustained  in  the  English  and  American 
courts,  and  for  its  reason  relates  back  to  the  broad  principle 
that  a  married  woman  can  mortgage  her  real  estate.' 

Payne  v.  Burnham,*  in  which  also  the  opinion  was  written 
by  Church,  Ch.  J.,  is  a  leading  case  upon  the  question  of  a 
married  woman's  liability  for  a  judgment  of  deficiency  in  the 
foreclosure  of  a  bond  and  mortgage  which  she  executed 
jointly  with  her  husband.  The  mortgage  in  that  case  was 
executed  on  her  separate  estate,  but  she  received  no  part  of 
the  loan,  the  entire  amount  going  to  her  husband ;  she  was 
held  not  liable  for  a  judgment  of  deficiency.     If,  however, 


"Manhattan    B.     &    M.    Co.    y.  Hun  (N.  Y.)  154  (1878).    See  Spear  v. 

Thompson,  58  N.  Y.  80,  83  (1874),  Ward,  20  Cal.  660  (1S62) ;  Eaton  v. 

per  Church,  Ch.  J. ;    Corn  E.    Ins.  Nason,  47  Me.    132  (1860) ;    Black 

Co.  7.  Babcock,  42  N.  Y,  613  (1870);  v.   Galway,   24  Pa.   St.   18  (1854) ; 

s.   c.    35  How.    (N.    Y.)   Pr.    216 ;  Voorhies    v.    Granberry,     5    Baxt. 

Ballinv.  Dillaye,  37  N.Y.  35(1867);  ( Tenn. )    704    (1875);     Hollis    v. 

Owen    V.    Cawley,   36   N.   Y.   600  Francois,   5  Tex.   195  (1849).     See 

(1867) ;  Yale  v.  Dederer,  18  N.  Y.  Penn.  act  of  1848. 
282  (1858) ;  s.  c.  22  N.  Y.  460  (1860);  »  See  ante  §  134. 

68  N.  Y.   329  (1877) ;  Vrooman  v.  ■*  62  N.  Y.   69  (1875),  reversing  a 

Turner,    8  Hun  (N.  Y.)  78  (1876) ;  Hun  (N.  Y.)  143  ;  4  T.  &.  C.  (N.  Y.) 

reversed    in    part,   69    N.  Y.    280.  678.     See  Williamson  v.   Duffy,   19 

Contra,  Brown  v.  Herman,  14  Abb.  Hun  (N,  Y.)  312  (1879) ;  McKeon  v. 

<N.  Y.)  Pr.  394  (1863).  Hagan,   18  Hun  (N.  Y.)  65  (1879) ; 

*  Payne  v.  Burnham,  62  N.  Y.  74  Manhattan  Life  Ins.  Co.  v.  Glover, 

(1875)  ;  Corn  E.  Ins.  Co.  v.  Babcock,  14  Hun  (N.  Y.)  153  (1878).    In  Rourk 

42  N.  Y.  613  (1870) ;  Kidd  v.  Con-  v.  Murphy,   12  Abb.  (N.  Y.)  N.  C. 

way,  65  Barb.  (N.  Y.)  158  (1873) ;  402  (1883),  she  bound  her  separate 

MaoXattan  L.  Ins.  Co.  v.  Glover,  14  estate  expressly. 


258  decedents'  estates  liable.  [§213. 

she  had  received  a  part  only  of  the  consideration  for  which 
the  bond  signed  by  her  was  given,  she  would  have  been  held 
liable  for  the  deficiency.*  In  a  case  where  a  married  woman 
received  the  consideration  of  a  mortgage  upon  her  promise 
to  repay  it,  it  was  held  that  it  was  borrowed  for  the  benefit 
of  her  separate  estate.  She  answered  that  she  was  a  married 
woman  not  carrying  on  any  separate  business ;  a  demurrer 
to  the  answer  by  the  complainant  was  sustained.*  The 
complaint  must  state  specifically  the  grounds  on  which  a 
judgment  for  deficiency  is  demanded  against  a  married 
woman  ;  otherwise,  a  personal  judgment  taken  upon  default 
will  be  held  void.* 

A  bond  and  mortgage  executed  by  a  married  woman  to 
secure  part  of  the  purchase  money  for  premises  conveyed 
to  her,  will  render  her  liable  for  a  judgment  of  deficiency  in 
an  action  to  foreclose,  on  the  theory  that  the  transaction 
is  for  the  benefit  of  her  separate  estate.*  In  an  action  to 
foreclose  a  purchase  money  mortgage,  Park,  J.,  said,  "  I  do 
not  understand  how  it  can  be  said  that  a  debt,  contracted 
on  the  purchase  of  property  which  the  purchaser  takes  into 
possession  and  enjoys,  is  not  a  debt  contracted  for  the 
benefit  of  the  purchaser's  estate."  * 

§  213.  Persons  originally  liable,  deceased,  their  estates 
liable — Personal  representatives  proper  parties. — Where 
a  mortgagor  or  other  person  who  was  personally  liable  for  a 
deficiency  on  the  foreclosure  of  a  mortgage  is  dead,  his 
personal  representatives  may  be  made  parties  to  an  action 


•  Jones  V.  Merritt,  23  Hun  (N.  T.)  Shnyder  v.  Noble,  94  Pa.  St.  286 

184  (1880).  (1880) ;  Brunner's  Appeal,  57  Pa.  St. 

»  Williamson  v.  Duffy,  19  Hun  46  (1868). 
(N.  Y.)  312  (1879).  »  Ballin  v.  Dillaye.  87  N.  T.  85 

» Manhattan    Life    Ina.    Co.    v.  (1867) ;  Rogers  v.  Ward,  90  Mass. 

Glover,  14  Hun  (N.  T.)  153  (1878).  (8  Allen),   387  (1864) ;    Basford  v. 

*  Ballin  v.  Dillaye,  37  N.  Y.  35  Pearson,  89  Mass.  (7  Allen),  505 
(1867);  s.  c.  35  How.  (N.  Y.)  Pr.  (1863);  Stewart  v.  Jenkins,  88  Mass. 
216  ;  Flynn  v.  Powers,  35  How.  (N.  (6  Alleu),  300  (1863) ;  Ames  v.  Fos- 
Y.)  Pr.  279  (1868) ;  Vrooman  v.  Tur-  ter,  85  Mass.  (3  Allen),  541  (1862). 
ner,  8  Hun  (N.  Y.)  78  (1876),  re-  But  in  Pemberton  v.  Johnson,  46 
versed  in  part,  69  N.  Y.  280  ;  Chase  Mo.  342  (1870),  she  waa  held  not 
V.  Hubbard,  99  Pa.  St.  226  (1881) ;  personally  liable. 


§  213.] 


DECEDENTS     ESTATES    LIABLE. 


259 


to  foreclose  the  mortgage,  and  a  decree  may  be  rendered 
therein  that  the  deficiency  be  paid  out  of  the  estate  in  their 
hands  in  the  due  course  of  its  administration.' 

This  proposition  was  first  advanced  by  Chancellor  Wal- 
worth in  Leonard  v.  Morris,*  and  has  never  been  seriously 
questioned.  He  held,  "Where  the  person  who  is  thus 
secondarily  liable  for  such  deficiency  is  dead,  I  can  at  present 
see  no  legal  objection  to  making  his  personal  representatives 
parties  to  the  suit  for  the  purpose  of  obtaining  a  decree 
against  them  for  the  payment  of  such  deficiency  out  of  the 
estate  of  the  decedent  in  their  hands,  to  be  paid  in  a  due 
course  of  administration.  *  *  *  No  decree  can  be  made  for 
the  payment  of  the  deficiency  out  of  the  estate  of  the  dece- 
dent, so  as  to  entitle  the  complainant  to  an  execution 
thereof  in  this  court,  until  a  full  account  of  the  administra- 
tion of  the  estate  has  been  taken  ;  except  in  those  cases 
where  the  executors  and  administrators  admit  assets  suffi- 
cient to  pay  the  complainant's  debt,  and  all  other  debts  of  an 
equal  and  of  a  higher  class  which  were  due  by  the  decedent.'* 


>  Fliess  V.  Buckle3^  90  N.  Y.  286 
<1883) ;  Glacius  v.  Fogel,  88  N.  Y. 
439  (1882) ;  Lockwood  v,  Fawcett, 
17  Hun  (N.  Y.)  147  (1879) ;  Scofield 
v.  Dosclier,  10  Hun  (N.  Y.)  583 
^1877) ;  aff'd  72  N.  Y.  491.  For  the 
practice  in  South  Carolina,  see  Gray 
V.  Toomer,  5  Rich.  (S.  C.)  L.  261 
(1852),  In  Drayton  v.  Marshall, 
Jllce's  (S.  C.)  Eq.  373  (1839),  per- 
sonal representatives  were  held 
proper  parties  ;  and  it  was  further 
held  that  the  balance  of  a  mort- 
gage debt  was  entitled  to  priority 
of  payment  out  of  the  general  es- 
tate over  simple  contract  debts.  See 
Edwards  v.  Sanders,  6  S.  C.  316 
(1874).  See  Rodman  v.  Rodman, 
64  Ind.  65  (1878),  supporting  the 
text,  and  holding  that  there  can  be 
no  decree  over  for  a  deficiency  unless 
the  personal  representatives  are 
made  parties.  See  the  earlier  case 
oS  Newkirk  v.  Burson,  21  Ind.  129 


(1863),  to  the  contrary.  In  Prieto 
V.  Duncan,  22  111.  26  (1859),  a  decree 
for  deficiency  was  taken  against  the 
estate  of  a  deceased  mortgagor,  none 
of  his  personal  representatives  hav- 
ing been  made  parties  ;  on  appeal  it 
was  held  error,  and  the  court  fol- 
lowed the  New  York  rule  in  Leonard 
V.  Morris,  9  Paige  Ch.  (N.  Y.)  90 
(1841).  In  Bennett  v.  Spillars,  7 
Tex.  600  (1852),  the  New  York  rule 
was  established  for  Texas,  though  no 
authorities  are  cited  in  the  opinion, 
per  Hemphill,  Ch.  J.  Contra  to  the 
text  is  Pechaud  v.  Rinquet.  21  Cal. 
76  (1862),  and  Fallon  v.  Butler,  21 
Cal.  24  (1862),  holding  that  a  judg- 
ment for  deficiency  -can  not  be 
rendered  against  personal  represen- 
tatives, but  that  the  actual  deficiency 
can  be  presented  to  them  for  pay- 
ment in  the  due  course  of  adminis- 
tration. 
»  9  Paige  Ch.  (N.  Y.)  90,  92  (1841). 


260  EXECUTORS    DEFENDANTS DEFICIENCY.       [§214. 

§  214.  Personal  representatives  proper  defendants 
under  recent  decision  in  New  York. —  Judge  Miller  of 
the  New  York  Court  of  Appeals  cited  this  case  with 
approval  in  1882,  saying,  "If  the  mortgaged  premises  were 
inadequate  and  the  security  thus  failed,  the  debt  was  still 
existing  for  what  was  unpaid,  and  the  remedy  was  perfect 
against  the  mortgagor  under  the  statute,  which  was  evidently 
designed  for  the  purpose  of  avoiding  the  necessity  of  two 
separate  actions.  If  the  mortgagor  was  alive,  the  judgment 
would  have  been  against  him  personally,  and  upon  his 
decease  his  estate  would  have  been  liable  to  pay  the  same, 
and  his  executors  or  administrators  could  have  been  com- 
pelled to  apply  funds  in  their  hands  in  liquidation  of  the 
judgment.  That  the  action  was  brought  after  the  mort- 
gagor's death,  and  against  the  executors,  can  make  no 
difference,  and  does  not  relieve  them  from  the  liability 
which  the  testator  had  incurred,  and  which  they  would  be 
obliged  to  meet,  had  the  judgment  preceded  his  death.  The 
foreclosure  of  the  mortgage  was  in  fact  against  the  execu- 
tors, who  were  standing  in  the  place  of  the  mortgagor,  and 
the  judgment  was  against  his  representatives,  who  were 
liable  to  satisfy  the  same  out  of  any  assets  of  the  mortgagor 
in  their  hands.  It  is  very  clear  upon  principle  that  the 
representatives  are  liable  to  pay  the  debt  of  a  deceased  party 
in  any  event.  But  if  any  doubt  can  properly  arise,  it  is 
settled  by  the  statute  which  authorizes  actions  to  be  main- 
tained by  and  against  executors  in  all  cases  in  which  the 
same  might  have  been  maintained  by  or  against  their 
respective  testators.  The  case  of  Leonard  v.  Morris  holds 
distinctly  that  when  the  mortgagor  or  other  party  person- 
ally liable  for  the  deficiency  in  a  foreclosure  case  is  dead,  his 
personal  representatives  may  be  parties  to  the  suit,  to  enable 
the  complainant  to  obtain  a  decree  that  the  deficiency  be 
paid  out  of  the  estate  in  their  hands  in  a  due  course  of 
administration.  The  rule  stated  is  well  settled,  and  if  any 
different  one  was  adopted,  the  execution  of  a  bond  would 
be  an  idle  ceremony  in  case  of  the  maker's  death."* 


•  Glacius  V.  Fogel,  88  N.  Y.  439  (1882). 


§  214.]       EXECUTORS   DEFENDANTS DEFICIENCy.  261 


In  an  action  to  foreclose,  where  judgment  was  demanded 
against  the  survivor  of  two  obligors,  and  further  that  on 
the  return  of  an  execution  against  him  unsatisfied  the 
balance  be  adjudged  to  be  a  debt  against  the  estate  of 
the  deceased  obligor,  to  be  paid  by  his  administrator  in  the 
due  course  of  administration,  the  court  held  that  a  decree 
could  not  be  made  against  the  estate  of  the  decedent  in  the 
same  action.*     But  it  is  doubtful  whether  this  is  good  law 


'  Vice-Chancellor  Whittlesey,  in 
writing  the  opinion  in  Rhoades  v. 
Evans,  Clarke  Ch.  (N.  Y.)  170 
(1840),  says:  "These  provisions 
would  authorize  a  personal  decree 
against  Evans,  and  against  Rochester 
if  he  was  living,  for  any  such  bal- 
ance: but  will  it  authorize  such 
decree  against  Rochester's  adminis- 
trator, he  being  dead  ?  Such  decree 
is  authorized  only  when  such  bal- 
ance is  recoverable  at  law.  This  bill 
is  filed  against  Evans  and  the  admin- 
istrator, widow  and  heirs  of  Roches- 
ter. For  the  purpose  of  obtaining 
a  sale  of  the  land,  all  these  are 
rightly  made  parties  ;  but  can  they 
be  joined  for  the  purpose  of  a  per- 
sonal decree  against  them  jointly  ? 
This  question  is  answered  by  an 
answer  to  the  question  whether  they 
could  be  jointly  sued  upon  the  bond 
at  law.  The  decisions  and  well 
settled  principles  of  our  coiu"ts  clearly 
and  decidedly  answer  this  question 
in  the  negative.  Evans  and  the 
administrator  of  Rochester  could 
not  be  joined  as  defendants  in  a  suit 
at  law  upon  the  bond.  Evans  must 
be  sued  as  survivor.  Then,  this  is 
not  a  debt  which  is  recoverable  at 
law,  in  the  mode  which  the  com- 
plainant has  sought  to  recover  it  in 
thiscoxurt;  and,  consequently,  there 
can  be  no  decree  against  the  admin- 
istrator of  Rochester  in  this  court. 


But  the  complainant  asks  this  court 
to  determine  the  amount  due  from 
Rochester's  estate  upon  this  demand, 
after  the  premises  are  sold,  and  after 
an  execution  has  been  returned 
unsatisfied  against  Evans.  It  seems 
to  me  that  this  is  a  matter  which 
does  not  belong  to  the  jurisdiction  of 
this  court,  at  least  in  the  present 
shape  of  the  cause.  The  surrogate 
has  jurisdiction  to  marshal  Roches- 
ter's assets,  and  direct  how  they 
shall  be  paid.  Other  creditors  have 
an  interest  in  the  amount  of  this 
debt,  and  in  settling  this  amount, 
and  they  are  not  before  the  court  to 
contest  this  claim ;  and  I  doubt 
whether  a  decision  of  this  court 
would  be  binding  upon  them  in  any 
manner  whatever.  If  they  had 
notice  of  this  proceeding,  they  might 
possibly  contest  this  claim,  or  they 
might  see  that  the  mortgaged  prem- 
ises produced  enough  to  pay  the 
mortgage  debt,  so  as  to  relieve  the  per- 
sonal fund  ;  but  they  are  not  here, 
and  I  can  not  make  a  decree  which 
shall  bind  them  in  any  manner.' 
This  case  is  cited  in  no  decision,  and 
it  is  plainly  overruled  in  substance 
by  Glacius  v.  Fogel,  88  N.  Y.  439 
(1882) ;  Lockwood  v.  Fawcett,  17 
Hun  (N.  Y.)  147  (1879) ;  Leonard  v. 
Morris,  9  Paige  Ch.  (N.  Y.)  90,  92 
(1841). 


262  HEIIIS    NOT    PROPEii    PAKT1E8.     [§§215-216. 

under  the  more  recent  decisions.'  If  the  plaintiff  fails  to  make 
the  representatives  of  a  deceased  person,  who  was  liable  for  the 
mortgage  debt,  parties  to  the  action  or  does  not  demand  a 
judgment  of  deficiency  against  them,  he  can  present  his 
claim  for  an  unpaid  balance  to  the  personal  representatives, 
and  if  payment  is  refused,  an  action  can  be  maintained 
against  them  to  recover  the  deficiency, — only,  however,  by 
leave  of  the  court  in  which  the  mortgage  was  foreclosed.* 

§  215.  Persons  originally  liable,  deceased,  their  heirs 
and  dfevisees  not  proper  parties. — As  has  been  seen  from 
the  decisions  cited  in  the  preceding  section,  the  personal 
representatives  of  a  deceased  obligor  are  proper  parties  to  an 
action  to  foreclose  a  mortgage,  for  the  purpose  of  determin- 
ing the  amount  of  any  deficiency  that  may  arise,  and  of 
establishing  a  claim  to  be  presented  and  paid  in  the  due 
course  of  the  adn\inistration  of  the  estate  of  the  decedent. 
Another  line  of  decisions  holds  distinctly  that  the  heirs 
of  a  deceased  person,  who  was  liable  for  the  mortgage 
debt,  are  not  proper  parties  to  an  action  to  foreclose  a 
mortgage,  where  a  judgment  for  deficiency  is  sought 
against  his  estate.*  If  the  decedent  owned  the  equity 
of  redemption  and  was  at  the  time  liable  for  the  payment  of 
the  mortgage  debt,  his  heirs  and  devisees  are,  of  course, 
necessary  parties  for  cutting  off  the  equity  of  redemption 
which  descended  to  them  ;  but  a  judgment  for  deficiency 
can,  in  no  event,  be  demanded  against  them  in  the  same 
action.* 

§216.  Remedies  against  heirs  and  devisees.  —  The 
remedy  against  the  heirs  and  devisees  must  be  exhausted  in 


'  See  the  cases,  supra.     In  Trim-  tors  of  the  deceased  obligor.     See 

mier  v.  Thomson,   10  Piich.  (S.  C.)  Daniels  v.  Moses,  12  S.  C.  130(1879). 

N.  S.  164,  178  (1877),  an  exhaustive  ^  Glacius  v.  Fogel.  88  N.  Y.  440 

opinion  was  written  by  Haskells,  A.  (1882) ;  ScoSeld  v.  Doscher,  72  N.  Y. 

J.,  who  held,  in  an  action  upon  a  491   (1878).      See  ante  §§195,    196, 

joint  and  several  bond,  where  one  of  and  the  notes. 

the  obligors  had  died  and  the  verdict  '  See  Alexander  v.  Frary,  9  Ind. 

was  generally  for  money,  that  sep-  481  (1857). 

arate  judgments  could  be  rendered  *  Cundiff  v.  Brokaw,  7  111.  App. 

ayainst  the  survivor  and  the  execu-  147(1881).     See  a7i<e  g§  141-144. 


§  216.]  REPRKSENTATIVES  OF  DECEDENT.  263 

a  subsequent  action  to  charge  lands  which  have  descended 
to  thern  with  the  payment  of  the  decedent's  debts.' 

In  the  case  of  Leonard  v.  Morris,*  quoted  in  the  preceding 
section,  this  proposition  was  pointedly  presented  to  Chan- 
cellor Walworth,  who  said;  "Admitting  that  it  may  l)e 
proper  to  make  the  personal  representatives  of  a  deceased 
mortgagor  or  guarantor  parties  to  a  bill  of  foreclosure,  where 
it  is  probable  there  may  be  a  deficiency,  there  is  no  case  in 
which  it  is  allowable  to  make  heirs  or  devisees  who  have  no 
interest  in  the  mortgaged  premises  parties  to  a  bill  of  fore- 
closure, with  a  view  to  reach  the  estate  descended  or'devised 
to  them,  to  satisfy  an  anticipated  deficiency  upon  the  sale  of 
the  mortgaged  premises.  To  authorize  the  filing  of  a  bill 
against  heirs  or  devisees,  to  obtain  satisfaction  of  a  debt 
which  is  not  a  specific  lien  upon  the  estate  descended  or 
devised  to  them,  the  complainant  must  show  by  his  bill  that 
the  personal  estate  of  the  decedent  was  not  sufficient  to 
pay  the  debt,  or  that  the  complainant  has  actually  exhausted 
his  remedy  against  the  personal  estate  and  the  personal  repre- 
sentatives and  next  of  kin,  etc.  And  it  is  impossible  to  do 
this  as  to  the  deficiency  in  a  mortgage  case  where,  at  the 
time  of  filing  the  bill  to  foreclose  the  mortgage,  it  can  not 
be  known  that  there  will  be  any  deficiency  whatever. 

In  proceedings  against  heirs  or  devisees,  the  statute  also 
requires  the  complainant  to  state  in  his  bill,  with  convenient 
certainty,  the  real  estate  descended  or  devised.  Again,  the 
Revised  Statutes  Jiave  prohibited  the  bringing  of  any  suit 
against  heirs  or  devisees  of  any  real  estate,  in  order  to 
charge  them  with  a  debt  of  a  testator  or  intestate,  within 
three  years  from  the  time  of  granting  letters  testamentary 
or  of  administration  upon  his  estate.  -^  *  *  The  guardian 
ad  litem  of  the  infant  defendant,  therefore,  instead  of  putting 
in  a  general  answer,  and  consenting  to  a  decree  against  such 
infant,  should  have  raised  objection,  either  in  his  answer  or 
by  demurrer,  that  the  bill  was  improperly  filed  against  the 
heirs  and  devisees.     The  bill  must  be  dismissed  as  to  the  heirs 


1  Sutherland  V.  Rose,  47  Barb.(N.      v.  Hi n man,    15  How.   (K  Y.)  Pr. 
Y.)  144  (1866);  Merchants'  Ins.  Co.      183  (1857). 

2  9  Paige  Ch.  (N.  Y.)  92  (1841). 


264  EEPEESENTATIVES    OF   DECEDENT.  [§217. 

and  devisees  of  the  obligor,  but  without  prejudice  to  the 
complainant's  rights  to  proceed  against  them  by  a  new  suit 
to  charge  them  with  the  payment  of  any  deficiency  which 
may  exist  after  the  sale  of  the  mortgaged  premises,  and 
which  can  not  be  collected  from  the  estate  of  the  mortgagor, 
nor  from  the  personal  estate  of  the  obligor,  after  due  pro- 
ceedings had  before  the  surrogate,"* 

§  217.    Person  originally  liable,  making  an  assignment 
in    bankruptcy  or  voluntarily,   assignee    proper. — It   is 

advanced  here  as  an  original  proposition  that  an  assignee  in 
bankruptcy,  or  by  general  assignment,  of  a  person  who  was, 
at  the  time  of  the  assignment,  liable  for  the  mortgage  debt, 
is  a  proper  party  to  an  action  to  foreclose  a  mortgage,  and 
one  against  whom  a  judgment  for  deficiency  can  be  demanded 
and  decreed,  to  be  paid  in  the  due  course  of  his  administration 
upon  the  estate  of  the  bankrupt.  This  proposition  has  been 
presented  to  no  court,  as  far  as  can  be  ascertained,  but  it  is 
believed  that  it  would  be  sustained,  as  the  cases  cited  in  the 
four  preceding  sections  strongly  support  it  by  analogy.  An 
assignee  is  only  a  representative  of  the  bankrupt,  and  a 
creature  of  the  law,  the  same  as  a  personal  representative  is 
of  a  decedent.  The  distinction  should  be  made,  however, 
that  the  demand  against  an  assignee  must  be  made  before 
the  final  settlement  of  his  accounts  and  his  discharge,  for 
after  his  trust  is  performed  his  relations  to  and  his  duties 
with  the  property  of  the  bankrupt  are  completely  ended. 


»  Leonard  v.  Morris,  9  Paige  Ch.  Dykman,  J.,  said:  "  The  plaintiffs 

(N.  Y.)  90,  92  (1841);  Fliess  V.  Buck-  must  first  resort  to  the  decedent's 

ley,  22  Hun  (N.  Y.)  551  (1880).     In  personal  estate  ;    that  failing,    they 

Fliess  V.  Buckley,  24  Hun  (N.  Y.)  have  their  remedy  against  the  heirs 

515  (1881),  aff'd  90  N.  Y.  286  (1882),  and  devisees." 


CHAPTER  XI. 

PARTIES  DEFENDANT— LIABLE  FOR  THE  MORTGAGE  DEBT. 


PARTIES  SUBSEQUENTLY  LIABLE. 


^218. 
219. 


220. 


221. 
222. 


223. 

224. 
225. 

326. 
237. 

828. 


Introductory. 

Purchaser  of  mortgaged 
premises  subject  to  the 
mortgage  not  liable. 

Rule  in  New  Jersey  fixing 
liability  of  purchaser  sub- 
ject to  mortgage. 

Rule  in  New  York. 

Purchaser  of  mortgaged 
premises,  assuming  payment 
of  the  mortgage,  liable — 
General  principks. 

Purchaser  becomes  principal 
debtor  and  mortgagor  only 
a  surety. 

What  words  and  acts  of  as- 
sumption held  binding. 

Usury  or  defective  title  no 
defence  to  contract  of  as- 
sumption. 

Theories  of  law  upon  v/liich 
a  mortgagee  is  allowed  the 
benefit  of  the  contract  of 
assumption. 

Purchaser  not  personally  lia- 
ble when  his  grantor  is  not 
personally  liable,  though  he 
assumes  payment  of  the 
mortgage. 

Assumption  of  mortgage  by 
subsequent  mortgagee  does 
not  make  him  personally 
liable  to  prior  mortgagee. 


§  229.  New  York  cases  reviewed. 

230.  Grantor  can  not  release  his 

grantee,  assuming  a  mort- 
gage, from  his  liability  to 
the  mortgagee  in  New  York. 

231.  Contrary  ruling  in  New  Jer- 

sey. 

232.  Intermediate  purchaser,  hav- 

ing assumed  payment  of 
the  mortgage,  liable. 

233.  Assignor  of  a  mortgage  guar- 

anteeing payment  or  collec- 
tion liable. 

234.  Intermediate  assignors  of  a 

mortgage  guaranteeing  pay- 
ment liable. 

235.  Assignors    of    a    mortgage, 

covenanting  as  to  title  and 
against  defences,  liable. 

236.  All  persons  guaranteeing  pay- 

ment or  collection  of  a  bond 
and  mortgage  by  a  separate 
instrument  liable. 

287.  Married  women  obligating 
themselves  in  any  of  the 
preceding  ways  generally 
liable. 

238.  Persons  subsequently  liable 
in  any  of  preceding  ways, 
deceased,  their  estates  liable 
— Personal  representatives 
proper  parties ;  heirs  and 
devisees  not  proper  parties. 


§  2i8.  Introductory. — Subsequent  to  the  execution  of  a 
bond  and  mortgage,  and  consequent  upon  the  establishment 
of  the  relation  of  mortgagor  and  mortgagee,  with  their 
respective  benefits  and  liabilities,  the  title  of  the  mortgagor 
to  his  lands,  and  of  the  mortgagee  to  his  bond  and  mortgage, 
may  be  so  transferred  as  to  change  their  respective  relations  ^ 
and  to  bring  persons  who  where  strangers  to  the  execution 


265 


266  INTRODUCTORY.  [§219. 

of  the  mortgage  into  such  a  relation  to  it,  or  to  the  equity  of 
redemption,  as  to  make  them  Hable  for  the  mortgage  debt. 

In  this  chapter  consideration  will  be  given  to  such  parties 
as  were  strangers  to  the  original  transaction  between  the 
mortgagee  and  the  mortgagor,  but  who  have  subsequently 
become  Hable  for  the  payment  of  the  indebtedness  secured. 
The  subject-matter  of  this  chapter  has  been  of  constantly 
increasing  importance  in  the  law,  owing  to  the  increased 
number  of  conveyances  in  the  Eastern  States,  and  to  the 
facility  with  which  mortgages  and  real  estate  titles  are  now 
transferred.  The  whole  general  subject  is  intimately  con- 
nected with  the  law  of  principal  and  surety  ;  but  it  is  without 
the  province  of  this  work  to  give  any  attention  to  that  branch 
of  the  law,  except  indirectly,  and  reference  must  be  had  to 
special  treatises  on  that  subject. 

There  are  two  principal  ways  in  which  this  subsequent 
liability  for  a  mortgage  debt  may  be  created.  The  mort- 
gagor may  create  it,  by  conveying  his  equity  of  redemption 
in  the  mortgaged  premises,  and  binding  his  grantee  to  assume 
the  payment  of  the  mortgage ;  or  the  mortgagee  may  create 
it  in  an  assignment,  by  guaranteeing  the  payment  or  collec- 
tion of  the  mortgage,  or  by  making  other  covenants  in 
respect  to  it.  Questions  affecting  the  contract  of  assumption 
of  the  payment  of  a  mortgage  have  grown  into  such  impor- 
tance from  their  frequency  and  variety,  that  they  might  well 
be  made  the  subject  of  a  legal  monograph ;  but  for  the 
purposes  of  this  work,  only  the  general  and  well  established 
principles  of  law  affecting  the  subject  need  be  stated.  The 
decisions  in  New  York,  however,  are  fully  given  in  the 
following  pages. 

§  219.  Purchaser  of  mortgaged  premises  subject  to 
the  mortgage  not  liable. — It  is  now  well  settled  in  all 
courts,  where  a  mortgagor  conveys  his  equity  of  redemption 
to  a  purchaser,  without  mentioning  the  mortgage  in  the 
instrument  of  conveyance,  or  by  stating  therein  that  the  deed 
is   made  subject  to  the  mortgage,'  or  by  merely  reciting 


•  Stebbins  v.  Hall,  29  Barb.  (N.      ing  the  cases ;    Binsse  v.  Paige.   1 
Y.)  534  (1859),  collating  and  review-      Keyes  (N.  Y.)  87  (1863) ;  Collins  v. 


^  219.J 


PUECHASEE    SUBJECT   TO    MOETGAGE. 


267 


the  mortgage,  that  the  grantee  is  not  thereby  made  liable  for 
the  mortgage  debt ;  and  a  judgment  for  deficiency  can  not  be 
demanded  against  him  in  an  action  to  foreclose  the  mort- 
gage.' A  grantee  who  takes  "  subject "  to  a  mortgage 
simply  contracts  that  the  debt  shall  be  paid  out  of  the 
mortgaged  land.'  The  phrase  "  under  and  subject"  is  bind- 
ing between  the  parties  as  a  covenant  of  indemnity,  but 
it  gives  the  mortgagee  no  rights  against  the  purchaser. 

A  purchaser  at  a  judicial  sale,  which  is  made  subject  to  a 
mortgage,*  does  not  become  personally  obligated  for  the 
mortgage  debt.*  There  is  no  implied  promise  or  covenant 
of  a  personal  obligation  ;  the  premises  are  the  primary  fund 
for  the  payment  of  the  debt  ;  but  beyond  their  value,  the 
purchaser  is  in  no  way  liable.  Even  where  a  deed  recited 
that  the  mortgage  had  been  estimated  as  a  part  of  the  con- 
sideration money,  and  had  been  deducted  therefrom,  it  has 
been  decided  that  the  grantee  assumed  no  personal  liability 
for  its  payment.*  Wherethelanguage  was,  "subject  *  *  *  to 


Rowe,  1  Abb.  (K  Y.)  N.  C.  97 
(1876),  and  the  note  to  the  case,  in 
which  are  collated  and  analyzed  the 
cases  interpreting  and  fixing  the 
meaning  of  the  language  employed 
in  various  deeds  to  express  and  to 
refer  to  the  existence  of  a  mortgage 
on  the  premises.  See  Wadsworth 
V.  Lyon,  93  N.  Y.  201  (1883) ;  Car- 
ter V.  Holahan,  93  N.  Y.  498  (1883); 
Post  V.  Tradesmen's  Bank,  28  Conn. 
430, 432  (1859) ;  Rapp  v.  Stoner,  104 
111.  618  (1882) ;  Lewis  v.  Day,  53 
Iowa,  575, 579  (1880).  collating  and  re- 
viewing the  cases  ;  Canfield  v.  Shear, 
49  Mich.  313  (1882) ;  Strohauer  v. 
Voltz,  42  Mich.  444  (1880) ;  Slater  v. 
Breese,  36  Mich.  77  (1877) ;  Wood- 
bury V.  Swan,  58  N.  H.  380  (1878) ; 
Merriman  v.  Moore,  90  Pa.  St.  78 
(1879) ;  Samuel  v.  Peyton,  88  Pa.  St. 
465  ;  Moore's  Appeal,  88  Pa.  St.  450 
(1879) ;  Girard  Trust  Co.  v.  Stewart, 
86  Pa.  St.  89  (1878) ;  Ins.  Co.  v. 
Addicks,     12     Phila.     (Pa.)     490; 


Moore's  Estate,  12  Phila.  (Pa.)  104 
(1882) ;  Weber  v.  Zeiment,  30  Wis. 
283  (1872)  ;  Tanguay  v.  Felthousen, 
45  Wis.  30  (1878) ;  Cleveland  v. 
Southard,  25  Wis.  479  (1870). 

>  Belmont  v.  Coman,  23  N.  Y.  438 
(1860),  a  leading  case  ;  Hull  v.  Alex- 
ander, 26  Iowa,  569,  573  (1869); 
Carleton  v.  Byington,  24  Iowa,  173 
(1867) ;  McLenahan  v.  McLeuahan, 
18  K  J.  Eq.  (3  C.  E.  Gr.)  101  (1866), 
collating  the  English  authorities. 

*  Ludiugton  v.  Harris,  21  Wis. 
239  (1866). 

« Taylor  v.  Mayer,  93  Pa.  St.  42 
(1880). 

*  Lenrng's  Estate,  52  Pa.  St,  135 
(1866) ;  Wager  v.  Chew,  15  Pa.  St. 
323  (1850)  ;  Price  v.  Cole,  35  Tex. 
461  (1871).  In  Porter  v.  Parmley, 
52  N.  Y.  185  (1873),  no  mention  was 
made  of  a  mortgage. 

^  Belmont  v.  Coman,  22  N.  Y. 
438  (1860).  See  Dingeldeiu  v.  Third 
Ave.  R.  R.  Co.,  37  N.  Y.  575(1868), 


268  LIABILITY    m    HKW    JEKSEY.  [§  220. 

a  mortgage  *  *  *  which  forms  the  consideration  money  of 
this  deed,"  the  grantee  was  held  not  liable.' 

§  220.  Rule  in  New  Jersey  fixing  liability  of  purchaser 
subject  to  mortgage. — In  New  Jersey  the  rule  is  quite 
dif^ferent,  and  the  courts  have  held  that  equity  raises  upon 
the  conscience  of  the  purchaser  an  obligation  to  indemnify 
the  mortgagor  against  the  mortgage  debt."  Vice-Chancellor 
VanFleet'  very  clearly  distinguishes  the  rules  in  New  York 
and  in  New  Jersey  in  reviewing  Belmont  v.  Coman.*  "It  was 
there  held,"  he  says,  "that  where  lands  are  conveyed  subject 
to  a  mortgage,  and  the  amount  of  the  mortgage  is  deducted 
from  the  purchase  money  agreed  upon,  no  personal  liability 
is  thereby  created  against  the  purchaser,  but  that  the  true 
exposition  of  the  intent  of  the  parties  under  such  an  arrange- 
ment is,  that  so  much  of  the  purchase  money  as  is  represented 
by  the  mortgage  is  not  to  be  paid  by  the  purchaser  to  any- 
body, but  shall  be  paid  out  of  the  land,  and  in  that  manner 
only.  Such  interpretation  would  undoubtedly  carry  into 
effect  the  intention  of  the  parties  where  the  interest  sold  is 
merely  the  equity  of  redemption,  and  the  purchase  money 
agreed  upon  represents  simply  the  value  of  the  mortgagor's 
interest  in  the  mortgaged  premises  over  the  mortgage  debt  r 
but  where  the  purchase  money  agreed  upon  represents  the 
whole  value  of  the  premises  free  from  the  mortgage,  and  one 
of  the  mortgagor's  objects  in  selling  is  to  relieve  himself 
from  the  mortgage  debt,  the  vendor  would  seem,  according 
to  the  plain  meaning  of  the  arrangement,  to  have  a  clear 
right  to  the  whole  sum  agreed  to  be  paid,  or,  if  part  is  kept 
back  to  pay  the  mortgage,  that  the  purchaser  shall  be 
required  either  so  to  apply  it,  or  to  indemnify  the  mortgagor 
against  the  mortgage  debt ;  such  I   understand  to  be  the 


distinguishing  Belmont  v.  Coman,  ^  Tichenor  v.  Dodd,  2  N.  J.  Eq. 

$upra.  Inpoint,  Fiskev.Tolman,  124  (3   H.    W.    Gr.)    454,    455  (1844); 

Mass.  254  (1878),  where  tbe  language  Twichell  v.  Mears,  8  Biss.  C.  C.  211 

■was,  "subject  to  a  mortgage  *  *  *  (1878). 

which  is  part  of  the  above-named         '  Held  v.  Vreeland,  30  N.  J.  Eq, 

consideration."  (3  Stew.)  591,  593  (1879) ;  Belmont 

1  Trotter  v.  Hughes,  12  N.  Y.  74,  v.  Coman,  22  N.  Y.  488  (I860). 
78  (1854).  *  22  N.  Y.  438  (1860). 


§§  22 1-2 2 2. J        LIABILITY    LN    NEW    YORK.  2GD 

principle  established  by  the  adjudications  of  this  state,  and 
in  my  view  there  can  be  no  doubt  it  is  founded  on  justice 
and  reason." 

§  221.  Rule  in  New  York. — In  the  recent  case  of  Smith 
V.  Truslow/  the  court  cited  Belmont  v.  Coman*  with 
approval,  but  seemed  to  limit  it  by  saying,  "  It  would  be 
otherwise,  and  the  contention  of  the  appellant  should  prevail 
if,  as  he  assumes,  the  mortgage  debt  formed  part  of  the 
consideration  of  the  purchase  and  was  to  be  paid  by 
the  purchasers,  or  if  he  retained  its  amount."  This  would 
seem  to  indicate  that  the  New  York  courts  incline  toward 
the  New  Jersey  rule  as  more  equitable  and  just.  Much 
depends  in  each  case  upon  the  real  intention  of  the  parties. 
If  it  could  be  shown  that  it  was  the  intention  of  the  grantee 
to  assume  payment,  then  such  language  as  has  been  given 
above  would  be  construed  to  bind  him  personally.'  Again, 
although  a  deed  may  expressly  bind  a  purchaser  with  the 
assumption  and  payment  of  prior  mortgages,  he  would  not 
be  holden  if  it  could  be  shown  that  such  contract  of  assump- 
tion was  inserted  without  his  knowledge,  and  that  he  had  no 
intention  of  binding  himself  personally.* 

§  222.  Purchaser  ofmortgaged  premises,  assuming  pay- 
ment of  the  mortgage,  liable — General  principles.— If  the 
purchaser  of  an  equity  of  redemption  assumes  the  payment  of 
an  existing  mortgage  on  the  premises,  he  thereby  becomes 
personally  liable  for  its  payment,  and  may  be  made  a  defen- 
dant for  the  purpose  of  obtaining  a  judgment  for  deficiency 
against  him.*     If  a  purchaser  assumes  only  a  portion  of  the 


'  84  N.  T.   660,   661  (1881),  per  »  Calvo  v.  Davies,  73  N.  Y.  213 

Danforth,   J.     But  see  Bennett  v.  (1878) ;  Trotter  v.  Hughes,  12  N.  Y. 

Bates,    94    N.    Y.    354  (1884),  per  74  (1854)  ;  Russell  v.  Pistor,  7  N.  Y. 

Ruger,  Ch.  J.,  in  point.  171,  174(1852)  ;  Mutual  Life  Ins.  Co. 

»  22  N.  Y.  438  (1860).  v.  Davies,  44  N.  Y.  Supr.  Ct.  (12  J.  & 

»  Andrews  v,  Wolcott,  16  Barb.  S.)  172  (1878),  and  the  cases  cited  ; 

(N.  Y.)  21  (1852).  Wales     v.     Sherwood,     52     How, 

*  Smith  V.  Truslow,  84  N.  Y.  660  (N.  Y.)   Pr.   413  (1876)  ;   Drury  v. 

(1881) ;  Kilmer  v.  Smith,  77  N.  Y.  Clark.    16  How.    (N.    Y.)  Pr.  424 

226  (1879).     See  the  following  sec-  (1857) ;   Mills  v.  Watson,   1  Sween. 

tions  and  notes.  (N.   Y.)  374  (1869).     See  Bache  v. 


270 


GRANTEE   ASSUMING    PAYMENT. 


[§  222. 


mortgage  debt,  he  will  be  obligated  for  the  payment  of  no 
more  than  he  assumes.'  And  where  the  conveyance  is  to 
two  or  more  tenants  in  common,  they  will  be  held  jointly 
and  not  severally  liable,  though  their  interests  in  the 
property  may  not  be  proportionally  the  same.'  If  the  grantee 
purchases  only  a  portion  of  the  premises  and  assumes  the* 
entire  mortgage,  he  will  be  liable  for  the  whole  debt.* 

After  the  contract  of  assumption  is  made,  the  grantor 
becomes  a  mere  surety  for  the  debt.  It  is  queried  whether 
he  can  require  the  mortgagee  to  foreclose  when  the  mortgage 
becomes  due,  and  whether  he  has  any  remedy  by  which  he 


Doscher,  67  N.  Y.  429  (1876) ;  Kapp 
V.  Stoner,  104  111.  618(1882);  Rogers 
V.  Herron,  92  111.  583  (1879);  Scarry  v. 
Eldridge.  63  Ind.  44  (1878) ;  Price 
V.  Pollock,  47  Ind.  862  (1874) ;  Ross 
V.  Kennison,  38  Iowa,  396  (1874) ; 
Thompson  v.  Bertram,  14  Iowa,  476 
(1863),  citing  Burr  v.  Beers,  24  N. 
Y.  178  (1861),  and  relying  upon 
Moses  V.  The  Clerk,  12  Iowa,  140 
(1861),  and  Corbett  v.  Waterman, 
11  Iowa,  87  (1860) ;  Schmucker  v. 
Sibert,  18  Kan.  104  (1877) ;  Unger 
V  Smith,  44  Mich.  22  (1880) ;  Booth 
v.Conn.  Mut.  Life  Ins.  Co.,  43 Mich. 
299  (1880) ;  Miller  v.  Thompson,  34 
Mich.  10  (1876) ;  Follansbee  v.  John- 
son, 28  Minn.  311  (1881) ;  Vreeland 
V.  VanBlarcom,  35  N.  J.  Eq.  (8 
Stew.)  500  (1882);  Brewer  v.  Maurer, 
38  Ohio  St.  543  (1883),  an  important 
case  ;  Bishop  v.  Douglass,  25  Wis. 
696  (1870).  In  the  early  cases  of 
Missouri  a  purchaser  assuming  pay- 
ment was  held  not  liable  under  the 
statute;  Codeof  1855,  chap.  113,  §11; 
Fithian  v.  Monks,  43  Mo.  502,  515 
(1869) ;  but  under  a  later  statute  a 
purchaser  has  been  held  liable ; 
Heim  v.  Vogel,  69  Mo.  529  (1879). 
The  liability  must,  however,  be 
enforced  in  an  action  apart  from  the 
foreclosure ;  Fitzgerald  v.  Barker, 
70  Mo.  685  (1879).   In  Hand  v.  Ken- 


nedy,  83  N.  Y.  149  (1880),  W.  pur- 
chased certain  premises  in  his  own 
name,  but  in  fact  for  himself,  K. 
and  H.  jointly,  giving  a  purchase 
money  mortgage  signed  by  himself 
alone  as  part  payment ;  subsequently 
W.  conveyed  to  K.  and  H.  undivided 
interests  in  the  property,  they  as- 
suming to  pay  specified  proportional 
parts  of  the  mortgage  ;  in  an  action 
to  recover  a  judgment  for  deficiency. 
Earl,  J.,  held  K.  and  H.  liable  to 
the  mortgagee,  and  that  there  was  a 
sufficient  consideration  to  sustain 
their  contract  of  assumption.  See 
Williams  v.  Gillies,  28  Hun  (N.  Y.) 
175  (1882),  where  the  agreement  to 
assume  a  part  was  oral,  and  the 
court  excluded  evidence  of  the  oral 
agreement. 

'  Bowne  v.  Lynda,  91  N.  Y.  92 
(1883);  Harlem  Savings  Bank  v. 
Mickelsburgh,  57  How.  (N.  Y.)  Pr. 
106  (1878) ;  Logan  v.  Smith,  70  Ind. 
597  (1880) ;  Snyder  v.  Robinson,  35 
Ind.  311  (1871) ;  Logan  v.  Smith,  62 
Mo.  455  (1876). 

« Fenton  v.  Lord,  138  Mass.  466 
(1880). 

»  Wilcox  V.  Campbell,  106  N.  Y. 
325  (1887).  See  Higham  v.  Harris, 
108  Ind.  246 ;  s.  c.  5  West.  Rep.  643 
(1886). 


§  222.]  GEANTEE    ASSUJVHNG    PAYMENT.  271 

can  protect  himself  except  that  of  paying  his  bond  and 
mortgage,  and  becoming  thereby  subrogated  to  the  rights 
of  the  mortgagee.'  The  bargain  to  assume  payment  being 
made  between  the  mortgagor  and  his  grantee,  the  mortgagee 
is  a  stranger  to  it;  he  is  at  first  in  privity  with  neither  of  the 
parties  to  the  contract ;  yet  he  was,  at  an  early  day,  held  to 
be  entitled  to  seize  its  benefits  and  to  compel  the  grantee 
to  perform  his  covenant.  The  debt  becomes  the  grantee's 
own  debt,  and  constitutes  a  portion  of  the  consideration  for 
the  conveyance ;  and  the  right  to  enforce  the  obligation  is 
not  changed  by  the  fact  that  payment  is  to  be  made  to  the 
mortgagee,  instead  of  to  the  vendor  of  the  property.  The 
theories  of  law,  on  which  this  proposition  has  at  different 
times  rested,  will  be  mentioned  in  a  following  section. 

The  form  of  remedy  in  New  York,  New  Jersey"  and  most 
other  states,  is  that  the  grantee  is  liable  upon  his  covenant ; 
while  in  Connecticut,*  Massachusetts,*  and  Rhode  Island,* 
assumpsit  is  held  to  be  the  proper  remedy.  In  an  action 
by  the  grantor  against  his  grantee,  on  a  contract  of  assump- 
tion, the  measure  of  damages  is  the  unpaid  amount  of  the 
mortgage.* 

'  Marshall  v.  Davies,  78  N.  Y.  415  in  a  separate  action  at  law ;  Naar  v. 

(1879),  per  Rapallo,  J.;  Mills  v.  Wat-  Union  «&  E.  L.  Co.,  34  N.  J.  Eq.  (7 

son,  1  Sween.  (N.  Y.)  374  (1869).  Stew.)  Ill  (1881);  Allen  v.  Allen,  84 

»  Klapworth  v.  Dressier,  13  N.  J.  N,   J.  Eq.  (7  Stew. )  493  (1882)  ; 

Eq.  (2  Beas.)  62  (1860),  per  Green,  Newark  Savings  Inst.  v.  Forman,  33 

Cliancellor,  relying  upon  New  York  N.  J.  Eq.  (6  Stew.)  436  (1881). 

cases,  and  citing  Green  v.  Crockett,  •  Chapman  v.  Eeardsley,  31  Conn. 

2  Dev.  &  B.  (N.  C.)  Eq.  390  (1839).  116  (1862). 

See  Stiger  v.    Mahone,    24   N.    J.  *  Williams    v.    Fowle,  132  Mass. 

Eq.   (9  C.  E.  Gr.)  426  (1874),    per  385    (1882) ;    Lappen    v.    GiU,    129 

Runyon,     Chancellor  ;    limited    in  Mass.  349  (1880) ;  Fenton  v.   Lord, 

Crowell  V.    Currier,    27  N.  J.  Eq.  128  Mass.  466  (1880).     See  Drury  v. 

(12  C.   E.    Gr.)    152    (1876).     See  Tremont    Imp.   Co.,   95   Mass.   (13 

Crowell    V.    Hospital,    27    N.    J.  Allen),  168(1866);  Braman  v.  Dowse, 

Eq.  (12  C.  E.  Gr.)  650  (1876).   The  66  Mass.  (12  Cush.)  227  (1853). 

above  cases  were  superseded  in  part  *  Urquhart  v.  Brayton,  12  R.  I. 

hy  chap.  255  of  the  laws  of  1880,  169(1880). 

providing  that  a  judgment  for  defl-  '  Reed  v,   Paul,    131    Mass.    129 

ciency  can  not    be  recovered  in  an  (1881);  Locke  v.  Homer,  131  IMass.  93 

action  to  foreclose.     The  contract  of  (1881);  Furnas  v.  Durgin,  119  Mass. 

assumption  remains  valid  to  the  mort-  500  (1876). 
gagee,  but  it  can  be  enforced  only 


272  GEANTEE    ASSUMING    PAYMENT.  [§223. 

§  223.  Purchaser  becomes  principal  debtor  and  mort- 
gagor only  a  surety. — As  between  the  mortgagor  and  his 
grantee  who  assumes  payment,  the  grantee  becomes  the 
primary  debtor  while  the  mortgagor  occupies  the  new 
relation  of  a  surety  responsible  to  the  mortgagee  alone.* 
The  land  stands  as  the  primary  fund  out  of  which  the  debt 
must  be  satisfied  in  the  first  instance ;  if  that  is  insufficient, 
it  will  rest  upon  the  purchaser  to  redeem  his  promise  made 
to  the  mortgagor  to  pay  the  obligation.  Both  the  purchaser 
and  the  mortgagor  are,  of  course,  proper  parties  to  the 
action  to  foreclose,  as  both  are  debtors  liable  to  the  plaintiff, 
although  they  sustain  to  each  other  the  relation  of  principal 
and  surety.'  As  a  general  rule  the  grantor  as  a  surety  will 
be  discharged  from  his  liability  by  any  alteration  of  the 
obligation  under  which  he  is  holden,  according  to  the  rules 
which  govern  the  relation  of  principal  and  surety. 

Thus,  a  change  of  the  terms  of  a  bond  and  mortgage, 
by  agreement  between  the  grantee  assuming  payment  and 
the  mortgagee,  made  without  the  knowledge  or  consent 
of  the  mortgagor,  canceling  a  stipulation  in  the  original 
mortgage  providing  for  releases  of  part  of  the  mortgaged 
premises  when  required,  will  discharge  the  mortgagor  of  all 
liability  for  a  judgment  of  deficiency."  "  That  an  agreement 
by  the  creditor  with  the  principal  debtor,  extending  the 
time  for  the  payment  of  the  debt,  without  the  consent  of 
the  surety,  discharges  the  latter,  is  established  by  numerous 
authorities."* 

>  Drury  v.  Clark,  16  How.  (N.  Y.)  reversing  16  Hun  (N.  T.)  606  (1879). 

Pr.  424  (1857) ;  Mills  v.  Watson,  1  But  in  Woodruflf  v.  Stickle,  28  N.  J. 

Sween.  (N.  Y.)  374  (1869).  Eq.  (1  Stew.)  549  (1877),  it  was  stip- 

*  Wadsworth  v.  Lyon,  93  N.  Y.  ulated  in  the  mortgage  that  the 
201  (1883) ;  Flagg  v.  Thurber,  14  mortgagee  should  release  lands  at 
Barb.  (N.  Y.)  196  (1851) ;  modified  the  mortgagor's  request  when  at 
in  9  N.  Y.  483  (1854) ;  Crawford  v.  least  $300  per  acre  was  paid  ;  the 
Edwards,  33  Mich.  354  ( 1876 ) ;  fact  that  the  mortgagor's  grantee 
Huyler  v.  Atwood,  26  N.  J.  Eq.  (11  released  at  a  less  price,  was  held  not 
C.  E.  CJr.)  504  (1875).  to  discharge  or  relieve  the  mortgagor 

*  Paine  v.  Jones,  76  N.  Y.  274  from  his  personal  liability  on  the 
(1879),   aflf'g  14  Hun  (N.   Y.)    577  bond. 

(1878),  relying  upon  Calvo  v.  Davies,  *  Spencer  v.  Spencer,  95  N.  Y.  853 

73  N.  Y.  211  (1878).     See  Marshall      (1884) ;  Murray  v.  Marshall,  94  N. 
V.   Davies,   78  N.   Y.   414    (1879),      Y.  611  (1884);  Calvo  v.  Davies,  73 


22-i.] 


ASSUMPTION — WHAT    CONSTITUTES. 


§  224.  What  words  and  acts  of  assumption  held  bind- 
ing-.— Specific  words  are  not  necessary  to  bind  the  purchaser, 
but  the  intent  to  assume  the  mortgage  must  be  clear  and 
certain.  The  expression  "  subject  to  the  payment  "  of  a 
mortgage  has  been  repeatedly  held  to  bind  the  purchaser ;' 
so  also  "  subject,  however,  to  the  assumption  as  part  of  the 
consideration  "  of  a  mortgage,  bound  the  grantee  personally.' 
And  the  expression  "which  the  grantee  assumes  Snd  agrees  to 
hold  the  grantor  harmless  from,"  was  held  to  renderthe  grantee 
liable  to  the  mortgagee.'  In  a  mortgage  where  the  assump- 
tion clause  read,  "  which  the  party  of  the  first  part  hereby 
agrees  to  pay,"  it  was  construed  to  mean  the  party  of 
the  second  part.*  An  agreement  to  assume  payment  of  the 
interest  can  not  be  construed  so  as  to  impose  a  hability  for. 


N.  Y.  211,  216  (1878),  aff'g  8  Hun  (N. 
Y.)  222,  per  Andrews,  J.;  Jester  v. 
Sterling,  25  Hun  (N.  Y.)  344  (1881). 
See  Meyer  v.  Lathrop,  10  Hun  (N. 
Y.)  66  (1877).  to  the  contrary;  but 
overruled  in  Paine  v.  Jones,  14  Huu 
(N.  Y.)  577,  580  (1878).  See  Pen- 
field  V.  Goodrich,  10  Hun  (N.  Y.)41 
(1877),  where  there  was  no  contract 
of  assumption  and  the  mortgagor 
was  held  not  discharged  from  his 
liability  on  the  bond  by  an  extension 
of  time  by  the  mortgagee  to  the  pur- 
chaser. See  Corbett  v.  Waterman, 
11  Iowa,  86  (1860),  holding  the 
mortgagor  not  discharged  by  an 
extension  of  time. 

1  Carley  v.  Fox.  38  Mich.  387 
(1878)  ;  Samuel  v.  Peyton,  88  Pa.  St. 
465  (1879);  Burke  v.  Gummey,49Pa. 
St.  518  (1865) ;  Woodwurd's  Appeal, 
38  Pa.  St.  322  (1861).  See  Davis' 
Appeal,  89  Pa.  St.  272  (1879),  which 
seems  to  overrule  Burke  v.  Gummey, 
49  Pa.  St.  518  (1865),  on  this  lan- 
guage. See  Merriman  v.  Moore,  90 
Pa.  St.  78  (1879) ;  in  point,  Dingel- 
dein  v.  Third  Ave.  R.  R.  Co.,  37  N. 
Y.  575,  578  (1868),  per  Hunt,  Ch.  J., 
considering  the  question  at  length  ; 


See 
354 

(N. 


Collins  V.  Rowe,  1  Abb.  (N.  Y.)  N. 
C.  97  (1876),  and  the  note,  exhaus- 
tively collating  the  cases  on  this 
point  and  distinguishing  them. 
Bennett  v.  Bates,  94  N.  Y. 
(1884). 

*  Douglass  V.  Cross,  56  How. 
Y.)  Pr.  330  (1878),  per  VanVorst,  J., 
distinguishing  Collins  v.  Rowe,  1 
Abb.  1;N.  Y.)  N.  C.  97  (1876),  where 
the  language  was,  "  subject,  never- 
theless, to  the  payment  of  one-eighth 
of  a  certain  mortgage  now  on  the 
premises,"  which  was  held  not  to 
bind  the  grantee.  And  in  Hoy  v. 
Bramhall,  19  N.  J.  Eq.  (4  C.  E.  Gr.) 
74,  78,  563,  568  (1868),  Chancellor 
Zabriskie  says,  "  The  clause  in  the 
deed  '  subject  to  the  payment  of  all 
liens  now  on  said  premises '  can  not 
be  construed  into  a  covenant  to  pay 
the  liens.  It  is  only  a  limitation  of 
the  covenants  of  warranty  and 
against  incumbrances." 

8  Muhlig  v,  Fiske,  131  Mass  110 
(1881) ;  Locke  v.  Homer,  131  Mass. 
93  (1881). 

*  Fairchild  v.  Lynch,  42  N.  Y. 
Supr.  Ct.  (10  J.  &  S.)  265  (1877). 

08) 


274 


ASSUMPTION WHAT    CONSTITUTES. 


[§  224. 


the  principal  sum.'  Even  a  parol  promise  by  the  purchaser 
to  assume  a  mortgage  may  be  enforced,  as  the  contract  of 
assumption  is  held  to  exist  independent  of  and  apart  from 
the  deed,  though  nearly  always  engrossed  upon  it.' 

It  is  not  necessary  for  the  grantee  to  sign  the  deed  in 
order  to  bind  himself  with  the  payment  of  the  mortgage 
debt  which  he  assumes ;  his  acceptance  of  the  deed,  with 
knowledge  o'f  its  terms,  imposes  the  obligation  upon  him  as 
effectually  as  though  he  signed  it  ;°  if,  however,  there  is  no 
actual  acceptance  or  intention  to  assume  the  mortgage,  the 
grantee  will  not  be  holden  for  the  debt,  for  the  reason  that 
there  has  been  no  meeting  of  minds,  and  consequently  no 
contract. 

Thus,  if  an  assumption  clause  is  inserted  in  an  unusual 
place  in  the  deed,  so  that  it  escapes  the  notice  of  the  grantee, 
and  he  had  no  intention  to  assume  payment,  he  will  not  be 
held  responsible  to  the  mortgagee  ;*  so  also  if  the  scrivener 


'  Manhattan  Life  Ins.  Co.  v.  Craw- 
ford, 9  Abb.  (N.  Y.)  N.  C.  365 
(1879). 

2  Taintor  v.  Hemingway,  18  Hun 
(N.  Y.)  458  (1879)  ;  aflf'd  83  N.  Y. 
610  (1880),  where  the  deed  was  made 
subject  to  the  mortgage,  and  an  oral 
agreement  to  pay  it  was  held  to  be 
valid.  See  Harlem  Sav.  Bank  v. 
Mickelsburgh,  57  How.  (N.  Y.)  Pr. 
106  (1878).  In  point,  Ely  v.  McNight, 
30  How.  (N.  Y.)  Pr.  97  (1864), 
where  the  question  of  parol  assump- 
tion is  considered  at  length.  Slau- 
son  V.  Watkins,  44  N.  Y.  Supr. 
Ct.  (12  J.  «&  S. )  73  (1878).  In 
Pike  V.  Seiter,  15  Hun  (N.  Y. ) 
402  (1878),  a  husband  in  a  land  con- 
tract, and  subsequently  orally,  as- 
sumed the  payment  of  a  mortgage, 
but  he  caused  the  deed  to  be  made 
in  his  wife's  name;  he,  instead  of  his 
wife,  was  held  personally  liable.  See 
Merriman  v.  Moore,  90  Pa.  St.  78 
(1879) ;  McDill  v.  Gunn,  43  Ind.  315 
(1873);  Ream  v.  Jack,  44  Iowa,  325 


(1876) ;  Lamb  v.  Tucker,  42  Iowa, 
118  (1875);  Bowen  v.  Kurtz,  37 
Iowa,  239  (1873)  ;  Miller  v.  Thomp- 
son, 34  Mich.  10  (1876) ;  Crowell  v. 
Hospital,  27  N.  J.  Eq.  (12  C.  E.  Gr.) 
650  (1876) ;  Ketcham  v.  Brooks,  27 
N.  J.  Eq.  (12  C.  E.  Gr.)  347 
(1876).  See  Wilson  v.  King,  27 
N.  J.  Eq.  (12  C.  E.  Gr.)  374  (1876), 
where  the  proof  was  held  insufficient, 
and  the  case  failed  for  that  reason, 

» Bowen  v.  Beck,  94  N.  Y.  86 
(1883)  ;  Ricard  v.  Sanderson,  41  N. 
Y.  179,  181  (1869) ;  Wales  v.  Sher- 
wood, 52  How.  (N.  Y.)  Pr.  413 
(1876),  and  the  cases  cited. 

*  Deyermand  v.  Chamberlain,  88 
N.  Y.  658  (1882)  ;  Kilmer  v.  Smith, 
77  N.  Y.  226  (1879) ;  Trustees  of 
Dispensary  of  N.  Y.  v.  Merriman, 
59  How.  (N.  Y.)  Pr.  226  (1880) ; 
Parker  v.  Jenks,  36  N.  J.  Eq.  (9 
Stew.)  398  (1883) ;  Culver  v.  Badger, 
29  N.  J.  Eq.  (2  Stew.)  74  (1874); 
Bull  V.  Titsworth,  29  K  J.  Eq.  (2 
Stew.)  73  (1878).    In  VanHorn  v. 


!25.] 


DEFENSES    TO    ASSUMPTION. 


275 


inserts  an  assumption  clause  without  the  knowledge  of 
either  party,  or  if  it  be  fraudulently  inserted.'  In  a  case 
where  a  deed,  containing  an  assumption  clause,  was  executed 
merely  for  the  purpose  of  transferring  the  title,  the  grantee 
was  held  not  liable."  But  as  against  a  bona  fide  purchaser  of 
a  mortgage  and  notes  before  maturity,  who  relied  in  part 
upon  the  contract  of  assulnption,  such  mistakes  and  frauds 
could  not  be  pleaded  in  defense,  and  the  grantee  would  be 
held  personally  liable.'  It  is  not  necessary  for  the  mort- 
gagee to  be  notified  of  the  conveyance ;  the  purchaser 
becomes,  at  once,  liable  to  him  for  the  debt.  It  is  necessary 
that  the  conveyance  be  absolute  in  its  terms,*  and  t»hat  it 
transfer  the  whole,  or  an  undivided  part,  of  the  premises. 

§  225.  Usury  or  defective  title  no  defence  to  contract 
of  assumption. — A  failure  of  title  is  held  to  be  a  good 
defense  for  a  purchaser,  who  assumed  the  payment  of  a 
mortgage,  against  his  personal  liability,  for  the  reason  that 
there  is  a  failure  of  the  consideration  upon  which  the  contract 
of  assumption  was  based.*     Judge  Miller,  of  the  New  York 


Powers,  26  N.  J.  Eq.  (11  C.  E.  Gr.) 
257  (1875),  a  husband  caused  a  deed 
containing  an  assumption  clause  to 
be  executed  to  his  wife  without  her 
knowledge ;  she  was  held  not  per- 
sonally liable.  Precisely  the  same 
facts  and  ruling  appear  in  Munson 
V.  Dyett,  56  How.  (N.  Y.)  Pr.  333 
(1878).  See  Albany  City  S.  Inst.  v. 
Burdick,  87  N.  Y.  40  (1881).  In 
Best  V.  Brown,  25  Hun  (N.  Y.)  223 
(1881),  the  grantee  refused  accept- 
ance of  a  deed  containing  an  assump- 
tion clause,  yet  the  grantor  recorded 
the  deed  ;  the  grantee  was  held  not 
personally  liable. 

1  Fuller  V.  Lamar,  53  Iowa,  477 
(1880).  See  Albany  City  S.  Inst.  v. 
Burdick,  87  N.  Y.  40  (1881),  revers- 
ing 20  Hun  (N.  Y.)  104  ;  s.  c.  56 
How.  (N.  Y.)  Pr.  500  (1878),  as  to 
the  amount  of  evidence  of  fraud 
that  is  necessary. 


^  Deyermand  v.  Chamberlain,  22 
Hun  (N.  Y.)  110  (1880)  ;  aff'd  88  N. 
Y.  658  (1882).  See  Best  v.  Brown, 
25  Hun  (N.  Y.)  223  (1881). 

^  Hayden  v.  Snow,  9  Biss.  C.  C. 
511  (1880). 

*  Garnsey  v.  Rogers,  47  N.  Y.  233 
(1872).  See  Flagg  v.  Munger,  9  N. 
Y.  483-499  (1854),  where  there  was 
an  acceptance  of  the  deed  condition- 
ally at  first,  but  subsequently  made 
absolute  on  the  giving  by  the  vendor 
of  a  conditional  bond  :  a  breach  of 
this  was  held  to  discharge  the  pur- 
chaser from  any  personal  liability 
on  the  contract  of  assumption,  'per 
Denio  and  Edwards,  JJ. 

^  Dunning  v.  Leavitt,  85  N.  Y.  30 
(1881),  reversing  20  Hun  (N.  Y.)  178; 
Thorp  V.  Keokuk  Coal  Co.,  48  N. 
Y.  253  (1872)  ;  s.  c.  47  Barb.  (N.  Y.) 
439  (1866)  ;  Garnsey  v.  Rogers.  47 
N.  Y.  233  (1873) ;  Curtiss  v.  Bush, 


276  ASSUMPTION BENEFITS   TO    MORTGAGEE.     [§226. 

Court  of  Appeals,  limited  this  rule  in  1878,  by  saying:  "  It 
is  held  that  where  a  grantee  of  mortgaged  premises  takes  a 
deed  of  the  same  subject  to  the  mortgage,  and  thereby 
assumes  to  pay  the  mortgage,  he  is  estopped  from  contesting 
the  consideration  and  validity  of  the  mortgage.  *  *  *  The 
general  rule  is,  that  there  must  be  an  eviction  before  any 
relief  can  be  granted,  on  the  ground  of  a  failure  of  title  or 
consideration.  So  long  as  he  remains  in  the  peaceful  and 
quiet  possession  of  the  premises,  or  until  he  surrenders 
possession  of  the  same  to  a  paramount  title,  the  mortgagor 
or  the  purchaser  who  assumes  the  payment  of  the  mortgage, 
has  no  defense  to  the  same.'"  After  the  contract  of  assump- 
tion has  been  made  the  grantee  can  not  plead  the  defense 
of  usury  ;'  nor  can  he  ordinarily  question  the  consideration 
or  validity  of  the  mortgage.' 

§  226.    Theories  of  law  upon  which  a  mortgagee  is 
allowed  the  benefit  of  the  contract  of  assumption.— 

There  are  two  theories  of  law  upon  which  a  mortgagee  may 
base  his  right  to  hold  a  purchaser,  who  has  assumed  the 
payment  of  his  mortgage,  personally  liable  for  the  mortgage 
debt  ;  first,  the  theory  of  equitable  subrogation,  by  which  a 
creditor  is  entitled  to  all  the  collateral  securities  which  his 
debtor  has  obtained  to  re-enforce  the  primary  obligation  ;* 
and  second,  the  theory  that  if  one  person  makes  a  promise 
to  another  for  the  benefit  of  a  third  person,  that  third  person 
may  maintain  an  action  on  the  promise.'     The  first  of  these 


39  Barb.   (N.   Y.)  661  (1863).      In  »  Hartley  v.  Harrison,  24  N.  Y. 

point,  Benedict  v.  Hunt,  32  Iowa,  170  (1861). 

27,  30  (1871) ;  Hulfish  v.  O'Brien,  20  "  Freeman  v.  Auld,  44  N.  Y.  50 

N.  J.  Eq.  (5  C.  E.  Gr.)  230  (1869) ;  (1870).     See  Hartley  v.  Tatham,  1 

Hile  V.  Davidson,  20  N.  J.  Eq.  (5  Robt.  (N.  Y.)  246  (1863),  on  estoppel. 

C.  E.  Gr.)  228  (1869).  "  Trotter  v.  Hughes,  12  N.  Y.  74, 

1  Parkinson  v.  Sherman,  74  N.  Y.  79  (1854).     See  post  §  230. 

88,   92  ( 1878 ) ;  Ritter  v.   Phillips,  »  Ross  v.  Kennison,  38  Iowa,  396 

53  K   Y.   586    (1873);    Thorp  v.  (1874).    For  an  exhaustive  collection 

Keokuk  Coal  Co. ,   48  N.   Y.   253  and  explanation  of  cases  in  all  the 

(1872) ;  Freeman  v.  Auld,  44  N.  Y.  English  and  American  courts,  apply- 

50  (1870) ;    Shadbolt  v.   Bassett,   1  ing  this  principle,  see  the  note  to 

Lans.  (N.  Y.)  121  (1869).     On  the  Cocker's  Case,  17  Eng.  Rep.  757,768 

question  of  eviction,  see  Dunning  v.  (1876),  Moak's  notes. 
Leavitt,  85  N.  Y.  30  (1881). 


§  226.]      ASSUMPTION BENEFITS   TO    MOETGAGEE,  277 

is  as  old  as  English  law  itself,  and  was  the  earliest  of  the  two 
theories  to  be  applied  to  mortgage  foreclosures,  when  the 
statute  was  passed  authorizing  the  recovery  of  a  personal 
judgment  for  deficiency  in  an  action  to  foreclose  a  mortgage.' 
The  doctrine  of  subrogation  is  still,  in  many  states,  the  only 
one  upon  which  the  mortgagee's  right  to  hold  the  purchaser 
responsible  for  the  debt  rests.' 

But  in  New  York  Judge  Denio  of  the  Court  of  Appeals, 
about  1861,' advanced, the  second  theory  in  application  to 
mortgage  foreclosures,  in  a  case  where  the  doctrine  of  subro- 
gation would  not  sustain  the  conclusions  which  he  desired 
to  reach.  This  second  theory  has  grown  in  strong  favor  with 
New  York  courts  wherever  it  has  been  possible  to  apply  it ; 
and  there  are  only  two  cases  (presented  in  the  next  two 
sections)  in  which  the  doctrine  of  the  right  of  a  third  party 
to  enforce  such  a  promise  made  for  his  benefit,  can  not  be 
applied  to  mortgage  foreclosures.*  In  Vrooman  v.  Turner* 
Judge  Allen  distinguished  and  harmonized  the  cases  based 
upon  these  two  theories,  and  showed  that  both  were  still  in 
force  and  applied  by  New  York  courts  to  mortgage  cases. 
The  second  theory,  however,  seems  to  be  the  favorite. 

Under  the  theory  of  subrogation,  a  mortgagee  could  en- 
force his  rights  against  a  purchaser  only  in  the  equitable 
action  of  foreclosure  and  not  in  a  separate  action  at  law  ;' 
but  with  the  adoption  of  the  second  theory,  it  was  held  that 
a  mortgagee  could  exercise  his  rights  against  a  purchaser  in 
an  action  at  law,  and  without  foreclosure ;'  the  practice  of 


'  Garnsey  v.  Eogers,  47  N.  T.  233  adopted  the  second  theory  ;  Ross  v. 

(1872) ;  Trotter  v.  Hughes,  12  N.  Y.  Kennison,  38  Iowa,  396  (1874). 

74  (1854) ;   Marsh  v.  Pike,  10  Paige  *  Dunning  v.  Leavitt,  85  N.  Y.  39 

Ch.  (N.  Y.)  595  (1844) ;  Dias  v.  Bou-  (1881) ;  Hand  v.  Kennedy,  83  N.  Y. 

chaud,    10  Paige   Ch.    (N.  Y.)  446  149,  154  (1880) ;  Pardee  v.  Treat,  83 

(1843) ;  Curtis  v.  Tyler,  9  Paige  Ch.  N.  Y.  385  (1880) ;  Thorp  v.  Keokuk 

(N.  Y.)  432  (1842).  Coal  Co.,  48  N.  Y.  253  (1872). 

2  See  Crowell  v.  Hospital,  27  N.  '  69  N.  Y.  282  (1877). 

J.   Eq.    ( 12  C.   E.   Gr. )    650,    657,  «  King  v.  Whiteley,  10  Paige  Ch. 

(1876),  where  the  question  is  fully  (N.  Y.)  465  (1843). 

discussed.  '  Thorp   v.  Keokuk  Coal  Co     48 

«Burr  V.  Beers,    24  N    Y.    178  N.  Y.  253  (1872);  Burr  v.  Beers,  24 

(1861)  ;  Lawrence  v.  Fox,   20  N.  Y.  N.  Y.  178  (1861)  ;  Mechanics'   Sav- 

268  (1859).    The  courts  of  Iowa  have  ings  Bank  v.  Goff,  13  R.  I.  516  (1882); 


278  '  WHEN   GRANTEE   NOT   LIABLE.  [§227. 

enforcing  this  right  in  an  action  at  law  is  not,  however,  en- 
couraged by  the  courts. 

§  227.  Purchaser  not  personally  liable  when  his  gran- 
tor is  not  personally  liable,  though  he  assumes  payment 
of  the  mortgage. — A  grantee  of  mortgaged  premises,  who 
purchases  subject  to  a  mortgage  which  he  assumes  and 
agrees  to  pay,  will  not  be  held  liable  for  a  deficiency  arising 
on  a  foreclosure  and  sale,  unless  his  grantor  was  also  person- 
ally  liable,  legally  or  equitably,  for  the  payment  of  the  mort- 
gage.* "  It  is  well  settled  that  to  make  a  promise  of  this 
nature  effective,  it  must  be  made  by  a  person  personally 
liable,  legally  or  equitably,  for  the  mortgage  debt,  and  if 
there  is  a  break  anywhere  in  the  chain  of  liability,  all  the 
subsequent  promises  are  without  obligation."^ 

This  proposition  has  been  three  times  squarely  before  the 
court  of  last  resort  in  the  state  of  New  York,'  and  the  result 
has  always  been  a  judgment  of  affirmance.  The  rule  was 
first  based,  by  Chancellor  Walworth,^  in  1843,  upon  the  doc- 
trine of  subrogation.    Judge  Denio  applied  the  same  doctrine 


In    point,     Fitzgerald    v.    Barker,  (N.    Y.)  Pr.    333  (1878)  ;    King   v. 

70  Mo.    685  (1881) ;    Sparkman  v.  Whitely,  10  Paige  Ch.  (N.  Y.)  465 

Gove,44N.J.  L.(15Vr.)252(1882);  (1843).     In  point.  Brewer  v.  Maurer, 

the  grantor  may  also  sue  the  pur-  38  Ohio  St.    543,  550  (1883),   citing 

chaser,  Pigart  v.  Halderman,  75  Ind.  the  leading  cases  in  New  York  and 

564(1881).     See  also  Meech  v.  En-  other  states. 

sign,  49  Conn.  191  (1881).     In  New  2  Wise  v.  Fuller,  29  N.  J.  Eq.   (2 

Jersey,  since  the  passage  of  chap.  Stew.)  257,  266  (1878),  in  which  the 

255,  laws  of  1880,  this  right  can  be  Chancellor  relies  upon  the  New  York 

exercised  only  in  an  action  at  law  ;  cases.     See  Crowell  v.  Currier,  27 

Naar  v.  Union  &  E.  L.  Co.,  34  N.  N.   J.    Eq.   (12  C.  E.  Gr.)   152,  155 

J.  Eq.  (7  Stew.)  Ill  (1881)  ;  Allen  v.  (1876) ;  reviewed  on  appeal  in  27  N. 

Allen,  34  N.  J.  Eq.  (7  Stew.)  493  J.  Eq.    (12  C.  E.   Gr.)  650  (1876) ; 

(1881).  Norwood  v.  DeHart,  30  N.  J.  Eq. 

'  Dunning  v.  Leavitt,  85  N.  Y.  30  (3  Stew.)  412    (1879) ;     Arnaud    v. 

(1881)  ;  Cashman  v.    Henry,  75  N.  Grigg,  29  N.  J.  Eq.  (2  Stew.)  482 

Y.  103  (1878)  ;  s.  c.  55  How.  (N.  Y.)  (1878). 

234;  8.  c.  44  N.  Y.  Supr.  Ct.  (12  J.  &  *  Vrooman  v.  Turner,   69  N.  Y. 

S.)  93  (1878)  ;  Vrooman  v.  Turner,  280  (1877)  ;  Trotter  v.   Hughes,    12 

69  N.  Y.  280  (1877) ;  Thorp  v.  Keo-  N.  Y.  74  (1854) ;  King  v.  Whitley, 

kuk  Coal  Co.,  48  N.  Y.  253  (1872) ;  10  Paige  Ch.  (N.  Y.)  465  (1843). 

Trotter    v.   Hughes,    12  N.    Y.    74  •*  King  v.  Whitely,  10  Paige  Ch. 

(1854) ;  Munson  v.  Dyett,  56  How.  (N.  Y.)  465  (1843). 


§  228.]  ASSUMPTION    BY    JUNIOR   MORTGAGEE.  279 

in  1854  ;  but  in  i86r,  in  the  leading  case  of  Burr  v.  Beers,'  he 
preferred  the  second  doctrine,  that  if  one  person  makes  a 
promise  to  another  for  the  benefit  of  a  third  person,  that 
third  person  may  maintain  an  action  on  the  promise.  In 
1872*  and  in  1881'  he  sustained  and  appHed  the  same  doctrine. 

But  Vrooman  v.  Turner^  is  the  leading  case  upon  the 
proposition  of  this  section  and  harmonizes  the  two  doctrines, 
showing  that  the  proposition  can  be  based  on  either,  and  stat- 
ing as  the  fundamental  reason  of  the  rule,  that  there  is  no 
consideration  to  support  the  contract  of  assumption.  If  the. 
promise  of  the  grantee  to  the  grantor  is  void  for  want  of 
consideration,  a  third  party  can,  of  course,  claim  no  advan- 
tage from  it.  "  To  give  a  third  party  who  may  derive  a 
benefit  from  the  performance  of  the  promise,  an  action,  there 
must  be  first,  an  intent  by  the  promisee  (purchaser)  to  secure 
some  benefit  to  the  third  party,  and  second,  some  privity 
between  the  two,  the  promisee  (purchaser)  and  the  party  to 
be  benefited,  and  some  obligation  or  duty  owing  from  the 
former  to  the  latter,  which  would  give  him  a  legal  or  equit- 
able claim  to  the  benefit  of  the  promise,  or  an  equivalent 
from  him  personally."* 

In  Pennsylvania  it  has  been  held  that  the  purchaser  is 
liable  upon  his  assumption  of  a  mortgage,  although  the 
agreement  to  assume  be  contained  in  a  deed  from  a  grantor 
who  was  under  no  personal  liability  to  pay  the  mortgage ; 
and  contrary  to  the  New  York  cases,  it  has  been  held  that 
the  agreement  could  not  be  said  to  be  without  consideration 
inasmuch  as  the  price  of  the  land  was  a  consideration.' 

§  228.  Assumption  of  mortgage  by  subsequent  mort- 
gagee does  not  make  him  personally  liable  to  prior 
mortgagee. — A  stipulation  in  a  mortgage,  whereby  the 
mortgagee  assumes  and  agrees  to  pay  a  prior  mortgage  on 


»  24  N.  Y.  179  (1861).  »  Vrooman  v.  Turner.   69  N.  Y. 

«  Thorp  V.  Keokuk  Coal  Co.,  48  280,  283  (1877). 

N.  Y.  253  (1872).  «  Merriroan  v.  Moore,  90  Pa.    St. 

3  Dunning  v.  Leavitt,  85  N.  Y.  37  78,  81  (1879),  distinguisJiing  Samuel 

(1881).  V.  Peyton,   88  Pa.    St.   465    (1879), 

*  69  N.  Y.  283  (1877),  per  Allen,  -which  is  seemingly   contrary  to  the 

J.,  reversing  8  Hun  (N.  Y.)  78  (1876\  text. 


280  ASSUJVIPTION    BY    JUNIOR    MORTGAGEE.      [§229. 

the  premises,  does  not  impose  upon  him  such  a  personal 
liabiHty  for  the  prior  mortgage  debt,  as  can  be  enforced  against 
him  by  the  prior  mortgagee.'  The  stipulation  in  such  cases 
is  not  a  promise  made  by  the  mortgagee  to  the  mortgagor 
for  the  benefit  of  the  prior  mortgagee,  but  is  a  promise  for 
the  benefit  of  the  mortgagor  alone  ;  it  is  to  protect  his  prop- 
erty by  advancing  money  to  pay  his  debt.*  But  where  a 
senior  mortgagee,  in  consideration  of  the  conveyance  to  him 
of  the  equity  of  redemption,  assumes  the  payment  of  a  junior 
mortgage,  he  is  personally  bound  to  pay  it  and  to  relieve  the 
grantor  and  mortgagor  from  his  liability.'  The  question 
presented  in  this  section  first  came  before  the  Court  of 
Appeals  of  New  York  in  1869  in  Ricard  v.  Sanderson,*  when 
the  reverse  of  the  above  proposition  was  sustained,  and  a 
person,  who  had  taken  a  deed  as  a  security  merely  and 
assumed  payment  of  the  prior  mortgage,  was  held  personally 
liable. 

§  229.  New  York  cases  reviewed. — The  proposition  of 
the  preceding  section  was,  however,  pointedly  sustained  by 
Judge  Rapallo,  in  1872,  in  the  leading  case  of  Garnsey  v. 
Rogers,*  where  a  subsequent  mortgagee,  who  had  assumed 
the  payment  of  a  prior  mortgage,  was  held  not  liable  to  the 
prior  mortgagee,  but  to  the  mortgagor  alone.  Judge 
Rapallo  explains  this  conflict  of  opinion  by  the  fact  that  in 
Garnsey  v.  Rogers  the  subsequent  mortgage,  containing  the 
stipulation,  was  canceled  and  the  mortgaged  premises  were 
restored  to  the  mortgagor,  the  stipulation  becoming,  as  to 
the  parties  to  it,  extinguished,  while  in  Ricard  v.  Sanderson 
it  does  not  appear  that  the  debt  for  which  the  deed  was 


'  Pardee  v.  Treat,  82  N.  Y.   385  per  Chancellor  Runyon,  distinguish- 

(1880),  reversing  18  Hun (N.  Y.)298;  ing  Campbell  v.  Smith,  71  N.  Y.  26 

in  point,  Root  v.  Wright,  84  N.  Y.  72  (1877),  and  relying  upon  Garnsey  v. 

(1881) ;  Campbell  v.  Smith,  71  N.  Y.  Rogers,  47  N.  Y.  233   (1872),   say- 

26  (1877),  affirming  8  Hun  (N.  Y.)  6  ing  that  the  contract  of  assumption 

(1876).     But  see  Babcock  v.  Jordan,  is  not  for  the  benefit  of  the  mort- 

24  Ind.  14  (1865),  and  Racouillat  v.  gagee. 

SanSevain,  32  Cal.  376  (1867),  where  ^  Huebsch  v.  Scheel,   81   Dl.   281 

the  opposite  view  seems  to  be  held.  (1876). 

» In  point,  Arnaud  v.  Grigg,  29  *  41  N.  Y.  179  (1869). 

K.  J.  Eq.  (2  Stew.)  482,  486  (1878),  »  47  N.  Y.  233  (1872). 


§  229. J       ASSUMPTioisr  by  juistioe  mortgagee.  281 

given  as  a  security  had  been  extinguished  at  the  time  of  the 
foreclosure,  or  that  the  premises  had  been  reconveyed  in 
pursuance  of  any  condition  or  defeasance  on  which  the  deed 
was  given.*  But  Judge  Andrews,  who  has  written  a  majority 
of  the  opinions  in  the  Court  of  Appeals  concerning  questions 
affecting  the  assumption  of  a  mortgage,  pointedly  overruled 
Ricard  v.  Sanderson,  in  1880,  in  Pardee  v.  Treat,'  although 
he  did  not  refer  to  the  case  in  his  opinion. 

The  distinguishing  question  as  to  whether  a  person,  who 
assumes  the  payment  of  a  mortgage  in  a  subsequent  deed  or 
mortgage,  is  personally  liable  to  a  prior  mortgagee,  is,  was 
the  contract  of  assumption  in  aid  of  the  grantor  alone ;  or 
was  it  also  for  the  benefit  of  the  mortgagee?  Judge  An- 
drews says  in  the  above  case,  "  We  think  the  true  result  of  the 
decisions  upon  the  effect  of  an  assumption  clause  in  a  deed 
is,  that  it  can  only  be  enforced  by  a  lienor,  where  in  equity 
the  debt  of  the  grantor  secured  by  the  lien  becomes,  by  the 
agreement  between  him  and  his  grantee,  who  assumes  the  pay- 
ment, the  debt  of  the  latter.  On  the  other  hand,  if  the 
assumption  is  in  aid  of  the  grantor,  upon  the  security  of 
the  land,  and  not  as  between  them,  a  substitution  of  the 
liability  of  the  grantee  for  that  of  the  grantor,  or  in  other 
words,  if,  in  equity  as  at  law,  the  grantor  remains  the  principal 
debtor,  then  the  assumption  clause  is  a  contract  between  the 
parties  to  the  deed  alone,  and  the  liability  of  the  grantee  for 
any  breach  of  his  obligation,  is  to  the  grantor  only."* 


•  See  Campbell  v.  Smith,  71  N.  debt  owing  by  the  grantor  to  Rogers, 
Y.  26,  28  (1877),  afE'g  8  Hun  (N.  Y.)  upon  a  parol  defeasance,  that  upon 
6  (1876),  per  Church,  Ch.  J.,  distin-  payment  of  the  debt  Rogers  should 
guishing  Garnsey  v.  Rogers,  47  N.  Y.  reconvey  the  premises.  The  plaintiff 
233  (1872),  on  the  question  of  deeds  was  the  owner  of  mortgages  which 
being  merely  a  creditor's  security.  were  liens  on  the  premises  when  the 

•  82  N.   Y.  385  (1880).  conveyance  to  Rogers  was    made. 

•  In  further  reviewing  and  distin-  The  question  decided  in  King  v. 
guishing  Garnsey  v.  Rogers,  Judge  Whitely,  10  Paige  Ch.  (N.  Y.)  465 
Andrews  says,  at  page  388,  "  In  (1843),  did  not  arise.  The  grantor 
that  case  the  covenant  was  contained  of  Rogers  was  himself  liable  to  pay 
in  a  deed  from  Hermance  to  the  the  mortgage,  and  if  Rogers  had 
defendant,  Rogers,  absolute  in  form,  stood  in  the  position  of  an  absolute 
■which  was  in  equity  a  mortgage,  the  purchaser  of  the  land,  his  liability  to 
deed  having  been  given  to  secure  a  the  plaintiff,  either  in  an  equitable 


282 


GRANTOR   CAN   NOT    RELEASE    GRANTEE.       [§  28C 


§  230.  Grantor  can  not  release  his  grantee,  assuming 
a  mortgage,  from  his  liability  to  the  mortgagee  in  New 
York. — It  is  now  settled  in  New  York,  that  where  a  grantee 
in  an  absolute  conveyance  of  lands  assumes  and  agrees  to 
pay  a  mortgage  thereon,  an  absolute  and  irrevocable  obliga- 
tion is  created  in  favor  of  the  mortgagee,  which  can  not  be 
released  or  affected  by  any  act  or  agreement  of  the  grantor 
to  which  the  mortgagee  does  not  assent.'  The  contrary  of 
this  proposition  was  held  in  Stephens  v.  Casbacker,*  in  the 
Supreme  Court.  But  Justice  Bockes,  in  the  later  case  of 
Douglas  V.  Wells, ^  squarely  overrules  Stephens  v.  Casbacker, 
and  after  an  exhaustive  review  of  all  the  cases  upon  the  ques- 
tion, concludes  with  an  affirmance  of  the  proposition  of  this 
section,  attaching  great  importance  to  the  opinion  of  Rapallo, 
J.,  in  Garnsey  v.  Rogers  :*  "  It  must  be  considered  that 
when  such  an  assumption  is  made  on  an  absolute  conveyance 
of  land,  it  is  unconditional  and  irrevocable.  The  grantor 
can  not  retract  his  conveyance,  nor  the  grantee  his  promise 
or   undertaking ;   but  when   contained  in  a   mortgage,  the 


or  legal  action,  could  not  upon  the 
authorities,  have  been  questioned. 
But  the  court  held  that  the  deed, 
being  in  equity  a  mortgage,  the 
covenant  by  Rogers  to  pay  the  in- 
cumbrances was,  in  legal  eilect,  a 
covenant  to  make  advances  for  the 
benefit  of  his  grantor  upon  the  secur- 
ity of  tiie  land.  The  promise  was 
not,  therefore,  a  promise  made  for 
the  benefit  of  the  plaintiff,  although 
he  might  be  benefited  by  its  perfor- 
mance. It  was  not  a  case  for  equit- 
able subrogation,  because  the  mort- 
gage debts  remained  the  debts  of  the 
grantor  who  continued,  in  equity  at 
least,  the  owner  of  the  land.  The 
refusal  to  enforce  the  covenant  did 
not  proceed  upon  the  ground  of 
want  of  consideration." 

1  Douglas  V.  Wells,  18  Hun  (N. 
Y.)  88  (1879).  In  point,  Ranney  v. 
McMuUen,  5  Abb.  (N.  Y.)  N.  C. 
246  (1878).    See  the  opinion  of  the 


referee  in  Ranney  v.  Peyser,  5  Abb. 
(N.Y.)  N.  C.  259(1876),  collatingand 
reviewing  the  authorities.  In  Fair- 
childs  V.  Lynch,  46  N.Y.  Supr.Ct.  (14 
J.  &  S.)  1  (1880),  the  grantor  (mort- 
gagor) by  mesne  assignments  became 
the  owner  of  the  bond  and  mortgage; 
on  tlje  doctrine  of  merger  this  was 
held  to  release  the  grantee  from  his 
personal  covenant,  though  the  mort- 
gage had  been  assigned  to  a  third 
person.  See  also  Talburt  ▼.  Berk- 
shire, 80  Ind.  434  (1881). 

2  8  Hun  (N.  Y.)  116  (1876).  See 
Hartley  v.  Harrison,  24  N.  Y.  170 
(1861). 

3  57  How.  (K  Y.)  Pr.  378  (1879) ; 
Ranney  v.  McMuUen,  5  Abb.  (N. 
Y.)  N.  C.  246  (1878)  ;  Fleischauer 
V.  Doellner,  58  How.  (N.  Y.)  Pr. 
190  (1879);  Devlin  v.  Murphy,  56 
How.  (N.  Y.)  Pr.  326  (1878). 

*  47  N.  Y.  242  (1872).  See  Judson 
V.  Dada,  79  N.  Y.  379  (1880). 


§  231.]     GKANTOli  CAN  EELEASE  GEANTEE — WHEN.  283 

conveyance  is  defeasible."  This  ruling  is  limited  to  those  cases 
where  the  grant  is  absolute  and  the  promise  unconditional. 

If  conditions  are  in  any  way  connected  with  the  contract 
of  assumption,  the  grantor  may,  sometimes,  release  his 
grantee.  Thus,  where  an  oral  agreement  was  made  contem- 
poraneous with  the  deed  and  contract  of  assumption,  that 
the  grantor  would  take  the  land  back  at  any  time,  should  the 
grantee  become  dissatisfied  with  the  purchase,  and  release 
the  grantee  from  his  covenant  in  the  original  deed,  a 
release  by  the  grantor  was  held  to  discharge  the  grantee 
from  all  liability  to  the  mortgagee  for  a  judgment  of  defi- 
ciency.' It  has  been  intimated  that,  if  the  mortgagee  had 
received  no  knowledge  of  the  contract  of  assumption,  the 
grantor  might  then  release  his  grantee."  But  Bockes,  J., 
has  set  aside  that  intimation  as  being  without  authority.'  A 
grantor  can  not  release  his  grantee  from  liis  contract  of 
assumption  as  against  a  purchaser  of  the  mortgage,  who  has 
relied  upon  the  contract  of  assumption  as  it  appeared  on 
record."  The  proposition  of  this  section  is  best  sustained 
upon  the  second  of  the  foregoing  theories,  that  if  one  person 
makes  a  promise  to  another,  upon  a  valuable  consideration 
for  the  benefit  of  a  third  person,  that  third  person  can  main- 
tain an  action  on  the  promise.* 

§  231.  Contrary  ruling  in  New  Jersey. — In  New  Jersey, 
however,  the  right  of  a  mortgagee  to  take  advantage  of  the 
contract  of  assumption  against  a  purchaser  is  based  upon 


>  Devlin  v.  Murphy,  56  How.  (N.  *  Paine  v.  Jones,  14  Hun  (N.  Y.) 

T.)  Pr.  326  (1878) ;  s.  c.  5  Abb.  (N.  577  (1878);  aff'd  76  N.  Y.  274(1879); 

Y.)  N.  C.  242  (1878),  fer  VanVorst,  Whiting    v.    Geary,    14    Hun    (N. 

J.,  reviewing  Stephens  V.  Casbacker,  Y.)  498,  500  (1878).     In  point,  Gil- 

8   Hun    (N.   Y.)  116  (1876).      See  bert    v.    Sanderson,   56    Iowa,   349 

Fleischauer  v.    Doellner,   58  How.  (1881) ;  Brewer  v.  Maurer,  38  Ohio 

(N.  Y.)  Pr.  190  (1879),  per  VanVorst,  St.  543  (1883). 
J.,  distinguishing  Devlin  v.  Murphy,  »  Douglass  v.  Wells,  18  Hun  (N. 

supra,  under  nearly  the  same  state  Y.)  88  (1879). 

of  facts.     In  Laing  v.  Byrne,  34  N.  *  Hayden  v.  Drury,  3  Fed.  Rep. 

J.  Eq.  (7  Stew.)  52(1881),  the  grantor  782,  789  (1880). 
took  a  reconveyance  of  the  land,  re-  ^  Douglass  v.   Wells,  18  Hun  (N. 

assuming    the    mortgage,    and    the  Y.)  88,  92  (1879).     See  ante  §  326. 
grantee  was  held  thereby  discharged 
from  any  liability. 


284  GEAin'OB   CAN  BELEASE   GEANTEK  [§231. 

the  doctrine  of  subrogation ;  and  contrary  to  the  New  York 
decisions,  it  is  held  that  the  grantor  may  release  his  pur 
chaser  from  his  personal  liability  to  the  mortgagee,  even  after 
the  commencement  of  a  foreclosure,  and  though  the  contract 
be  absolute  and  unconditional.  Thus  where  a  release  of  an 
assumption  was  orally  agreed  upon  before  suit  was  brought 
to  foreclose  the  mortgage,  but  was  not  executed  in  writing 
till  after  suit  was  brought,  but  was  for  a  valuable  consider- 
ation and  without  the  grantor's  knowledge  of  the  suit,  it  was 
held  to  relieve  the  grantee  from  all  liability  to  the  mortgagee.' 
But  where  the  release  was  executed  by  an  insolvent  gran- 
tor without  consideration  and  after  notice  of  foreclosure,  for 
the  sole  and  admitted  purpose  of  defeating  the  mortgagee's 
claim  in  equity  for  a  deficiency,  it  was  held  void.  "This 
act  of  release  or  discharge,  to  be  effectual,  must  be  done 
bona  fide,  and  not  merely  for  the  purpose  of  thwarting  the 
mortgagee  and  depriving  him  of  an  equity  to  which  he  is 
entitled.  Where  a  person  in  consideration  of  a  debt  due 
from  him  agrees  with  his  creditor  that  he  will,  in  discharge 
of  it,  pay  the  amount  to  the  creditor  of  the  latter,  in 
discharge  or  on  account  of  a  debt  due  from  the  latter  to  him, 
though  the  agreement  may  be  bo7ia  fide  rescinded  by  the 
parties  to  it  for  consideration  or  reasons  satisfactory  to 
themselves  and  without  account  or  liability  to  the  creditor, 
who  is  not  a  party  to  it,  yet  if  the  promisee  be  insolvent, 
and  the  rescission  be  merely  a  forgiving  of  the  debt  for  the 
mere  purpose  of  defrauding  the  creditor  of  the  promisee,  or 
protecting  the  promisor  against  his  liability,  the  rescission 
will  not  avail  in  equity."  *  In  another  case,  where  a  mort- 
gagor re-purchased  of  his  grantee,  who  had  assumed  pay- 
ment, he  in  turn  assuming  payment,  the  grantee  of  the 
mortgagor    was    held    discharged    from     all    liability,    for 


«  O'Neill  V.  Clarke,  33  N.  J.  Eq.  Stew.)  290,  297  (1879),  fer  Depue,  J., 

(6  Stew.)  444  (1881).  collating  and  reviewing  the  cases  in  a 

'  Trustees  for  Public  Schools  v.  long   opinion,   and  holding  that  a 

Anderson,  30  N.  J.  Eq.  (3  Stew.)  dona ^  release  by  the  grantor  will 

866,  368  (1879).     See  also  the  same  discharge  the  grantee  from  all  lia- 

caae  reported  on  appeal  sub   nom.  bility  to  the  mortgagee. 
Young  V.  Trustees,  31  N.  J.  Eq.  (4 


§  232.]  ]VIESNE    PURCHASER    LIABLE WHEN. 


285 


the    reason    that    the   mortgage  had   not  become  due  and 
that  the  mortgagee  had  suffered  no  injury.' 

It  is  thus  seen  what  an  important  part  these  two  doctrines 
of  subrogation  and  of  a  contract  for  the  benefit  of  a  third 
person,  have  played  in  the  development  of  the  law  adjudging 
the  rights  of  parties  interested  in  the  contract  of  assumption 
of  a  mortgage.  Even  to-day  there  is  a  lack  of  agreement 
among  the  courts  as  to  which  doctrine  should  prevail  in  the 
interpretation  of  the  contract.  But  the  theory  of  a  benefit 
for  a  third  person  is  the  broadest,  most  equitable  and  most 
susceptible  of  application  to  the  various  cases  that  have 
arisen,  and  it  is  in  growing  favor  with  the  courts. 

§  232.  Intermediate  purchaser,  having  assumed  pay- 
ment of  the  mortgage,  liable. —  It  may  be  stated  as  a 
general  rule,  that  all  intermediate  purchasers  who  have  in 
succession  from  the  original  obligor,  through  mesne  convey- 
ances, assumed  the  payment  of  a  bond  and  mortgage,  are 
personally  liable  as  sureties  for  a  judgment  of  deficiency  in 
an  action  to  foreclose  the  mortgage  brought  by  the  mort- 
gagee or  his  assignee."  No  reason  presents  itself  why,  if 
the  first  purchaser  from  the  mortgagor  is  liable,  the  succeed- 
ing purchasers  from  the  mortgagor's  grantee  should  not  also 
be  held  personally  liable  for  the  mortgage  debt,  either  on 
the  doctrine  of  subrogation  or  of  liability  for  a  contract  made 
for  the  benefit  of  a  third  person.     This  proposition  has  been 


'  Crowell  V.  Currier,  27  N.  J.  Eq.  Young  v.   Trustees  Pub.   Schools, 

(13  C.  E.  Gr.)  152  (1876).     See  Laing  31  N.  J.  Eq.  (4  Stew.)  290  (1879) ; 

V.  Byrne,  34  N.  J.  Eq.  (7  Stew.)  52  Pruden  v.  Williams,  26  K  J.  Eq. 

(1881),  where  nearly  the  same  facts  (11  C.  E,  Gr.)  210(1875) ;  Jarman  v. 

are   stated.     See   also    Crowell   v.  Wiswall,  24  N.  J.  Eq.  (9  C.  E.  Gr.) 

Hospital,  etc.,  27  N.  J.  Eq.  (12  C.  267  (1873),  -per  Chancellor  Runyon, 

E.  Gr.)  650  (1876),  per  Depue,  J.,  collating  the  cases  and  discussing 

■who  at  page  657  quotes  the  language  the  legal  reasons  upon  which  the 

of  Rapallo,  J.,  as  given  above,  calls  practice  rests,  and  stating  that  the 

it  an  oMUr  dictum,  and  rules  con-  decree  should  be  the  same  as  that 

trary  to  it.  directed  in  Luce  v.  Hinds,  Clarke 

«  Cashman  v.  Henry,  75  N.  T.  103  Ch.   (N.   Y.)  453  (1841),  per  Vice- 

(1878) ;  Flagg  v.  Geltmacher,  98  HI.  Chancellor  Whittlesey  ;   Brewer  v. 

293  (1881) ;   Scarry  v.  Eldridge,  63  Maurer,  38  Ohio  St.  543  (1883).    See 

Ind.  44  (1878).     In  point.  Smith  v.  the  following  section. 
Ostermeyer,    68   Ind.    432    (1879); 


286  ASSIGNOR    GUARANTEEING LIABLE.  [§  233. 

squarely  before  a  court  in  New  York  only  once,  when  Vice- 
Chancellor  McCoon/  in  1841,  held  the  contrary,  that  inter- 
mediate purchasers  were  not  liable  ;  but  this  case  is  nowhere 
referred  to  or  cited,  and  from  the  obiter  dicta  in  later  cases' 
it  is  believed  that  it  is  not  good  law,  and  will  be  overruled. 
Furthermore,  it  is  not  consonant  with  the  general  principles 
of  the  law  of  principal  and  surety.  It  is  well  settled  that 
the  successive  assignors  of  a  mortgage,  all  of  whom  have 
guaranteed  its  payment,  are  personally  liable  for  the  mort- 
gage debt  to  the  plaintiff  foreclosing.  By  analogy  the  same 
cases  support  the  proposition  of  this  section.^ 

Intermediate  purchasers,  who  have  not  assumed  the  pay- 
ment of  the  mortgage,  are,  of  course,  not  liable  ;  neither  are 
intermediate  purchasers  liable,  though  they  may  have 
assumed  the  payment  of  the  mortgage,  if  there  is,  prior  to 
their  purchase,  a  break  in  the  line  of  the  several  contracts  of 
assumption  in  the  successive  mesne  conveyances.* 

§  233.  Assignor  of  a  mortgage  guaranteeing  payment 
or  collection  liable. — An  assignor  of  a  mortgage,  who,  in  the 
assignment  or  by  a  separate  instrument,  guarantees  the  pay- 
ment or  collection  of  the  mortgage,  is  personally  liable  to 
his  assignee,  and  may  be  made  a  defendant  to  an  action  for 
foreclosure,  for  the  purpose  of  recovering  against  him  a 
judgment  of  deficiency.*  In  those  states  where  no  provision 
is  made  for  the  recovery  of  a  personal  judgment  in  an  action 


>  Lockwood  V.  Benedict,  3  Edw.  *  Hunt  v.  Purdy,  82  N.  Y.   486 

Ch.  (N.  Y.)  472  (1841).  (1880)  ;  Craig  v.  Parkis,  40  N.  Y. 

s  In  Dunning  v.  Leavitt,  85  N.  Y.  181  (1869) ;    Officer  v.  Burchell,  44 

30  (1881),   intermediate   purcliasers  N.Y.  Supr.  Ct.  (12  J.  «&S.)575(1879); 

who  had  assumed  the  payment  of  a  Jones  v.    Steinbergh,  1  Barb.   Ch. 

mortgage  were  made  parties  in  an  (N.  Y.)  250  (1845) ;  Luce  v.  Hinds, 

action  to  foreclose,  and  a  personal  Clarke    Ch.    (N.    Y.)    453    (1841) ; 

judgment  for  deficiency  demanded  Bristol  v.  Morgan,  3  Edw.  Ch.  (N. 

against    them.     No    objection   was  Y.)  142  (1887) ;  Curtis  v.  Tyler,  9 

raised  by  them,   and  Andrews,  J.,  Paige  Ch.  (N.  Y.)  432  (1842) ;  Leon- 

throughout  his  opinion,   speaks  of  ard  v.  Morris,  9  Paige  Ch.  (N.  Y.) 

them  as  though  they  were  personally  90  (1841);  North  American  Fire  Ins. 

Uable.  Co.  v.  Handy,  2  Sandf.  Ch.  (N.  Y.) 

»  See  the  following  section.  492  (1845) ;  N.  Y.  Code  Civ.  Proc. 

«  Vrooman  v.  Turner,  69  N.  Y.  §1627.  In  Harlem  Sav.  Bk.  v.  Mick- 

280(1877).  elsburgh.  57  How.  (N.  Y.)  Pr.  106 


§  233.] 


ASSIGNOR    GUARANTEELNG — LIABLE. 


287 


to  foreclose  a  mortgage,  such  a  guarantor  can  not,  of  course, 
be  made  a  party  to  the  action  ;  the  only  remedy  against  him 
is  a  separate  action  at  law. 

In  New  York  an  action  at  law  can  also  be  subsequently 
maintained,  but  only  by  consent  of  the  court  in  which  the 
mortgage  was  foreclosed.  In  actions  at  law,  a  distinction  is 
made  between  a  guaranty  oi payment  and  of  collection;^  but 
in  the  equitable  action  of  foreclosure,  if  a  party  is  in  any  way 
liable  for  the  debt,  he  can  be  made  a  defendant.' 

The  decree  of  foreclosure  and  judgment  for  deficiency 
should  specify  in  order  the  respective  liabilities  of  the 
parties  who  have  guaranteed  the  payment  or  collection  of 
the  debt,  or  who  are  otherwise  obligated  for  it  ;^  the  decree 
must  always  contain  conclusions  and  directions  in  harmony 
with  the  general  law  of  principal  and  surety.  Thus,  Vice- 
Chancellor  Whittlesey  in  Luce  v.  Hinds*  made  the  judg- 
ment of  foreclosure  "  for  the  sale  of  the  mortgaged  premises, 


(1878),  the  order  of  liability  between 
guarantors  and  grantors  assuming 
payment  is  considered.  In  point. 
Claflin  V.  Reese,  54  Iowa,  544  (1880); 
also  Jarman  v.  Wiswall,  24  N.  J. 
Eq.  (9  C.  E.  Gr.)  267  (1873).  In 
Robertson  v.  Cauble,  57  Ind.  420 
(1877),  the  indorser  of  a  note  secured 
by  a  mortgage  was  made  a  defendant. 
See  Stark  v.  Fuller,  42  Pa.  St.  320 
(1862).  In  Fluck  v.  Hager,  51  Pa. 
St.  459  (1866),  the  mortgage  came 
back  into  the  hands  of  the  first 
guarantor,  who  foreclosed  ;  he  was 
not  allowed  to  enforce  the  guaranty 
against  the  intermediate  guarantors. 
Under  the  statute  of  1858,  in  Wis- 
consin, a  guarantor  could  not  be 
made  a  defendant  for  the  purpose 
of  recovering  a  personal  judgment 
against  him  ;  Borden  v.  Gilbert.  13 
Wis.  670  (1861).  But  by  chap.  248 
of  the  laws  of  1862,  the  law  was 
changed  so  that  a  personal  judgment 
can  now  be  recovered  ;  Burdick  v. 
Burdick,  20  Wis.  348  (1866). 


'  In  Johnson  v.  Shepard,  35  Mich. 
115  (1876),  it  was  held  that  a  guaran- 
tor of  collection  ought  not  to  be 
made  a  party  defendant  to  a  fore- 
closure suit,  for  the  reason  that  no 
liability  attaches  to  the  guarantor  till 
every  remedy  against  the  principal 
has  been  exhausted.  Such  a  guar- 
antor may  be  made  a  party  under 
the  New  York  rule ;  the  fact  of  a 
primary  and  a  secondary  liability 
must,  however,  be  recognized  and 
provided  for  in  the  decree  ;  Cady 
v.  Sheldon,  38  Barb.  (N.  Y.)  103 
(1862). 

2  N.  Y.  Code  Civ.  Proc.  §  1627. 
See  Vanderbilt  v.  Schreyer,  91  N. 
Y.  392,  396  (1883),  and  the  able 
opinion  per  Ruger,  Ch.  J. ,  reversing 
21  Hun  (N.  Y.)  537  (1880.) 

3  Jones  V.  Steinbergh,  1  Barb.  Ch. 
(N.  Y.)  253  (1845) ;  Luce  v.  Hinds, 
Clarke  Ch.  (N.  Y.)  453,  456  (1841) ; 
Leonard  v.  Morris,  9  Paige  Ch.  (N. 
Y.)  90  (1841). 

*  Clarke  Ch.  (N.  Y.)  457  (1841). 


288  ASSIGNOR  GUARANTEEING  LIABLE.    [§§  234-235. 

and  a  personal  decree  against  the  obligor  (mortgagor)  for 
the  deficiency,  and  in  case  an  execution  against  him  does 
not  realize  the  money,  an  execution  must  afterwards  go 
against  the  guarantor  (assignor)  of  the  mortgage,  for  any 
balance  due  after  sale  of  the  premises,  and  execution  unsatis- 
fied against  the  obligor.'"  The  execution  must  not  issue 
against  the  guarantor  in  any  case,  until  an  execution  against 
the  person  primarily  liable  has  been  returned  unsatisfied. 

§  234.  Intermediate  assignors  of  a  mortgage  guaran- 
teeing payment  liable. — It  is  generally  well  established  that 
the  transfer  of  a  debt  or  obligation  carries  with  it  as  an 
incident  all  securities  for  its  payment.  Thus,  the  assignment 
of  a  bond  and  mortgage  gives  to  the  assignee  the  benefit  of, 
and  the  right  to  sue  upon,  a  guaranty  by  a  previous  assignor 
for  their  collection ;  and  this  proposition  is  sustained, 
although  such  guaranty  may  not  be  in  terms  transferred 
with  the  bond  and  mortgage." 

This  principle  is  in  harmony  with  the  proposition  stated  in 
the  second  preceding  section,  that  an  intermediate  purchaser 
who  has  assumed  the  payment  of  a  mortgage  is  personally 
liable  for  the  mortgage  debt,  providing  his  preceding 
grantors  were  liable.  It  is  suggested  as  a  query,  whether 
the  same  principles  of  law  that  are  applicable  to  intermediate 
purchasers  assuming  the  payment  of  a  mortgage,  are  not  also 
applicable  to  intermediate  assignors  guaranteeing  payment ; 
but  in  the  latter  case  it  is  not  believed  that  an  unbroken  line 
of  guaranties  is  required  in  order  to  hold  liable  those  who 
have  guaranteed  payment. 

§  235.  Assignors  of  a  mortgage,  covenanting  as  to 
title  and  against  defences,  liable. — The  query  is  raised 
here  as  to  whether  a  person,  who  guarantees  that  the  title  to 
a  mortgage  is  perfect  or  that  there  are  no  defences  against  it, 


*  See  also  the  quotation  from  the  *  Craig  v.   Parks,  40  N.  T.   181 

opinion  of  Chancellor  Walworth  in  (1869) ;  Ketchell  v.  Burns,  24  Wend. 

Curtis  V.  Tyler,  9  Paige  Ch.  (N.  Y.)  (N.  Y.)  456  (1840) ;  First  Nat.  Bk. 

435  (1842),  in  the  note  to  g  208  ante;  of  Dubuque  v.  Carpenter,  41  Iowa, 

Jones  V.  Steinbergh,  1  Barb.  Ch.  518  (1875).     See  Fluck  v.  Hager,  51 

(N.  Y.)  253  (1845),  and  the  note  in  Pa.  St.  459  (1866),  where  the  mort- 

§  202  ante.  gage  came  back  into  the  hands  of 


§§  236-237.]        MARRIED    WOAIEJS-    LIABLE.  289 

can  be  made  a  defendant  to  an  action  to  foreclose  the  mort- 
gage, for  the  purpose  of  recovering  a  personal  judgment 
against  him  for  a  breach  of  such  covenant.  He  might  be 
made  a  party,  on  the  theory  that  he  is  interested  in  the 
action  and  that  a  complete  adjudication  can  be  made  only 
by  bringing  him  before  the  court.  On  the  other  hand,  it  can 
scarcely  be  claimed  that  he  "is  liable  to  the  plaintiff  for  the 
payment  of  the  debt  secured  by  the  mortgage."*  In  case  of 
such  a  guaranty  it  would  certainly  be  safe  for  the  plaintiff  to 
omit  the  guarantor  as  a  party  to  the  foreclosure,' and  subse- 
quently, by  leave  of  the  court,  to  commence  an  action  at 
law  against  him  for  a  breach  of  his  covenant.* 

§  236.  All  persons  guaranteeing  payment  or  collection 
of  a  bond  and  mortgage  by  a  separate  instrument  liable. 
— In  the  preceding  sections  it  has  been  seen  that  the  assignor 
of  a  bond  and  mortgage,  who  guarantees  its  payment  in  the 
same  instrument,  is  personally  liable  to  the  assignee  of  the 
mortgage  foreclosing,  for  a  judgment  of  deficiency.  The 
same  rule  and  cases  also  apply  if  the  guaranty  is  made  by  a 
separate  instrument,  executed  by  persons  in  no  way  inter- 
ested in  the  mortgage.*  This  is  based  upon  the  principle  that 
a  creditor  is  entitled  to  the  benefit  of  all  pledges  and  securi- 
ties given  to,  or  in  the  hands  of,  a  surety  of  the  debtor  for  his 
indemnity,  and  the  rule  is  true  whether  the  surety  has  been 
injured  or  not,  as  it  is  a  trust  created  for  the  benefit  of  the 
surety  of  the  debt  and  attaches  to  it.* 

§  237.  Married  women  obligating  themselves  in  any 
of  the  preceding  ways  generally  liable. — A  married  woman 
who  purchases  the  equity  of  redemption  in  mortgaged  prem- 
ises, and  assumes  the  payment  of  the  mortgage  in  the  deed 
of  conveyance,  is  personally  liable  to  the  mortgagee  for  a 


the  first"  guarantor,  who  foreclosed  ;  *  N.  Y.  Code  Civ.  Proc.  §  1638. 

he  was  not  allowed  to  enforce  their  »  Grant  v.  Griswold,  82  N.  T.  569 

guaranties  against  the  intermediate  (1880) ;  Hunt  v.  Purdy,   82  N.    Y. 

guarantors.  486(1880). 

»  N.  Y.  Code  Civ.   Proc.  §  1637.  "  Crow  v.  Vance,  4  Clarke  aowa). 

See  Knickbocker  Ice  Co.  v.  Xelson,  442  (1857),  citing  Curtis  v.  Tyler,  9 

8  Hun  (N.  Y.)  21  (1876).  Paige  Ch.  (N.  Y.)  431  (1843). 


290  MATRRIED    WOMETT    LIABLE.  [§237. 

Judgment  of  deficiency,  if  her  grantor  was  also  personally 
liable,  although  she  may  not  charge  her  separate  estate  with 
the  payment  of  the  mortgage  debt.' 

This  proposition  was  squarely  before  Andrews,  J.,  in 
Cashman  v.  Henry,*  in  1878,  and  after  referring  to  the 
Massachusetts  and  New  Jersey  statutes,  which  are  similar  to 
those  of  New  York,  he  based  his  decision  upon  the  fact  that 
a  "  married  woman  as  incident  to  her  right  to  acquire  real 
and  personal  property  by  purchase,  and  hold  it  to  her 
sole  and  separate  use,  may  purchase  property  upon  credit, 
and  bind  herself  by  an  executory  contract  to  pay  the 
consideration  money,  and  that  her  bond,  note,  or  other 
engagement  given  and  entered  into  to  secure  the  payment 
of  the  purchase  price  of  property  acquired  and  held  for  her 
separate  use,  may  be  enforced  against  her  in  the  same 
manner  and  to  the  same  extent,  as  if  she  were  2,  feme  sole."* 
If  her  grantor  was  not  liable,  she,  of  course,  would  not  be 
liable. 

When  a  married  woman  assigns  a  mortgage  owned  by  her, 
guaranteeing  its  payment  or  collection,  her  liability  will  be 
governed  by  the  general  rules  affecting  married  women's 


'  Cashman  v.   Henry,   75  N.  Y.  shown  that  she  did  not  intend  to 

103  (1878) ;  Vrooman  v.  Turner,  69  assume  the  mortgage  by  accepting 

N.  Y.   280  (1877),  reversing  8  Hun  the  deed. 

(N.  Y.)  78  (1876) ;  Ballin  v.  Dillaye,  «  75  N.  Y.  103,  115,  (1878) ;  8.  C 
i57  N.  Y.  35  (1867);  Flynn  v.  Powers,  55  How.  (N.  Y.)  Pr.  234. 
35  How.  (N.  Y.)  Pr.  279  (1868);  afl'd  » In  Huyler  v.  Atwood,  26  N.  J. 
38  How.  (K  Y.)  Pr.  289  (1868) ;  s.  Eq.  (11  C.  E.  Gr.)  504  (1875),  per 
c.  54  Barb.  (N.  Y)  550  (1868) ;  Bush  Vice-Chancellor  VanFleet,  the  same 
V.  Babbitt,  25  Hun  (N.  Y.)  213  (1881);  question  was  pointedly  before  the 
Scott  V.  Otis,  25  Hun  (N.  Y.)  35  court  and  the  ruling  was  the  same  as 
(1881).  See  Munson  v.  Dyett,  56  in  Cashman  v.  Henry,  75  N.  Y.  103 
How.  (N.  Y.)  Pr.  333  (1878).  In  (1878).  At  page  506  the  Vice-Chan- 
point,  Coolidge  V.  Smith,  129  Mass.  cellor  says :  "  The  law,  in  giving 
554  (1880) ;  also  Brewer  v.  Maurer,  married  women  the  right  to  acquire 
38  Ohio  St.  543  (1883),  citing  the  and  hold  land,  did  not  intend  that 
leading  cases  in  other  states  and  hold-  their  capacity  to  make  contracts  to 
ing  with  the  New  York  decisons.  secure  the  purchase  money  should 
See  Culver  v.  Badger,  29  N.  J.  Eq.  be  so  limited  and  restricted,  that 
(2  Stew.)  74  (1878),  where  a  married  they  could  get  the  land  without 
woman,  to  whom  a  deed  was  exe-  paying  for  it.  Whether  they  se- 
cuted  with  an  assumption  clause,  cured  the  payment  of  the  purchase 
was   held   not    liable  on    its   being  money  by  bond  and  mortgage,  note, 


§  238.]  LIABILITY    OF   DEUEDENt's    ESTATE.  291 

contracts  stated  in  an  early  part  of  this  work.*  Under  the 
act  of  1884  in  New  York,  she  is  now,  of  course,  personally 
liable  upon  all  of  her  contracts,  whatever  their  form  or 
nature.* 

§  238.  Persons  subsequently  liable  in  any  of  preceding 
ways,  deceased,  their  estates  liable — Personal  represen- 
tatives proper  parties;  heirs  and  devisees  not  proper 
parties. — In  a  preceding  section  it  has  been  seen  that  the 
personal  representatives,  and  not  the  heirs  and  devisees  of 
the  deceased  obligor,  are  proper  parties  defendant  to  an  action 
brought  to  foreclose  a  mortgage,  for  the  purpose  of  obtaining 
a  decree  determining  the  amount  of  any  deficiency,  and 
directing  the  same  to  be  paid  by  the  personal  representatives 
in  the  due  administration  of  the  decedent's  estate.*  When 
the  liability  is  incurred  subsequently  to  the  inception  of  the 
bond  and  mortgage  by  a  contract  of  assumption,*  or  by 
guaranteeing  payment  or  collection,  the  rule  is  the  same.* 


or  contract  to  assume  the  payment  »  See  ante  §§  213-216. 

of  a  mortgage,  it  is  a  contract  they  *  Leonard  v.  Morris,  9  Paige  Ch. 

have  a  capacity  to  make,  and  must  (N.  Y.)  90  (1841).     See  ante  %%  213- 

be  enforced."  216. 

'  See  Penn.  Coal  Co.  v.  Blake,  85  «  Scofield  v.    Doscher,  72  N.    Y. 

N.  Y.  226  (1881),  where  a  married  491  (1878) ;  Bache  v.  Doscher,  67  N. 

•woman  expressly  charged  her  sep-  Y.  429  (1876).     See  Mutual  Benefit 

arate  estate.    See  ante  §  211.  Life  Lis.  Co.  v.  Howell,  32  N.  J. 


See  ante  §§  209-211,  and  notes.         Eq.  (5  Stew.)  146  (1880). 


CHAPTER   XII. 


COMMENCEMENT   OF  ACTION. 


239.  How  brought — Requisites  of 

summons. 

240.  Notice  of  object  of  action . 

241.  Notice  of  no  personal  claim. 

242.  Where  some  of  the  defendants 

are  non-residents  or  absen- 
tees. 

243.  Requisites    of    affidavit     to 

secure  order  for  service  of 
summons  by  publicatii/n. 

244.  Change  of  place  of  publication. 

245.  Notice  to  defendants— Proof 

of  publication. 

246.  "Where    there    are  unknown 

owners. 

247.  Service  of  summons  on  mar- 

ried women. 

248.  Service  of  summons  on  infant 

defendants. 

249.  Failure  to  appoint  guardian 

ad  litem. 

250.  Service  on  lunatics  and  in- 

competents. 

251.  Appearance  of  defendant. 

252.  Appearance  by  attorney  with- 

out authority. 

258.  Commencement  of  foreclos- 
ure prevents  action  at  law 
on  bond. 

254.  Action    at  law  on  bond  by 

consent  of  court. 

255.  Tender  after  suit  brought. 

256.  What  claims  may  be  fore- 

closed. 


§  257.  Removed  fixtures. 

258.  Doctrine  of  merger. 

259.  Purchase  of  equity  by  mort- 

gagee from  mortgagor. 

260.  Conveyance  after  assignment 

of  notes. 

261.  Mortgage  on  undivided  inter- 

est in  land. 

262.  Mortgages  on  separate  pieces 

of  properly  for  the    same 
debt. 

263.  Where    mortgagee    has  lien 

on  personal  property  sutfi- 
cient  to  pay  debt. 

264.  Mortgage  with  power  of  sale. 

265.  Breach  of  payment  of  install- 

ment— xVccelerated    matur- 
ity of  debt. 

266.  Failure  to  pay  installment  of 

principal. 

267.  Failure  to  j)ay  installment  of 

interest. 

268.  Equitable  mortgage  to  repay 

pvuchase  money. 

269.  Equitable  mortgage  by    de- 

posit of  title  deeds. 

270.  Agreement  to  execute  mort- 

gage. 

271.  Junior    mortgagee    can    not 

compel  foreclosure  by  sen- 
ior mortgagee. 

272.  Joinder  of  actions. 

273.  Consolidation  of  actions. 


§  239.     How   brought — Requisites    of  summons. — An 

action  to  foreclose  a  mortgage  is  a  civil  action,  and  where  all  the 
parties  are  known  and  reside  within  the  state,  it  is  commenced 
by  the  personal  service  of  a  summons  and  complaint,  or  of  a 
summons  alone,  as  in  ordinary  civil  actions.*     The  surnmons 


'  N.    Y.    Code  Civ.   Proc.    §  416.       T.  632  (1881)  ;  People  v.  Northern 
See  also  IngersoU  v.  Mangam,  84  N.       Pac.  R.  R.  Co.,  50  N.  Y.  Supr.  Ct. 

2Sti 


§  239.] 


REQUISITES    OF   SUMMONS. 


293 


must  contain  the  title  of  the  action,  specifying  the  court  in 
which  the  action  is  brought/  the  names  of  the  parties  to  the 
action,*  and,  if  it  is  brought  in  the  supreme  court,  the  name 
of  the  county  in  which  the  plaintiff  desires  the  trial.'  It 
must  be  subscribed  by  the  plaintiff's  attorney,*  who  is 
required  to  add  to  his  signature  his  office  address,  specifying 
a  place  within  the  state  where  there  is  a  post-office,  and  if 
in  a  city,  he  must  add  the  street,  and  street  number,  if  any, 
or  other  suitable  designation  of  the  particular  locality  of  his 
office.* 

It  should  require  the  defendant  to  answer  the  complaint; 
and  to  serve  a  copy  of  his  answer  on  the  person  whose 
name  is  subscribed  to  the  summons  at  the  place  within 
the  state  thereon  specified,  within  twenty  days  after  the 
service  of  the  summons,  exclusive  of  the  day  of  service.* 


(18  J.  &  S.)  456  (1884) ;  Putnam  Co. 
Chem.  Works  v,  Jochen,  8  N.  Y. 
Civ.  Proc.  Rep.  424  (1886);  Daris 
V.  Jones,  8  N.  Y.  Civ.  Proc.  Rep. 
43  (1883) ;  Acker  v.  Hauteman,  63 
How.  (N.  Y.)  Pr.  280  (1882) ;  s.  c. 
27  Hun  (N.  Y.)  48  (1882)  ;  Kelly 
V.  Countryman,  15  Hun  (N.  Y.)  97 
(1878) ;  McCarthy  v.  McCarthy,  13 
Hun  (N.  Y.)  579  (1878). 

'  Croden  v.  Drew,  3  Duer  (N.  Y.) 
652  (1854) ;  Webb  v.  Mott,  6  How. 
(N.  Y.)  Pr.  439  (1852) ;  James  v. 
Kirkpatrick,  5  How.  (N.  Y.)  Pr.  241 
(1851) ;  Dix  v.  Palmer,  5  How.  (N. 
Y.)  Pr.  233  (1851) ;  Walker  v.  Hub- 
bard, 4  How.  (N.  Y.)  Pr.  154  (1849). 

2  Bank  v.  Magee,  20  N.  Y.  355 
(1859) ;  Traver  v.  Eigth  Ave.  R.  R. 
Co.,  6  Abb.  (N.  Y.)  Pr.  N.  S.  46 
(1867) ;  Cooper  v.  Burr,  45  Barb.  (N. 
Y.)  10  (18G5) ;  Miller  v.  Stettiner,  7 
Bosw.  (N.  Y.)  692  (1862) ;  Hill  v. 
Thacter,  3  How.  (N.  Y.)  Pr.  407 
(1848);  Eaglfcston  v.  Son,  5  Robt.  (N. 
Y.)  640  (1866). 

*  Hotchkiss  v.  Crocker,  15  How. 
(N.  Y.)  Pr.  336  (185^) ;  Davison  v. 
Powell,  13  How.  (N.  Y.)  Pr.  288 


(1856) ;  Merrill  v.  Grinnell,  10  How. 
(N.  Y.)  Pr.  31  (1854). 

*  Mutual  Life  Ins.  Co.  v.  Ross,  10 
Abb.  (N.  Y.)  Pr.  260  (1860),  note. 
Weir  V.  Slocum,  3  How.  (N.  Y.)  Pr. 
397  (1857);  Johnston  v.  Winter,  (N. 
Y.  Com.  PI.)  7  Alb.  L.  J.  135 
(1872).  See  also  N.  Y.  Code  Civ. 
Proc.  §§  55,  417. 

*  Supreme  Court  Rules  1,  10  ;  De- 
melt  v.  Leonard.  19  How.  (N.  Y.)  Pr. 
182  (1860) ;  Yorks  v.  Peck,  17  How. 
(N.  Y.)  Pr.  192  (1859) ;  Hurd  v. 
Davis,  13  How.  (N.Y.)  Pr.  57  (1856). 
See  also  German  American  Bank 
V.  Champlin,  11  N.  Y.  Civ.  Proc. 
Rep.  452  (1887);  Wadsworth  v. 
Georger,  18  Abb.  (N.  Y.)  N.  C.  199 
(1887)  ;  Mayor  of  N.  Y.  v.  Eisler,  10 
Daly  (N.  Y.)  396  (1882) ;  Wiggins  v. 
Richmond.  58  How.  (N.  Y.)  Pr.  376 
(1879);  Osborn  v.  McCloskey,  55 
How.  (N.  Y.)  Pr.  345  (1878) ;  Weil 
v.  Martin,  24  Hun  (N.  Y.)  645 
(1881);  Wallace  v.  Dimmick,  24 
Hun  (N.  Y.)  635  (1881). 

«N.  Y.  Code  Civ.  Proc.  §§417, 
418. 


294  NOTICE  OF  OBJECT  OF  ACTION.    [§§  240-241. 

The  summons  should  also  contain  a  notice  to  the  defendant 
to  the  effect,  that  in  case  he  fails  to  answer  the  complaint 
within  the  time  specified  for  the  service  of  the  answer,  the 
plaintiff  will  apply  to  the  court  for  judgment  on  default  and 
for  the  relief  demanded  in  the  complaint.  In  New  York  the 
exact  form  of  the  summons  is  prescribed  by  the  Code.' 

§  240.  Notice  of  object  of  action. — When  the  summons 
is  served  without  the  complaint,  it  is  usually  accompanied 
by  a  notice  of  the  object  of  the  action.  The  form  and 
contents  of  this  notice  are  prescribed  by  the  code,  which 
provides  that  "where  a  personal  claim  is  not  made  against 
a  defendant,  a  notice,  subscribed  by  the  plaintiff's  attorney, 
setting  forth  the  general  object  of  the  action,  a  brief  descrip- 
tion of  the  property  affected  by  it,  if  it  affects  specific  real  or 
personal  property,  and  that  a  personal  claim  is  not  made 
against  him,  may  be  served  with  the  summons.  If  the 
defendant  so  served,  unreasonably  defends  the  action,  costs 
may  be  awarded  agamst  him."*  Where  such  a  notice  is 
served  with  the  summons,  the  complaint  need  not  be  served 
upon  the  defendant,  unless  he  demands  a  copy  of  the  same 
in  writing  within  the  time  for  answering. 

§  241.  Notice  of  no  personal  claim. — The  notice  served 
upon  the  defendant  should  describe  correctly  the  object 
of  the  action ;  if  it  ooes  not  do  so,  and  the  defendant  is 
misled,  the  judgment  will  be  irregular  as  against  such 
defendant,  and  may  be  set  aside  on  motion.  The  object  of 
the  notice  in  mortgage  foreclosures  is  to  relieve  the  com- 
plainant of  the  expense  of  unnecessary  disclaimers  by 
defendants,  who  are  made  parties  to  the  suit  solely  for  the 
purpose  of  extinguishing  their  claims  and  of  perfecting 
the  title,  and  against  whom  no  personal  judgment  for  defi- 
ciency is  sought.*  But  it  has  been  said  that  even  where  a 
defendant  has  not  been  served  with  a  notice  as  permitted 


'  N.  T.  Code  Civ.  Proc.  §  418.  (1857) ;  Gallagher  v.  Egan,  2  Sandf. 

«  N.    Y.    Code   Civ.    Proc.    §  423.  (N.  Y.)  742  (rSoO). 

See   O'Hara   v.    Brophy,    24    How.  ^  Jay  v.  Ensign,  9  Paige  Ch.  (N. 

(N.  Y.)  Pr.  379  (1863)  ;  Benedict  v.  Y.)  330  (1841). 
Warriner,  14  How.  (N.  Y.)  Pr.  0C8 


§  242.]  SERVICE   BY   PUBLICATION.  295 

by  the  code/  and  he  unreasonably  defends,  the  court  may- 
award  costs  against  him  for  making  such  defense.'  The 
question  of  costs,  as  affected  by  the  service  of  such  notice, 
will  be  fully  considered  hereafter  in  the  chapter  on  costs. 

§  242.  Where  some  of  the  defendants  are  non-resi- 
dents or  absentees. — In  an  action  to  foreclose  a  mortgage, 
"  where  a  defendant  to  be  served  is  a  foreign  corporation ; 
or,  being  a  natural  person,  is  not  a  resident  of  the  state ;  or 
where,  after  diligent  inquiry,  the  defendant  remains  un- 
known to  the  plaintiff,  or  the  plaintiff  is  unable  to  ascertain 
whether  the  defendant  is  or  is  not  a  resident  of  the  state  ;* 
or  where  the  defendant,  being  a  resident  of  the  state,  has 
departed  therefrom,  with  intent  to  defraud  his  creditors,  or  to 
avoid  the  service  of  a  summons ;  or  keeps  himself  concealed 
therein,  with  like  intent,"*  such  defendant  may  be  brought 
within  the  jurisdiction  of  the  court  by  service  of  the  sum- 
mons upon  him  by  publication,  or  personally  without  the 
state,  in  the  same  manner  as  in  other  actions,  as  directed 
in  the  Code.* 

Service  of  the  summons  upon  such  a  defendant  may  be 
made  in  New  York  by  the  publication  thereof  in  two  news- 
papers, designated  in  the  order  directing  such  service,  for  a 
specified  time,  not  less  than  once  a  week  for  six  successive 
weeks  ;  or,  at  the  option  of  the  plaintiff,  by  service  of  the 
summons,  and  of  a  copy  of  the  complaint  and  order,  without 
the  state,  upon  the  defendant  personally,  if  he  is  of  full  age, 
or  an  infant  of  the  age  of  fourteen  years  or  upwards  ;  or,  if 
the  defendant  is  a  corporation,  upon  an  officer  thereof.  On 
or  before  the  day  of  the  first  publication,  the  plaintiff  must 


>  N.   Y.   Code  Civ.   Proc.   §  423.  Barb.  (N.  Y.)  421  (1872) ;  CoUins  v. 

»  O'Hara  v.  Brophy,  24  How.  (N.  Ryan,  32  Barb.  (N.  Y.)  647  (1860) ; 

Y.)  Pr.  379  (1863).  Towsley  v.  McDonald,  32  Barb.  (N. 

»  Wortman  v.  Wortman,  17  Abb.  Y.)  604  (1860) ;  Bixby  v.  Smith,  49 

(N.  Y.)  Pr.    66  (1863) ;  Lefferts  v.  How.  (N.  Y.)  Pr.  50  (1875) ;  s.  c.  5 

Harris,  10  Abb.  (N.  Y.)  Pr.  K  S.  2  T.  &.  C.  (N.  Y.)  279 ;  3  Hun  (N. 

(1866),  note  ;  Hulbert  v.  Mutual  Ins.  Y.)  60  ;  Rocbe  v.  Ward,  7  How.  (N. 

Co.,  4  How.  (N.  Y.)  Pr.  278  (1850).  Y.)  Pr.   416  (1853) ;  VonRhade  v. 

*  N.  Y.  Code  Ciy.  Proc.  §  438.  VonRhade,  2  T.  &  C.   (N.  Y.)  491 

»Easlerbrook  v,  Easterbrook,  64  (1874). 


296  AFFIDAVIT  FOE  SERVICE  BY  PUBLICATION.     [§243. 

deposit  in  a  specified  post-office  copies  of  the  summons, 
complaint  and  order,  contained  in  a  securely  closed  post-paid 
wrapper,  directed  to  the  defendant  at  a  place  specified  in 
the  order.' 

§  243.  Requisites  of  afifidavit  to  secure  order  for  ser- 
vice of  summons  by  publication. — In  order  to  obtain  an 
order  for  the  service  of  the  summons  on  a  defendant  absent 
from  the  state,  the  plaintiff  must  show  by  af^davit  the  defen- 
dant's absence  and  due  diligence  in  seeking  to  obtain  personal 
service  upon  him,  on  which  proof  alone  can  be  based  an  order 
for  the  publication  of  the  summons  in  an  action  for  foreclosure. 
The  afifidavit  should  be  based  upon  the  applicant's  own  knowl- 
edge, and  not  upon  his  information  and  belief.*  Proof  may 
also  be  made  by  the  affidavits  of  other  parties.  A  fore- 
closure will  be  invalid,  where  it  is  based  upon  an  order 
of  publication,  which  is  made  upon  the  complainant's 
affidavit  that  the  defendant  could  not  be  found,  where 
the  summons  was  returned  before  the  return  day  as  not 
personally  served/ 

The  affidavit  for  service  of  the  summons  by  publication, 
should  be  made  by  the  plaintiff  himself ;  but  if  made  by  his 
attorney,  it  should  state  why  it  is  not  made  by  the  plaintiff, 
and  the  sources  from  which  the  attorney  derived  his  infor- 
mation of  the  facts  set  forth  in  the  affidavit.*  After  an 
order  of  publication,  which  has  an  erroneous  caption,  has 
been  acted  on,  it  may  properly  be  amended  by  an  order  of 
the  court,  striking  out  the  erroneous  caption  and  inserting  the 
correct  one.' 


'  N.  T.  Code  Civ.  Proc.  §  440.  quired,  where   the  affidavit  for  the 

*  Carleton  v.  Carleton,   85  N.    Y.  order    of    publication  is  sufficient, 

313  (1881) ;  Belmont  v.  Cornen,  83  though  contrary  to  the  facts,  quaere; 

N.  Y.  250(1880);  Howe  Mach.  Co.v.  Whitford  v.   Crooks,   50   Mich.   40 

Pettibone,  74  N.  Y.  68  (1878)  ;  s.  c.  (1883). 

12    Hun    (N.    Y.)    657  ;     Soule  v.  ■*  Piser  v.  Lockwood,    30  Hun  (N. 

Hough,  45  Mich.  418  (1881).  But  see  Y.)  6  (1883). 

Smith  v.  Mahon,  27  Hun  (N.  Y.)  40  ^  Mojarrieta  v.   Saenz,    80  N.  Y. 

(1882).  553  (1880)  ;  Phinney    v.    Broschell, 

»  Soule  V.  Hough,  45  Mich.   418  80  N.  Y.  544  (1880)  ;  Coffin  v.  Less- 

(1881).      Whether  jurisdiction  of  a  tor,  36  Hun  (N.  Y.)  347  (1885). 

foreclosure    proceeding    is    not   ac- 


§§244-245.]       PEOOF  of  publication.  297 

§  244.  Change  of  place  of  publication. — While  the 
statute,  authorizing  the  service  of  a  summons  by  pubHcation, 
does  not  authorize  such  publication  to  be  commenced  in  one 
newspaper  and  to  be  finished  in  another ;  yet  in  a  recent 
case  such  service  was  held  not  to  be  affected  by  the  fact 
that  during  the  time  which  the  notice  was  being  published, 
the  name  of  the  paper  was  changed.'  The  place  of  publica- 
tion was  not  changed  from  one  town  to  another  in  the  same 
jurisdiction  f  though  the  paper  was  merged  in  another  and 
its  name  and  place  of  publication  were  changed,  the  identity 
of  the  paper  and  the  territory  of  its  circulation  remained  the 
same.' 

§  245.     Notice  to  defendants— Proof  of  publication. — 

It  is  required  in  New  York  that  there  be  subjoined  to  the 
summons,  which  is  published,  a  notice  to  the  defendant,  to 
the  effect  that  the  summons  is  served  upon  him  by  publi- 
cation pursuant  to  an  order  of  the  judge,  specifying  his 
name  and  official  title  and  the  date  of  the  order  directing  the 
publication.  The  summons,  complaint,  order  and  papers 
upon  which  it  w^as  granted,  must  be  filed  with  the  clerk  of 
the  court  on  or  before  the  day  of  the  first  publication.* 
Proof  of  the  service  of  the  summons  by  publication  should 
be  made  in  the  form  prescribed  by  the  statute  authorizing 
the  same  ;  but  where  the  statute  does  not  assume  to  fix  the 
exclusive  mode  of  proof,  proof  made  in  a  form  other  than 
that  prescribed  by  the  statute  will  be  sufificient  to  pass  title 
to  the  purchaser  at  a  sale  thereunder.*  In  New  York  proof 
of  the  publication  of  the  summons  and  notice  must  be 
made  by  the  afifidavit  of  the  printer  or  publisher,  or  his  fore- 
man or  principal  clerk.  Proof  of  deposit  in  the  post-ofifice, 
or  of  delivery,  of  a  paper  required  to  be  deposited  or 
delivered  by  the  provisions  of  the  Code,  must  be  made  by 
the  affidavit  of  the  person  who  deposited  or  delivered  it.* 


»  Perkins  v.  Keller,  43  Mich.  53  99  U.  S.  (9  Otto),  334  (1878) ;  bk.  25 

(1880).  L.  ed.  394. 

2  Perkins  v.  Keller,  43  Mich.   53  *  N.  Y.  Code  Civ.  Proc.  §  442. 

(1880).  »  Brown  v.  Phillips,  40  Mich.  264 

*  Perkins  v.  Keller,  43  Mich.  53  (1879). 

(1880) ;  Sage  v.  Central  R.  R.  Co.,  «  N.  Y.  Code  Civ.  Proc.  §  444. 


298  SERTIOE  ON  MARRIED  WOMEN.     [§§  246-247. 

§246.  Where  there  are  unknown  owners.  —  Where 
there  are  defendants  unknown  to  the  plaintiff,  having  a  Hen 
upon  or  an  interest  in  the  mortgaged  premises,  whose  resi- 
dence is  unknown  and  can  not  with  reasonable  diligence  be 
ascertained,  they  may  be  served  by  publication  of  the  sum- 
mons in  two  newspapers  published  in  the  county  where  the 
premises  are  situated.'  Where  in  an  action  of  foreclosure 
unknown  owners  are  made  parties  defendant,  as  author- 
ized by  the  New  York  Code  of  Civil  Procedure,'  and  are 
properly  described  in  the  summons,  the  addition  of  the 
words  "if  any"  will  not  invalidate  the  process.' 

Where  service  of  the  summons  has  been  made  upon 
unknown  heirs  by  publication,  as  prescribed  by  the  Code,  it 
will  bar  all  the  parties  in  interest,  although  it  may  subse- 
quently appear  that  one  of  the  unknown  parties  was  an 
infant.* 

§  247.  Service  of  summons  on  married  women. — The 
wife  of  the  mortgagor  of  land,  whether  she  joins  in  the 
execution  of  the  mortgage  or  not,  has  an  inchoate  right  of 
dower  in  the  equity  of  redemption,  which  will  not  be  affected 
by  a  foreclosure  to  which  she  is  not  made  a  defendant.'  The 
service  of  the  summons  upon  the  husband  in  a  foreclosure, 
was  formerly  held  to  be  sufficient  service  upon  the  wife  also, 
unless  the  action  was  against  her  separate  estate,  in  which  case 
service  was  required  to  be  made  upon  her  individually.*  At 
common-law  the  husband  was  authorized  and  required  to 
enter  a  joint  appearance  for  himself   and   his   wife    upon 


«  N.  T.  Code  Civ.  Proc.  |  438.  rop,  53  Barb.  (N.  T.)  183  (1869) ; 

»SeeN.  Y,  Code  Civ.  Proc.§§  438,  Watson  v.  Church,  3  Hun  (N.  Y.) 

451.  80  (1874) ;   8.  c.  5  T.  &  C.  (N.  Y.) 

»  Abbott  V.  Curran,  98  N.  Y.  665  243  (1875) ;    Ferguson  v.  Smith.  3 

(1885).  Johns.  Ch.  (N.  Y.)  139  (1816) ;  Lath- 

*  Wheeler  v.  Scully,  50  N.  Y.  667  rop  v.  Heacock,  4  Laus.  (N.  Y.)  1 
(1872).  (1871).     An  inchoate  right  of  dower 

*  Mills  V.  VanVoorhia,  10  Abb.  is  an  interest,  which  results  from 
(N.  Y.)  Pr.  153  (1859) ;  affi'd  20  N.  the  marital  relation  and  does  not 
y.  412.     See  ante  %%  135,  136.  belong  to  the  wife  as  her  separate 

*  See  Nagle  v.  Taggart,  4  Abb.  (N.  estate  ;  Eckerson  v.  VoUraer,  11 
Y.)  ^.  C.  144  (1877) ;  Foote  v.  Lath-  How.  (N.  Y.)  Pr.  42  (1855). 


§  247.] 


SERVICE    OK    MARRIED    WOMEN. 


209 


service  of  the  summons  upon  him  alone,  if  the  action 
concerned  his  property,*  but  the  present  Code  of  Civil  Proced- 
ure' provides  that  in  an  action  or  special  proceeding,  a  mar- 
ried woman  shall  appear,  prosecute,  or  defend,  alone,  or  joined 
with  other  parties,  as  if  she  were  single ;  and  it  shall  not  be 
necessary  or  proper  to  join  her  husband  with  her  as  a  party 
in  any  action  or  special  proceeding  affecting  her  separate 
property.'  It  has  been  held  under  this  provision  of  the  Code 
that  in  an  action  to  foreclose  a  mortgage  upon  real  property, 
the  wife  of  the  owner  of  the  equity  of  redemption  may 
appear  and  defend  by  her  own  attorney,  although  her  hus- 
band appears  and  defends  by  another  attorney.* 


>  "Watson  V.  Church,  3  Hun  (N. 
Y.)  80  (1874) ;  Lathrop  v.  Heacock, 
4  Lans.  (N.  Y.)  1  (1871) ;  Leavitt  v. 
Cruger,  1  Paige  Ch.  (N.  Y.)  431 
(1829).     See  ante  %%  137,  138. 

»  N.  Y.  Code  Civ.  Proc.  §  450. 

'  Reynolds  v.  Robinson,  64  N.  Y. 
589  (1876) ;  Scott  v.  Conway,  58  N. 
Y.  619  (1874)  ;  Wright  v.  Wright, 
54  N.  Y.  437  (1873),  aff'g  59  Barb. 
(N.  Y.)  505  (1871) ;  Simar  v.  Cana- 
day,  53  N.  Y.  298  (1873) ;  Stone- 
man  V.  Erie  R.  R.  Co.,  52  N.  Y. 
429  (1873) ;  Hincliley  v.  Smith,  51 
N.  Y.  21  (1872) ;  Filer  v.  New  York 
Cent.  R.  R.  Co.,  49  N.  Y.  47(1872) ; 
Moore  v.  Moore,  47  N.  Y.  407  (1872); 
Rowe  V.  Smith,  45  N.  Y.  230(1871); 
HoflEman  V.  Tread  well.  39  N.Y.  Supr. 
Ct.  (7  J.  &  S.)  183  (1875) ;  Cham- 
bovet  V.  Cagney,  35  N.  Y.  Supr.  Ct. 
(3  J.  &.  S.)  474  (1873) ;  Osborn  v. 
Nelson,  59  Barb.  (N.  Y.)  375  (1871) ; 
Kamp  V.  Kamp,  46  How.  (N.  Y.)  Pr. 
143  (1873);  Broome  v.  Taylor,  9  Hun 
(N.  Y.)  155  (1876);  Spencer  v. 
Humiston,  9  Hun  (N.  Y.)  71  (1876); 
Adams  v.  Curtis,  4  Lans.  (N.  Y.)  164 
(1870) ;  Beau  v.  Kiah,  6  T.  &  C.  (:N. 
Y.)  464  (1875) ;  8.  c.  4  Hun  (N.  Y.) 
171  ;  Freeman  v.  Barber,  3  T.  &  (J. 
(N.  Y.)  574  (1874) ;  s.  c.  1  Hun  (N. 


T.)  433.  See  also  Draper  v.  Stou- 
venel,  35  N.  Y.  507  (1866) ;  Ackley 
V.  Tarbox,  31  N.  Y.  564  (1864); 
Palmer  v.  Davis,  28  N.  Y.  242 
(1863) ;  Darby  v.  Callaghan,  16  N. 
Y.  71  (1857)  ;  Morrell  v.  Cawley,  17 
Abb.  (N.  Y.)  Pr.  76  (1863) ;  Harley 
V.  Ritter,  9  Abb.  (N.  Y.)  Pr.  400 
(1859) ;  Gillies  v.  Lent,  2  Abb.  (N. 
Y.)  Pr.  N.  S.  455  (1865) ;  Rawson  v. 
Penn.  R.  R.,  2  Abb.  (N.  Y.)  Pr.  N.  S. 
220  (1867);  Foster  v.  Conger,  61 
Barb.  (N.  Y.)  145  (1871) ;  Ball  v. 
Bullard,  52  Barb.  (N.  Y.)  141  (1868); 
Badgley  v.  Decker,  44  Barb.  (N.  Y.) 
577  (1865) ;  Barton  v.  Beer,  35  Barb. 
(N.  Y.)  81  (1861);  Mann  v.  Marsh, 
35  Barb.  (N.  Y.)  68  (1861);  Merchants' 
Ins.  Co.  v.  Hinman,  34  Barb. 
(N.  Y.)  410  (1861);  Newbery  v.  Gar- 
land, 31  Barb.  (N.  Y.)  121  (1860) ; 
Spies  V.  Acces.  Trans.  Co.  5  Duer 
(N.  Y.)  662  (1856) ;  Rowe  v.  Smith, 
88  How.  (N.  Y.)  Pr.  37  (1869) ;  Mann 
▼.  Marsh,  21  How.  (N.  Y.)  Pr.  373 
(1861) ;  Barton  v.  Beer,  21  How.  (N. 
Y.)  Pr.  309  (1861) ;  Francis  v.  Ross, 
17  How.  (N.  Y.;  Pr.  561  (1859). 

♦  Janjnski  v.  Heidelberg,  21  Hun 
(N.  Y .)  439  (1880).  tjee  ante  §§  137, 
138. 


300  SERVICE    ON    INFANT   DEFENDANTS.  [§  248. 

§  248.     Service  of  summons  on  infant   defendants. — 

Where  infants  are  made  parties  or  are  necessary  defendants 
in  an  action  to  foreclose  a  mortgage,  they  must  be  served  with 
the  summons  ;  and  until  service  is  made  the  court  will  have  no 
jurisdiction  of  them  and  the  appointment  of  a  guardian  ad 
litem  will  be  void.'  The  court  will  not  acquire  jurisdiction  of 
such  infants  where,  after  the  trial,  they  petition  to  intervene 
and  have  a  guardian  ad  litem  appointed,  and  thereafter  file 
an  answer  by  a  guardian  appointed  upon  such  petition.*  In 
a  case  where  substituted  service  had  been  defectively  made 
upon  infants,  but  was  confirmed  by  a  subsequent  order  of 
the  court,  and  later  personal  service  was  also  made  upon 
them  for  the  purpose  of  removing  any  possible  grounds  of 
alleged  irregularity  in  the  service  of  the  summons,  the  judg- 
ment and  the  sale  under  the  decree  were  held  to  be  valid 
and  binding,  it  appearing  that  the  action  was  still  pending 
at  the  time  of  the  personal  service. 

Under  the  provisions  of  the  New  York  Code  of  Civil 
Procedure,*  where  the  defendant  is  an  infant  under  the  age  of 
fourteen  years,  service  must  be  made  by  delivering  a  copy 
of  the  summons  within  the  state  to  the  infant  in  person,  and 
also  to  his  father,  mother  or  guardian ;  or,  if  there  is  none 
within  the  state,  to  the  person  having  the  care  and  control 
of  such  infant,  or  with  whom  he  resides,  or  in  whobC  service 
he  is  employed.  Service  on  the  infant  alone  or  on  the 
father,  mother,  guardian,  or  other  person  mentioned  alone, 
does  not  constitute  a  personal  service  within  the  meaning  of 
the  statute.  Service  must  be  made  upon  both  to  meet  its 
requirements.* 

An  infant  defendant  is  required  to  appear  and  defend  by  a 
guardian,*  but  a  guardian  ad  litetn  can  be  regularly  appointed 
only  after  such  a  defendant  has  been  served  with  the  summons 


'  Johnston  v.  San  Francisco  Sav-  '  N.    Y.    Code  Civ.  Proc.   §§  471, 

ings  Union,  63  Cal.  554  (1883).  473.     See  also  Buermann  v.  Buer- 

^  Johnson  v.  San  Francisco  Sav-  niann,  9  N.  Y.  Civ.  Proc.  Rep.  146 

ings  Union,  63  Cal.  554  (1883).  (1886) ;  s.  c.  17  Abb.  (N.  Y.)  N.  C. 

3  N.  Y.  Code  Civ.  Proc.  §  426.  391  ;  Mace  v.  Scott,  17  Abb.  (N.  Y.) 

*  Ingcrsoll   v.  Mangam,  84  N.   Y.  N.  C.  100  (1885);    Freund  v.  Wash- 

622  (1881),  affg  24  Hun  (N.  Y.)  202.  burn,  17  Hun  (N.  Y.)  543  (1879). 


§  249.]  APPOmXING    GUAKDIAN    AD    LITEM.  301 

personally  or  by  the  substituted  mode  prescribed  by  the 
Code.*  Such  guardian  must  be  appointed  upon  the  applica- 
tion of  the  infant,  if  he  is  of  the  age  of  fourteen  years  or 
upwards  and  applies  within  twenty  days  after  service  of  the 
summons;  if  he  is  under  that  age  or  neglects  so  to  apply, 
upon  the  application  of  any  other  party  to  the  action,  or 
upon  the  application  of  his  general  or  testamentary  guardian, 
if  he  has  one,  or  of  a  relative  or  friend,  with  notice  thereof 
to  his  general  or  testamentary  guardian,  if  he  has  one  within 
the  state,  or  if  he  has  none,  to  the  person  with  whom  the 
infant  resides."  Where  an  infant  defendant  resides  within 
the  state,  and  is  temporarily  absent  therefrom,  the  court  may 
in  its  discretion  make  an  order  designating  a  person  to  act 
as  guardian  ad  litem,  unless  he  or  some  one  in  his  behalf, 
procures  such  a  guardian  to  be  appointed,  as  prescribed  in 
the  Code,'  within  a  specified  time  after  service  of  a  copy  of  the 
order.*  In  case  an  appearance  is  made  by  a  person  appointed 
guardian  ad  litem  for  an  infant  under  fourteen  years  of 
age  who  has  not  been  served  with  the  summons,  the  judg- 
ment rendered  in  the  action  will  not  be  binding  upon  such 
infant.* 

Where  suit  is  brought  to  foreclose  a  mortgage  against  an 
infant  who  resides  in  another  state  with  his  mother,  a  widow, 
it  will  not  be  presumed  that  such  infant  has  a  guardian  resid- 
ing in  the  state  where  suit  is  brought,  and  service  by 
publication  may  be  had  on  fihng  an  affidavit  stating  that  he 
and  his  mother  are  non-residents  and  that  personal  service 
of  the  summons  can  not  be  made  upon  him  in  the  state 
where  the  action  is  brought.' 

§  249.  Failure  to  appoint  guardian  ad  litem. — Where 
an  infant  defendant  has  been  properly  served  with  process, 
the  omission  of  the  court  to  appoint  a  guardian  ad  litem  for 


'  Ingersoll  v.  Mangam,   84  N.  Y.  N.  C.  100  (1885)  ;  N.  Y.  Code  Civ, 

622  (1881),  aff'g  24  Hun  (N.  Y.)  203.  Proc.  §  473. 

2  K  Y.    Code  Civ.    Proc.  §  471.  « Ingersoll  v.  Mangam,   84  N.  Y. 
See  also  the  cases  cited  supra.  622  (1881),  aff'g  24  Hun  (N.  Y.)  203. 

3  N.  Y.  Code  Civ.  Proc.  §g  471,  «  Davis  v.   Huston,   15  Neb.    28 
473.  (1883). 

*  Mace  V.  Scott,  17  Abb.  (N.  Y.) 


302  SERVICE   ON    LUNATICS.  [§250. 

him  will  not  render  the  judgment  void,  but  only  voidable; 
it  can  be  avoided,  ho^^ever,  by  no  one  except  the  infant  or 
his  privies  in  blood.'  In  such  a  case  where  judgment  is 
obtained  by  fraud  or  collusion,  an  action  may  be  maintained 
by  the  infant  to  set  it  aside.'  The  record  of  the  judgment, 
however,  is  prima  facie  evidence  of  the  jurisdiction  of  the 
court,  and  will  be  held  conclusive  until  clearly  and  explicitly 
disproved  ;  the  recitals  in  the  judgment  may  be  used  to 
establish  the  jurisdiction  of  the  court.* 

§  250.  Service  on  lunatics  and  incompetents. — In  those 
cases  where  the  court  has  reasonable  ground  to  believe  that 
the  defendant,  by  reason  of  habitual  drunkenness,  or  for  any 
other  cause,  is  mentally  incapable  adequately  to  protect  his 
rights,  although  not  judicially  declared  to  be  incompetent  to 
manage  his  affairs,  it  may,  in  its  discretion,  with  or  without 
an  application  therefor,  make  an  order  requiring  a  copy  of 
the  summons  to  be  delivered  also  to  a  person  whom  it  may 
designate  in  the  order;  in  which  case  service  of  the  summons 
will  not  be  complete  until  it  is  so  delivered.*  But  where  the 
defendant  has  been  judicially  declared  to  be  incompetent  to 
manage  his  affairs  in  consequence  of  lunacy,  and  it  appears 
satisfactorily  to  the  court  by  afifidavit,  that  the  delivery  of  a 
copy  of  the  summons  to  him  in  person,  will  tend  to  aggra- 
vate his  disorder,  or  to  lessen  the  probability  of  his  recovery, 
the  court  may  make  an  order,  dispensing  with  such  delivery, 
in  which  case  the  delivery  of  a  copy  of  the  summons  to  a 
committee  duly  appointed  for  him  will  be  sufficient  personal 
service  upon  the  defendant.* 


'  McMurray  v.  McMurray,  66  N.  •  IngersoU  v.  Mangam,  84  N.  T. 

Y.  175  (1876) ;  Croghan  v.  Living-  622  (1881),  aff'g  24  Hun.   (N.  Y.) 

Eton,  17  N.  Y.  218  (1858) ;  Bloom  v.  202 ;  Bosworth  v.  Vandewalker,  53 

Burdick,   1  Hill  (N.  Y.)  130,   143  K  Y.  597  (1873). 

(1841) ;      Austin     v.    Trustees    of  *■  N.  Y.   Code  Civ.  Proc.  §  427. 

Charleston    Female    Seminary,    49  See  Moulton  v,  Moulton,  47Hun  (N. 

Mass.  (8  Mete.)  196  (1844) ;  s.  c.  41  Y.)  606  (1888) ;  8.  0.  17  N.  Y.  St. 

Am.  Dec.  497 ;  Barber  v.  Graves,  18  Rep.  427. 

Vt.  290  (1846).  '  N.  Y.  Code  Cir.  Proc.  §  429. 

'  McMurray  v.  McMurray,  66  N. 

Y.  175  (1876).  .  '}\ 


§§  2 5 1-2 5 2. J        APPEARAlfCE  BY   ATTOKNEY.  303 

§  251.  Appearance  of  defendant. — The  voluntary  appear- 
ance of  a  defendant  is  equivalent  to  a  personal  service  of  the 
summons  upon  him.'  because  a  voluntary  appearance  waives 
all  objections  to  the  regularity  or  the  sufficiency  of  the 
service  of  the  summons.'  If  a  defendant  in  a  mortgage 
foreclosure  enters  an  appearance  by  an  attorney  after  judg- 
ment has  been  entered,  he  will  be  entitled  to  notice  of  all 
subsequent  proceedings;  the  sufficiency  of  the  notice  of 
appearance  is  to  be  determined  by  the  trial  court.* 

§  252.  Appearance  by  attorney  without  authority. — 
A  judgment  recovered  against  a  defendant,  who  has  not  been 
served  with  process  and  who  has  no  knowledge  of  the  suit, 
but  for  whom  an  attorney  appeared  without  authority,  will 
be  good,  and  can  not  be  attacked  collaterally  for  want  of  juris- 
diction ;*  but  if  there  has  been  fraud  or  collusion  between 
the  plaintiff's  attorney  and  the  attorney  for  the  defendant, 
or  if  the  attorney  for  the  defendant  is  not  responsible  and 
perfectly  competent  to  answer  to  his  assumed  client  for 
damages,*  or  if  the  signature  of  the  attorney  supposed  to 
have  appeared  was  forged,  the  judgment  will  not  be  binding 
on  the  defendant.* 


>  N.   Y.   Code  Civ.   Proc.   1 424.  Lowenstein,   68  N.  Y.  456  (1877) ; 

See  Ferguson  v.  Crawford,  70  N.  Y,  Phelps    v.    Phelps,    6    N.  Y.  Civ. 

253  (1877),  reversing  7  Hun  (N.  Y.)  Proc.   Rep.   117  (1883);   Diossy  v. 

25  (1876);  Mors  v.  Stanton,  51  N.  Y.  West,    8    N.   Y.   Week.    Dig.   411 

649   (1873)  ;    Wheelock    v.  Lee,  15  (1879) ;    Dake  v.   Miller,   7  N.    Y. 

Abb.  (N.  Y.)  Pr.  N.  S.  24  (1873) ;  Week.  Dig.  353  (1878) ;  Markee  v. 

Brett  V.  Brown,  13  Abb.  (N.  Y.)  Pr.  City  of  Rochester,  6  K  Y.  Week. 

N.S.  295  (1872) ;  Allen  v.  Malcolm,  Dig.  102  (1878) ;  Wheelock  v.  Lee, 

12  Abb.  (N.  Y.)  Pr.  K  S.  335  (1872);  54  How.  (N.  Y.)  Pr.  402  (1877).   See 

Tracy  v.  Reynolds,  7  How.   (N.  Y.)  Supreme  Court  Rule  9. 

Pr.  327  (1853).  ♦  Brown  v.  Nichols,  42  N.  Y.  26 

*  Ogdensburg  &  L.  C.  R.  R.  Co.  (1870).  See  Ferguson  v.  Crawford,  70 

▼.  Vermont  &  C.  R.  R.  Co.,  63  N.  N.  Y.  253  (1877),  reversing  7  Hun 

Y.  176  (1875).  (N.    Y.)  25 ;    Denton   v.    Noyes,    6 

«  Tuller  V.  Beck,  108  N.  Y.  355  Johns.  (N.  Y.)  296  (1810) ;  8.  c.  5 

(1888) ;  s.  c.  15  N.  Y.  St.  Rep.  686  ;  Am.  Dec.  237. 

Catlin  V.   Ricketts,   91   N.   Y.   668  » Denton  v.  Noyes,  6  Johns.  (N. 

(1883) ;  Ingersoll  v.  Mangam,  84  N.  Y.)  296  (1810) ;  s.  c.  5  Am.  Dec.  237. 

Y.  622  (1881) ;  Wheelock  v.  Lee,  74  *  Ferguson  v.  Crawford,  70  N.  Y. 

N.  Y.  495  (1878) ;  Olcott  v.  Maclean,  253   (1S77).      See    Supreme    Court 

73  N.   Y.  223  (1878);   Martina  v.  Rule  10. 


304  FORECLOSURE  PREVENTS  ACTION  ON  BOND.    [§  253. 

§  253.  Commencement  of  foreclosure  prevents  action 
at  law  on  bond. — The  effect  of  commencing  an  action  to 
foreclose  a  mortgage  is  to  bar  an  action  at  law. on  the  note 
or  bond  for  the  recovery  of  the  mortgage  debt,  or  any  part 
thereof,  during  the  pendency  of  the  action  for  tlie  foreclosure 
of  the  mortgage  ;*  neither  can  an  action  at  law  be  maintained 
later  for  any  deficiency  arising  on  a  foreclosure  sale,  without 
leave  of  the  court  in  which  the  foreclosure  was  brought.* 

And  the  owner  of  a  debt  secured  by  mortgage,  who  holds 
an  independent  obligation  or  covenant  for  its  payment  given 
by  a  person  other  than  the  mortgagor,  can  not  enforce  his 
claim  against  such  obligor  by  an  action  at  law  during  the 
pendency  of  a  foreclosure  ;'  but  it  seems  that  where  proceed- 
ings for  foreclosure  and  for  a  judgment  of  deficiency  have 
been  ineffectual,  an  action  at  law  can  be  instituted  for  the 
debt  without  leave  of  the  court  in  which  the  foreclosure  was 
brought.*  This  provision  of  the  Code,  however,  does  not 
exclude  such  relief  at  law  against  the  representatives  of  a 
deceased  mortgagor  ;^  but  an  action  upon  a  guaranty  is  within 


'  This  rule  does  not  apply  to  an  at  the  same  time,  without  leave  of 

action  begun  -without  leave  of  the  the  court. 

probate  court  upon  the  bond  of  a  ^  gcofield  v.  Doscher,  73  N.  Y.  491 

mortgagor's  residuary  legatee  ;  and  (1878) ;  Belmont  v.  Cornen,  48  Conn, 

the  omission  to  obtain  leave  from  the  343  (1880). 

court  in  chancery  is  a  mere  irregu-  *  Culver    v.    Judge    of    Superior 

larity  that  may  be  waived  by  the  Court,  57  Mich.  25  (1885). 

defendants  ;    Culver    v.    Judge    of  *  Glacius  v.  Fogel,  88  N.  Y.  434 

Superior  Court,  57  Mich.  25  (1885).  (1882).     In  re  Collins,    17  Hun  (N. 

See  N.  Y.  Code  Civ.  Proc.  §1628.  Y.)  289  (1879),  after  an  action  for  fore- 

*  N.  Y.  Code  Civ.  Proc.  §  1628.  closure  had  been  prosecuted  to  judg- 

See  also  Scofield  v.  Doscher,  72  N.  ment    and    sale,     upon    which    a 

Y.  49  (1878) ;  Williamson  v.  Cham-  deficiency  had  arisen,  an  application 

plin,  8  Paige  Ch.  (N.  Y.)  70  (1839) ;  was  made  for  leave  to  sue  the  repre- 

e.  c.  Clarke  Ch.    (N.   Y.)  9.      The  sentatives  and  next  of  kin  of  the 

Supreme  Court  in  Nebraska  held  in  deceased  grantor,   they  not  having 

Clapp    V.    Maxwell,    13    Neb.   542  been  made  parties  to  the  foreclosure 

(1882),  that   a  leading  principle  of  and  no  claim  having  been  presented 

the  statute,  relative  to  the  foreclosure  against  the  estate.     It  was  held  that 

of  mortgages  upon  real  property,  is  such  application  was  addressed  to  the 

that    a    mortgagor    shall    not    be  sound  discretion  of  the  court,  and  it 

answerable    for  the    debt    secured,  would  not  be  granted  when  the  cir- 

upon  the  mortgage  and  personally  cumstances  of  the  case  would  render 


§  254.]  ACTION    AT   LAW    ON   BOND.  S05 

the  proliibition  of  this  provision,  unless  authorized  by  the 
court.* 

§  254.    Action  at  law  on  bond  by  consent  of  court.— 

Where  an  action  at  law  has  been  commenced  without  leave 
of  the  court  in  which  the  foreclosure  was  brought,  and  the  facts 
in  the  case  are  such  that  leave  would  have  been  granted  had 
a  proper  application  been  made  to  the  court,  the  court  may 
grant  leave  nunc  pro  tunc  upon  such  terms  as  may  be  just,* 
and  thus  remove  the  impediment  to  maintaining  the  action.' 
Where  such  leave  is  granted  after  suit  has  been  brought,  the 
complaint  should  be  so  amended  as  to  show  that  proper 
leave  has  been  granted.*  It  has  been  said  that  such  an  order 
may  be  granted  ex  parte,  even  after  the  neglect  to  obtain 
such  leave  has  been  set  up  as  a  defense.*  If  an  action  at 
law  is  commenced  on  the  bond,  before  an  action  in  equity  to 
foreclose  the  mortgage  is  filed,  it  can  not  be  prosecuted 
further  during  the  pendency  of  the  foreclosure.* 

The  provision  of  the  statute  prohibiting  an  action  at  law 
to  recover  the  debt  or  any  part  of  it  during  the  pendency  of 
an  action  to  foreclose,  unless  leave  of  the  court  has  been 
first  duly  obtained,  has  no  application  to  an  action  by  an 
assignee  against  the  mortgagee  upon  his  guaranty  of  the 
payment  of  the  debt,^  and  does  not  prohibit  a  junior  mort- 
gagee, who  has  filed  a  notice  of  claim  to  surplus  moneys  arising 
upon  the  foreclosure  of  a  prior  mortgage,  from  bringing,  with- 
out leave  of  the  court,  an  action  to  recover  the  debts  secured 
by  his  mortgage.*    The  pendency  of  an  action  on  a  promissory 


it   inequitable   to    permit  such  an  *  Earl  v.   David,  86   N.  Y,  634 

action.  (1881). 

'  McKernan  v.  Robinson,  84  N.  Y,  '  McKernan  v.  RobinsoD,  84  N. 

105  (1881).  Y.  105  (1881). 

«  Earl  V.  David,  86   N.    Y.    634  «  Suydam  v.  Eartle,  9  Paige  Ch. 

(1881),  aff'g  20    Hun    (N.   Y.)  527  (K   Y.)  294  (1841) ;   Williamson  v. 

(1880);  KY.  Code  Civ.  Proc.  §1623.  Champlin,  8  Paige  Ch.  (N.  Y.)  70 

»  Earl  V.   David,   86  N.  Y.    634  (1839) ;  s.  o.  Clarke  Ch.  (N.  Y.)  9. 

(1881) ;   McKernan  v.  Robinson,  84  '  Schaaf  v.  O'Brien,  8  Daly  (N. 

N.    Y.    105    ( 1881 ) ;    Scofield    v.  Y.)  181  (1878).  See  Baxter  v.  Smack, 

Doscher,  72  N.  Y.  491  (1878)  ;  Equit-  17  How.  (N.  Y.)  Pr.  183  (1859). 

able  Life  Ins.  Co.  v.  Stevens,  63  N.  *  Wyckoff  v.  Devlin,  13  Dalj  (N. 

Y.  341  (1875).  Y.)  144  (1883). 

(20) 


306  TENDER  OF    PAYMENT.  [§255. 

note,  secured  by  mortgage,  to  have  the  amount  due  on 
the  note  ascertained  and  for  a  decree  for  the  sale  of  the 
property  described  in  the  mortgage,  but  in  which  no  per- 
sonal judgment  is  sought,  is  not  a  bar  to  another  action 
upon  the  note  against  the  maker  for  a  personal  judgment.* 
A  judgment  in  an  action  to  foreclose  a  mortgage  executed 
by  a  husband  and  wife  to  secure  the  payment  of  the  wife's 
promissory  note,  constitutes  no  bar  to  a  subsequent  action 
to  subject  the  separate  estate  of  the  wife  to  the  payment 
of  a  deficiency  arising  upon  the  sale  of  the  property 
mortgaged.' 

§  255.  Tender  after  suit  brought.  —  The  New  York 
Code  of  Civil  Procedure  authorizes  a  tender  after  suit  is 
brought  "where  the  complaint  demands  judgment  for  a  sum 
of  money  only ;  and  the  action  is  brought  to  recover  a 
sum  certain,  or  which  may  be  reduced  to  certainty  by  calcu- 
lation."* But  an  action  to  foreclose  a  mortgage,  being  a 
proceeding  purely  m  rem,  can  not  properly  be  said  to  be 
brought  for  the  recovery  of  money  only;  and  consequently,  in 
such  an  action,  the  defendant  has  no  right  to  make  and  plead 
a  tender.*  But  where  an  action  is  brought  to  foreclose  a 
mortgage  against  real  property,  upon  which  a  portion  only  of 
the  principal  and  interest  is  due  and  another  portion  of  either 
is  to  become  due,  the  defendant  can  have  the  cause  dismissed, 
without  costs  as  against  the  complainant,  by  payment  into 
court,  at  any  time  before  a  final  judgment  directing  a  sale  is 
rendered,  the  sum  due  together  with  the  plaintiff's  costs  in 
the  action  ;*  and  he  may,  after  a  final  judgment  directing  a 
sale  has  been  rendered,  but  before  the  sale  is  made,  pay 
into  court  the  amount  due  for  the  principal  and  interest  and 


'  Spence  v.  Union  Cent.  Ins.  Co.,  ton  v.  Marsh,  14  How.  (N,  Y.)  Pr. 

40  Ohio  St.  517  (1884).  572  (1857) ;  s.  c.  5  Abb.  (N.  Y.)  Pr. 

2  Avery  v.  Vansickle,  35  Ohio  St.  389. 

270  (1879).  6  N.  Y.  Code  Civ.  Proc.  §  1684  ; 

3  N.  Y.  Code  Civ.  Proc.  §  731.  Malcolm    t.    Allen,   49  N.  Y.  448 
*  Astor  V.  Palache,  49  How.  (N.  (1873) ;  8.  c.  5  Alb.  L.  J.  334  ;  Long 

Y.)  Pr.  231  (1875) ;  Bartow  v.  Cleve-  v.  Lyons,  54  How.  (N.  Y.)  Pr.  12» 

land,  16  How.  (N.  Y.)  Pr.  364(1858);  (1875). 
8.  C.  7  Abb.  (N.  Y.)  Pr.  339  ;  Thuvs- 


§  256.]  WHAT   CLARIS    MAY   CE   FOEECLOSED.  307 

the  costs  of  the  action,  together  with  the  expenses  of  the 
proceedings  to  sell,  if  any,  and  have  all  proceedings  upon 
the  judgment  stayed.' 

Should  the  plaintiff  in  a  mortgage  foreclosure  accept 
from  the  defendant  the  principal  due,  and  the  interest 
thereon,  together  with  the  costs,  he  will  thereby  waive  the 
making  of  the  payment  into  court,  and  the  decree  in  the  usual 
form  of  foreclosure  and  sale,  where  subsequent  installments 
are  to  fall  due,  can  not  be  entered.*  The  plaintiff  is  not 
required  to  accept  payment  from  the  hands  of  the  defen- 
dant, after  the  decree  has  been  entered.  If  the  defendant 
wishes  a  stay  in  the  execution  of  the  decree  of  foreclosure 
and  sale,  he  should  apply  to  the  court  for  leave  to  make  the 
payment  into  court,  and  procure  an  order  for  a  stay  of  pro- 
ceedings ;  even  then  the  plaintiff  will  be  entitled  to  have  a 
provision  inserted  in  the  decree  for  its  enforcement  in  case 
of  future  defaults.  An  observance  of  the  provisions  of  the 
Code,  regulating  proceedings  for  the  foreclosure  of  mort- 
gages, where  the  whole  sum  is  not  due,  should  be  strictly 
pursued,  in  order  that  both  parties  may  be  made  acquainted 
with  the  terms  of  the  decree,  and  have  an  opportunity  to 
know  and  to  protect  their  rights.* 

§  256.  What  claims  may  be  foreclosed.  —  All  valid 
mortgages  may  be  foreclosed,  where  the  whole  or  a  part  of 
the  debt  secured  is  due  and  default  has  been  made  in  the 
payment  of  the  principal  or  of  the  interest.  And  where 
a  mortgage  has  been  adjudged  to  be  void  for  usury,  the 
mortgagee  may  enforce  a  parol  mortgage,  which  was  taken 
up  with  the  proceeds  of  such  usurious  loan.* 

After  the  death  of  a  mortgagor  the  mortgagee  may  insti- 
tute an  action  to  foreclose  the  mortgage  against  the  heirs  of 
the  mortgagor,  and  can  not  be  compelled  to  relinquish  his 
lien  on  the  real  estate  and  to  share  in  the  general  assets  of 
the  estate  ;*   and  the  mortgagee  is  not  bound   to    proceed 


•  N.  T.  Code  Civ.  Proc.  §  1635.  ter  on    Tender  and  Payment  into 

*  Long  V.  Lyons,  54  How.  (N.  Y.)  Court. 

Fr.  129  (1875).  *  Allison  v.  Schmitz,  98  N.  Y.  657 

» Long  V     Lyons,   54    How.   (N.  (1885).     See  ante  chap.  iii. 

Y.  1  Pr.  129  (1875).     See  post  chap-  »  Jones  v.  Null,  9  Neb.  57  (1879). 


308  REMOVED    FIXTUKES.  [§  257. 

against  the  estate  of  the  deceased  mortgagor  before  bringing 
his  action  to  foreclose  the  mortgage.' 

§  257.  Removed  fixtures. — A  mortgagee  can  not  enforce 
his  Hen  against  buildings  or  other  fixtures  which  were  upon 
the  land  at  the  time  the  mortgage  was  executed,  and  which 
have  been  removed  and  become  a  part  of  another  free- 
hold.' Thus,  the  severance  and  removal  of  a  house  from 
mortgaged  premises  takes  it  out  from  under  the  operation 
of  the  mortgage  and  frees  it  from  the  mortgage  lien,'  because 
such  severance  and  removal  change  the  character  of  the 
house  from  real  to  personal  property,  whether  the  act  of 
severance  and  removal  is  accidental  or  intentional.*  Where  a 
piece  of  land  and  a  dwelling  house  thereon  were  mortgaged, 
and  the  mortgagor  subsequently  removed  the  house  and 
used  a  portion  of  the  materials  together  with  new  materials 
in  erecting  a  house  on  another  lot  belonging  to  him,  which 
lot,  together  with  the  house  thus  erected,  he  afterwards,  for 
a  valuable  consideration,  conveyed  to  a  third  person,  the 
court  held  in  an  action  brought  by  the  mortgagee  for  their 
recovery,  that  the  old  materials  used  in  the  construction  of  the 
new  house  became  a  part  of  the  freehold,  and  that  the  right 
of  property  therein  vested  in  the  purchaser  and  was  free 
from  the  lien  of  the  mortgage.'  And  where  a  mortgage 
was  executed  upon  certain  real  estate  upon  which  there  was 
a  grist-mill,  and  the  mortgagor  sold  the  millstones  in  the 
mill,  which  were  removed  by  the  purchaser,  it  was  held,  in  an 
action  brought  by  the  mortgagee  to  recover  the  property, 
that  the  title  to  the  millstones  passed  to  the  purchaser.* 

This  is  in  accordance  with  the  general  rule  in  equity,  that 
a  mortgagor  in  possession  has  the  right  to  cut  timber  on  the 


'  Bell  V.   Hobaugh,   65  Ind.  598  (1865).  See  Citizens'  Bank  v.  Knapp, 

(1879).  22  La.  An.  117  (1870) ;  Codrington 

^2  Harris  V.  Bannon,   78  Ky.    568  v.  Johnstone,  1  Beav.  520  (1838). 

(1880).  »  Peirce  v.  Goddard,  39  Mass.  (22 

»  Buckout  V.   Swift,  27  Cal.   433  Pick.)  559  (1839) ;  s.  c.  32  Am.  Dec. 

(1865) ;  Peirce  v.  Goddard,  39  Mass.  764.     See  Fryatt  v.  Sullivan  Co.,  5 

(22  Pick.)  559  (1839) ;  8.  c.  38  Am.  Hill  (N.  Y.)  116  (1843). 

Dec.  764.  «  Cooper  v.  Davis,  15  Conn.  556 

♦Buckout  V.  Swift,  27  Cal.  433  (1843). 


§  258.J  DOCTELNE   OF   :HEKGEB.  309 

mortgaged  lands,  and  to  do  other  similar  acts,  and  that  a  court 
of  equity  will  not  interfere  to  restrain  him  in  the  exercise 
of  such  right,  until  it  is  made  to  appear  that  the  cutting  of 
the  timber  and  other  like  acts  are  being  carried  to  an  extent 
which  will  render  the  land  insufficient  security  for  the 
amount  due  upon  the  mortgage.*  This  right  continues  even 
after  the  decree  of  foreclosure  and  sale,  and  until  the  expi- 
ration of  the  period  allowed  for  redemption.* 

§  258.  Doctrine  of  merger. — A  merger  takes  place  only 
where  the  titles  to  the  land  and  to  the  mortgage,  equitable  as 
well  as  legal,  unite  in  the  same  person.'  Thus  it  has  been  held, 
that  if  a  mortgagor  conveys  the  mortgaged  premises  to  his 
mortgagee  and  another,  and  the  mortgagee  afterwards  con- 
veys his  interest  to  the  other  person,  this  will  extinguish  the 
mortgage  and  unite  the  whole  title  in  such  purchaser.*  And 
where  land  subject  to  a  mortgage  was  conveyed  by  the 
mortgagor,  the  grantee  assuming  and  agreeing  to  pay 
the  mortgage,  and  such  grantee  afterwards  conveyed  the 
land  to  the  mortgagee  by  a  deed  reciting  that  the  conveyance 
was  subject  to  the  mortgage  assumed  by  him,  the  mort- 
gage was  thereby  merged  and  the  mortgagee  was  not  allowed 
to  maintain  an  action  against  the  mortgagor  on  the  mortgage 
note,  although  the  value  of  the  land  at  the  time  of  the  last 
conveyance  was  less  than  the  amount  of  the  mortgage.' 

And  where  a  grantee  of  mortgaged  premises  assumes  the 
payment  of  the  mortgage  and  afterwards  takes  an  assign- 
ment* of  the  mortgage,  he  thereby  extinguishes  the  lien  and 
can  not  afterwards  revive  the  right  to  foreclose  the  mortgage 
by  assigning  it.*  But  it  has  been  held  that  a  conveyance  to 
the  mortgagee  by  an  assignee  in  bankrutcy  of  the  mortgagor 


»  Buckout  V.   Swift,  27  Cal.  433  »  Jordan  v.  Cheney,  74  Me.    359 

(1865).     ISee  VanWyck  v.  Alliger,  6  (1883). 

Barb  (N.  Y.)  511  (1849)  ;  Brady  v.  <  Lyman  v.  Geciney,  114  HI.  388 

Waldron,  2  Johns.  Ch.  (N.  Y.)  147  (1885). 

(1816) ;  King  v.  Smith,  2  Hare,  239  '  Freer  v.  Lake,  115  HI.  662(1886); 

(1843) ;  Hampton  v.  Hodges,  8  Ves.  Dickason  v.  Williams,  129  Mass.  182 

105  (1803)  ;    Wright  v.    Atkyns.    1  (1880). 

Ves.  &  B.  313,  314  (1813).  *  Winans  v.  Wilkie,  41  Mich.  2C4 

«  Cooper  ▼.  Davis,  15  Conn.  556  (1879). 
(1843). 


310  MORTGAGEE   POKCHASLNG    OF   MORTGAGOR.    [§259. 

does  not,  in  equity,  operate  to  satisfy  the  mortgage  and  will 
not  constitute  a  merger.' 

§  259.  Purchase  of  equity  by  mortgagee  from  mort- 
gagor.— There  is  no  legal  restraint  on  a  mortgagor's  selling 
the  mortgaged  property  to  the  mortgagee  in  satisfaction  of 
his  debt ;'  but  where  the  validity  of  such  a  sale  is  in  issue, 
the  burden  of  proof  is  upon  the  mortgagee  to  show  that  the 
sale  of  the  mortgagor's  equity  was  voluntarily  made,  that 
his  conduct  in  making  the  purchase  was  in  all  things  fair, 
and  that  he  paid  for  the  property  what  it  was  reasonably 
worth."  But  the  purchase  by  a  mortgagee  of  the  legal  title 
to  the  property  covered  by  the  mortgage  will  not  operate 
as  a  merger  and  extinguish  the  lien  of  his  mortgage,  unless 
such  was  the  intention  of  the  parties,  and  this  intention  will 
not  be  presumed  where  the  interests  of  the  mortgagee 
require  that  the  mortgage  should  remair  in  force.*  In  such 
a  case  the  law  will  regard  the  mortgage  as  a  continuing 
lien,  which  may  be  enforced  against  the  land,'  in  the  hands 
of  the  mortgagee  or  his  assignees,  when  it  can  be  done 
without  prejudice  to  the  rights  of  the  mortgagor  or  third 
parties.* 

Where  the  assignee  of  a  bankrupt,  with  the  approval  of 
the  court,  conveyed  mortgaged  property  to  the  mortgagees 
in  satisfaction  of  their  claims,  and  the  mortgage  was  there- 
upon discharged  of  record,  it  was  held  that  the  conveyance 
would  not  divest  the  property  of  other  liens  junior  to  the 
mortgage,  but  that  such  liens  would  remain  subject  t6  that 


•  Haggerty  v.  Byrne,  75  lud.  499  mortgage.     Rue  v.   Dole,   107  111. 
(1881).    '  275(1883). 

*  A  mortgagee  has  a  perfect  right  ^  Jones  v.  Franks,  33  Kan.   497 
to  purchase  the  mortgaged  premises,  (1885). 

and  the  mere  fact  that  the  deed  to  *  Pike  v.  Gleason,   60  Iowa,  150 

him  is  made  in  satisfaction  and  pay-  (1882) ;  First  Nat.  Bank  of  Waterloo 

ment  of  the  mortgage  will  not  make  v.  Elmore,  52  Iowa,  541  (1879). 

such  deed  a  mortgage  ;  the  surrender  *  Pike  v.   Gleason,  60  Iowa,  150 

of  the  evidences  of  the  mortgage  (1882). 

debt,  and  the  failure  to  execute  a  *  Hoffman  v.  Wilhelm,  68  Iowa, 

new  obligation  to  pay,  are  circum-  510  (1886)  ;  Vannice  v.  Bergen,  16 

stances  affording  evidence  that  the  Iowa,  555  (1864). 
conveyance  was  not  intended  as  a 


§260.]    CONVEYANCE  AFTER  ASSIGNIIENT  OF  NOTES.         311 

of  the  mortgage,  which,  as  against  them,  would  be  presumed 
not  to  have  been  discharged.' 

A  mortgage  does  not  necessarily  merge  or  become  extinct 
by  being  transferred  to  the  person  holding  the  fee  title  ;  and 
where  a  person  becomes  entitled  to  an  estate,  subject  to  a 
charge  for  his  own  benefit,  he  may  take  the  estate  and  keep 
up  the  charge.  The  question  in  such  cases  rests  upon  the  in- 
tention, actual  or  presumed,  of  the  person  in  whom  the 
estates  are  united.  Thus  a  mortgagee,  after  the  conveyance 
to  him  of  the  mortgagor's  equity  of  redemption,  may  keep  a 
mortgage  alive  in  favor  of  one  to  whom  he  had  assigned  the 
mortgage  as  collateral  security  prior  to  the  conveyance  to 
him  of  the  equity  of  redemption.  He  may  also  obtain  further 
advances  on  such  an  assignment,  which  fact  will  be  evidence 
of  an  intention  to  keep  the  mortgage  alive  ior  the  protec- 
tion of  his  assignee  ;  and  in  such  a  case  a  merger  will  certainly 
not  take  place."  But  where  mortgaged  premises  are  conveyed 
by  the  mortgagor  to  the  mortgagee  in  satisfaction  of  the 
mortgage  debt,  so  that  a  recovery  could  not  be  had  upon 
the  original  debt  in  an  action  at  law,  the  transaction  must 
be  regarded  as  an  absolute  sale  and  constitutes  a  merger, 
although  the  grantee  may  execute  a  contract  for  reconvey- 
ance upon  the  payment  of  the  amount  of  the  mortgage 
within  a  limited  time.* 

§  260.  Conveyance  after  assignment  of  notes. — A  con- 
veyance of  real  estate  by  a  mortgagor  to  his  mortgagee, 
after  a  transfer  of  the  notes  secured  together  with  the 
mortgage  to  an  assignee,  who  takes  the  same  bona  fide, 
will  not  operate  as  a  merger  of  the  mortgage,  nor  affect  the 
assignee's  rights.  After  the  recording  of  the  assignment  of 
the  mortgage,  a  purchaser  from  the  mortgagee  as  grantee 
of  the  mortgagor,  will  take  subject  to  the  equitable  rights  of 
the  assigrnee.* 


»  Stimpson  v.  Pease,  53  Iowa,  573         »  Rue  v.  Dole,  107  HI.  275  (1883). 
<1880).  *  International    Bank  of  Chicago 

*  International  Bank  of  Chicago      v.  Wilshire,  108  111.  143  (1883). 
V.  Wilshire,  108  111.  143  (1883) ;  Rue 
V.  Dole,  107  111.  275  (1883). 


312        FOEECLOsmG  Tnn)iYn)ED  interests.  [§§261-26?. 

§  261.    Mortgage  on  undivided  interest  in  land. — A 

mortgage  on  an  undivided  interest  in  land  may  be  foreclosed 
and  the  interest  sold.'  Thus,  where  one  member  of  a  partner- 
ship mortgages  property  belonging  to  the  firm,  using  the 
partnership  name  and  reciting  that  he  is  a  member  of  such 
firm,  the  mortgage  may  be  foreclosed  as  against  him,  and 
his  interest  in  the  property  sold  ;  but  it  can  not  be  foreclosed 
against  the  members  who  did  not  execute  it,  as  the  mortgage 
does  not  bind  their  interests.'  And  where  one  of  two  co- 
mortgagees  has  become  the  owner  of  the  equity  of  redemp- 
tion in  the  mortgaged  property,  the  other  can  maintain  a 
bill  for  foreclosure  to  recover  his  proportionate  share  of  the 
mortgage  fund.* 

Where  two  tenants  in  common  unite  in  executing  a  joint 
mortgage  for  a  joint  and  several  debt,  one  of  them  can  not 
compel  the  mortgagee  to  accept  his  half  of  the  debt,  and  to 
proceed  against  his  co-tenant's  moiety  for  the  collection  of 
the  other  half,  although  such  tenant  may  tender  a  sufficient 
bond  of  indemnity  against  final  loss.  In  a  foreclosure  against 
both  mortgagors  the  court  will  not  decree  a  sale  of  the 
undivided  moieties  separately.* 

§  262.  Mortgages  on  separate  pieces  of  property  for 
the  same  debt. — It  has  been  said  that  a  mortgagee  may 
legally  hold  two  mortgages  on  different  pieces  ot  land,  as 
security  for  the  same  debt,  and  that  he  may  foredo=e  the 
mortgage  on  one  piece  without  foreclosing  that  on  the 
other;  and  that  whether  a  foreclosure  on  one  will  bar  a  fore- 
closure on  the  other  depends  upon  the  value  of  the  premises 
foreclosed.'  It  seems  that  if  the  land  sold  under  the  fore- 
closure of  one  of  the  mortgages,  is  equal  in  value  to  the 
debt,  the  debt  will  be  thereby  paid  and  the  remaining 
premises  will  be  relieved  from  the  lien  of  the  mortgage.* 


1  Sutlive   V.    Jones,    61    Ga.  676         ^  pj-ogt  y  Prost,  3  Sandf .  Ch.  (N. 

(1878);  Baker  v.    Shepard,    30  Ga.       Y.)  IBS  (1846). 

706  (1860).  5  Burpee  v.   Parker,  34  Vt.    567 

« Sutlive    V.    Jones,    61    Ga.  676      (1853). 

(1878).  «  Burpee  v.    Parker,    24  Vt.    567 

3  Sandford  v.  Bulkley,   30  Conn.       (1853).      See  Case   v.  Boughton,  U 

844  (1862).  Wend.  (N.  Y.)  106  (1833) ;  West  v. 


§§263-264.]  DOUBLE  MORTGAGES.  313 

A  mortgagee  can  not  foreclose  as  to  part  of  the  mortgaged 
premises,  where  they  form  a  single  tract,  and  not  as  to  the 
balance;  because,  if  the  mortgagor  has  a  right  to  redeem  any 
part,  he  has  a  right  to  redeem  the  whole  premises.^  The 
foreclosure  of  a  mortgage  will  not  be  barred  by  the  existence 
of  another  mortgage  which  is  a  prior  security  for  the  same 
debt.'  The  giving  of  a  bond  and  mortgage  as  collateral 
security  to  an  existing  bond  and  mortgage  does  not,  per  se, 
operate  as  a  suspension  of  the  right  to  foreclose  such  first 
bond  and  mortgage.* 

§  263.  Where  mortgagee  has  lien  on  personal  prop- 
erty sufficient  to  pay  debt— An  action  to  foreclose  a 
mortgage  on  real  estate  can  not  be  maintained,  where  it 
appears  that  the  mortgage  also  covers  personal  property 
sufificient  to  satisfy  the  mortgage  debt,  until  the  remedy 
against  the  personal  property  has  been  exhausted.*  And 
where  a  mortgagee,  who  holds  two  mortgages,  one  on  real 
and  the  other  on  personal  property,  to  secure  the  payment 
of  the  same  debt,  forecloses  the  mortgage  on  the  personal 
property  and  converts  it  to  his  cwn  use,  it  will  operate  as  a 
payment  and  satisfaction  of  the  entire  mortgage  debt,  if  its 
value  is  equal  to  or  exceeds  the  amount  of  the  debt 
secured.* 

§  264,  Mortgage  with  power  of  sale.— A  power  given  in 
the  mortgage  **  ♦'O  proceed  to  sell  in  the  manner  prescribed 
by  law,"  is  in  substance  the  same  as  any  power  to  proceed  to 
sell  by  means  of  an  action  to  foreclose.*  The  fact  that  a  mort- 
gage or  deed  of  trust  contains  a  power  of  sale,and  contemplates 
a  foreclosure  without  the  aid  of  the  court,  will  not  deprive  the 


Chamberlain,  25  Mass.  (8  Pick.)  336  *  Roger  v.  Weakly,  2  Port.  (Ala.) 

(1 829) ;  Amory  v.  Fairbanks,  3  Mass.  516  (1835). 

562  (1793) ;  Omaly  v.  Swan,  3  Mason  *  Roger  v.  Weakly,  2  Port.  (Ala.) 

C.  C.  474  (1824).  516    (1835) ;      Androscoggin     Sav. 

'  Spring  V.   Haines,   21  Me.    126  Bank    v.    McRenny,    78    Me.    443 

(1842).  (1886). 

*  Connerton  v.  Millar,   41   Mich.  «  Brickell  v.   Batchelder,  62   Cal. 

608  (1879).  623  (1882).     See  the  chapter  post  on 

^  Fireman's  Ins.  Co.  v.  Wilkinson,  Foreclosure  by  Advertisement  and 

S5  N.  J.  Eq.  (8  Stew.)  160  (1882).  Sale. 


314 


MOBTGAGE    WITH   POWEll    OF   SALE. 


[§  264." 


court  of  jurisdiction  and  preclude  a  foreclosure  by  action.' 
The  mortgage  power  of  sale  is  simply  a  cumulative  remedy 
given  to  the  mortgagee,  and  does  not  affect  the  jurisdiction 
of  the  court ;'  neither  will  it  change  or  affect  the  mortgagor's 
right  to  redeem  so  long  as  that  power  remains  unexecuted.* 
But  after  a  sale  made  under  such  a  power,  the  mortgagor's 
interest  will  be  entirely  divested  and  he  will  have  no  right 
to  redeem.*  And  the  fact  that  a  judgment  has  been 
recovered  upon  the  debt  secured  by  the  mortgage,  will  not 
impair  the  power  of  sale  in  the  mortgage  ;'  but  in  New  York, 
while  a  foreclosure  suit  is  pending,  no  judgment  will 
be  rendered  nor  execution  issued  in  a  suit  at  law  upon  the 
note  or  bond  without  leave  of  the  court  in  which  the  fore- 
closure is  pending.'  The  acceptance  of  security  in  the  form 
of  a  mortgage  will  not  prevent  a  creditor  from  pursuing  any 
other  remedy  on  his  debt ;'  in  some  states  he  may  proceed 


'  Carrartine  v.  O'Connor,  81  Ala. 
573  (1852);  Marriott  v.  Givens,  8 
Ala.  694  (1845);  McGowan  v.  Branch 
Bank  of  Mobile,  7  Ala.  823  (1845) ; 
Butler  V.  Ladue,  12  Mich.  173(1863); 
Heyward  v.  Judd,  4  Minn.  483 
(1860);  Green  v.  Gaston,  56  Miss. 
748  (1879);  Morrison  v.  Bean,  15 
Tex.  267  (1855).  In  Massachusetts 
there  are  special  statutory  provisions 
regulating  the  foreclosing  of  mort- 
gages containing  a  power  of  sale ; 
Childs  V.  Dolan,  87  Mass.  (5  Allen), 
319  (1862).  See  Massachusetts  Gen. 
Stat.,  ch.  140,  §§38-44. 

-  Cormerais  v.  Genella,  22  Cal. 
116,  124,  125  (1863);  Walton  v. 
Cody,  1  Wis.  420  (1853).  Where 
the  holder  of  such  a  mortgage  applies 
to  a  court  of  equity  for  a  foreclosure 
thereof,  he  abandons  the  power  of 
sale  contained  in  the  mortgage,  and 
submits  his  cause  to  the  court  for 
such  relief  as  to  the  court  may  seem 
just ;  Heyward  v.  Judd,  4  Minn. 
483,  495  (1860). 

•Benham  v.   Kowe,   2    Cal.   387 


(1852):  8.  C.  56  Am.  Dec.  343; 
Turner  v.  Bouchell,  3  Har.  &.  J. 
(Md.)  99  (1806). 

*  Kinsley  t.  Ames,  43  Mass.  (2 
Mete.  )  29  { 1840 ) ;  Brisbane  v. 
Stoughton,  17  Ohio,  482  (1848); 
Turner  v.  Johnson,  10  Ohio,  204 
(1840). 

»  Hewitt  V.  Templeton,  48  El. 
367,  370  (1868)  ;  Thornton  v.  Pigg, 
24  Mo.  249  (1857);  Tappan  v.  Evans, 
11  N.  H.  311  (1840)  ;  His  Majesty's 
Attorney-Gen.  v.  Winstanley,  5 
Bligh.  130  (1831) ;  Burnell  v.  Martin, 
Doug.  417  (1780). 

*  Suydam  v.  Bartle,  9  Paige  Ch. 
(N.  Y.)  294  (1841) ;  Williamson  v. 
Champlin,  8  Paige  Ch.  (N.  Y.)  70 
(1839).  See  N.  Y.  Code  Civ.  Proc. 
§  1628.     See  ante  §§  253,  254. 

'  Downing  v.  Palmateer,  1  T.  B. 
Mon.  (Ky.)  64  (1824) ;  Ely  v.  Ely.  73 
Mass.  (6  Gray),  439  (1856);  Long- 
worth  V.  Flagg,  10  Ohio,  300  (1840); 
Morrison  v.  Buckner,  Hempst.  C. 
C.  442  (1843). 


§§  265-266.]   FAILURE  TO  PAY  INSTALLMENTS.  315 

at  law  and  in  equity  for  its  recovery  at  one  and  the  same 

time,  or  successively.' 

§  265.  Breach  of  payment  of  installment— Accelerated 
maturity  of  debt. — The  parties  to  a  mortgage  may  by  their 
contract  make  the  time  fixed  for  the  payment  of  the  prin- 
cipal debt,  depend  upon  the  prompt  payment  of  the  several 
installments  of  principal  and  interest,  as  they  fall  due ;  and 
may  provide  either  in  the  note  or  mortgage  that  a  failure  to 
pay  an  installment  of  principal  or  interest,  when  it  becomes 
due  and  payable,  shall  work  a  forfeiture  of  the  credit  and 
make  the  entire  debt  due  at  once.'  Such  a  stipulation 
inserted  in  the  mortgage  is  for  the  benefit  and  advantage  of 
the  mortgagee  or  his  assignee,  and  is  of  full  force  as  to  the 
remedy  on  the  mortgage  ;'  but  it  does  not  operate  to  vary  or 
extinguish  the  agreement  expressed  on  the  face  of  the  notes 
themselves  for  general  purposes.* 

Where  the  parties  to  a  mortgage  covenant  that  in  case 
of  default  in  the  payment  of  either  principal  or  interest, 
the  whole  of  the  principal  and  interest  shall  become  due  at  the 
option  of  the  mortgagee,  such  stipulation  should  be  inserted 
in  both  th*;  notes  and  the  mortgage,  in  order  that  where 
there  are  several  notes  falling  due  at  different  times,  the 
holder  of  any  of  them  may  bring  suit  to  foreclose  in  case 
of  default.* 

§  266.  Failure  to  pay  installment  of  principal. — Where 
money  secured  by  a  mortgage  is  payable  in  installments,  the 


>  Very  v.    vVatkins,  18  Ark.   546  Ohio  St.  113,  123  (1884).    See  also 

(1857) ;  Delahay  v.  Clement,   4  111.  ante  chap.  iii. 

(3  Scam.)  201  (1840) ;  Slaughter  v.  *  Redman  v.  Purrington,  65  CaL 

Foust,   4  Blackf.  (Ind.)  379  (1837) ;  271   (1884) ;  McClelland  v.  Bishop, 

Andrews  v.  Scotton,  3  Bland  Ch.  42  Ohio  St.  118,  122  (1884). 

(]Md.)  665  (1830) ;  Ely  v.   Ely,   72  *  Morgan  v.  Martien,  32  Mo.  438 

Mass.  (6  Gray),  439  (1856) ;  McCall  (1862) ;    McClelland  v.   Bishop,   43 

V.   Lenox,  9  Serg.  &  R.  (Pa.)  303  Ohio  St.  113,  122  (1884). 

(1823);  Hughes  v.  Edwards,  22  U.  » McClelland  v.  Bishop,  43  Ohio 

S.  (9  Wheat.)  48  (1824) ;  bk.  6  L.  St.  113,  123  (1884).     See  Mallory  t. 

ed.  143.     See  the  cases  cited  supra  West  Shore,  H.  R.  R.  R.  Co.,   35 

and  in  §§  253,  254  a7i(«.  N.   Y.  Sup.   Ct.   (3  J.   &  S. )  174 

«  Hoodless  V.   Reid,  112  111.   105  (1873),  and  also  NoeU  y.  Gaines,  68 

(1885);    McClelland   v.   Bishop,   42  Mo.  649  (1878). 


316  FAILURE   TO    PAY    INSTALLMENTS.  [§  266. 

mortgage  may  be  foreclosed  for  an  over-due  installment  of 
principal  or  interest,'  by  entry  or  by  a  provisional  decree 
of  judgment  and  sale.'  And  such  an  action  or  proceeding 
will  not  bar  another  foreclosure  for  a  subsequent  installment;* 
and  the  mortgage  will  thus  continue  in  force  as  to  all  subse- 
quently maturing  contracts.* 

Where  there  is  a  series  of  negotiable  notes  in  the  usual 
form,  for  separate  sums  of  money  payable  at  specified  times, 
with  a  mortgage  securing  each  according  to  its  terms  contain- 
ing a  stipulation,  that  if  default  be  made  in  the  payment 
of  any  one  of  the  notes  or  interest  thereon,  each  and  all  of 
them  shall  become  due  and  payable,  and  the  mortgage  shall 
become  absolute  as  to  "  said  notes  remaining  unpaid  at 
the  happening  of  such  default,"  such  stipulation  relates  to  the 
remedy  of  foreclosure  by  an  action  or  other  proceeding  under 
the  mortgage,  and  upon  default  the  mortgage  may  be  fore- 
closed for  the  whole  debt.*  Such  a  covenant  in  the  mortgage 
also  inures  to  the  benefit  of  the  assignee  of  the  mortgage, 
who  may  foreclose  for  the  whole  debt  upon  default  in  the 
payment  of  an  installment  thereof.' 


'  Mussina  v.  Bartlett,  8  Port.  (Ala.)  Hayward,  2  Pla.  27  (1848)  ;  Bobbins 
277  (1838) ;  Gibbons  v.  Hoag,  95  111.  v.  Swain,  68  111.  197  (1873) ;  Skelton 
45  (1880) ;  Adams  v.  Essex,  1  Bibb  v. Ward,  51  Ind.  46  (1875) ;  Kemerer 
(Ky.)  149(1808);  s.  c.  4  Am.  Dec.  623;  v.  Bournes,  53  Iowa,  172  (1880); 
Pepper  v.  Dunlap,  16  La.  163  (1840);  Poweshiek  County  v.  Dennison,  36 
Salmon  v.  Clagett,  3  Bland  Ch.  (Md.)  Iowa,  244  (1873)  ;  s.  c.  16  Am.  Rep. 
125  (1833) ;  Watkins  v.  Hackett,  20  521  ;  Darrow  v.  Scullin,  19  Kan.  57 
Minn.  106  (1873)  ;  Kennedy  v.  Ham-  (1877);  Hubbard  v.  Jarrell,  23  Md.  66 
mond,  16  Mo.  341  (1852)  ;  Noyes  v.  (1865);  Smith  v.  Osborn,  83  Mich.  410 
Barnet,  57  N.  H.  605  (187G)  ;  .John-  (1876);  Kimmel  v.  Willard,  1  Doug, 
son  V.  Brown,  31  N.  H.  405  (1855) ;  (Mich.)  217  (1843)  ;  Fowler  v.  John- 
American  Life  Ins.  Co.  v.  Ryerson,  son,  26  Minn.  338  (1880) ;  Magruder 
6  N.  J.  Eq.  (2  Halst.)  9  (1846).  v.  Eggleston,   41   Miss.  284  (1866) ; 

*  Lansing  v.  Capron,  1  Johns.  Ch.  Buford  v.  Smith,  7  Mo.  489   (1842) ; 

(N.    Y.)    617    (1815)  ;    Robinson  v.  Allen  v.    Wood,   31    N.  J.    Eq.  (4 

Wilcox,  2  N.Y.  Leg.  Obs.  160(1843);  Stew.)  103  (1879);    West's  Appeal, 

Jones    V.    Lawrence,    18    Ga.     277  88  Pa.  St.  341  (1879). 

(1855)  ;  Hunt  v.  Harding,    11   Ind.  *  Bridgeman  v.  Johnson,  44  Mich. 

245  (1858)  ;  Eastabrook  v.  Moulton,  491  (1880). 

9  Miiss.  258  (1812).  6  McClelland  v.   Bishop,  42  Ohio 

3  Cox  V.  Wheeler,  7  Paige  Ch.  (N.  St.  113,  122  (1884). 

Y.)  248  (1838);  McDougal  v.  Dow-  «  Redman  v.  Purrington,  65  Cal. 

ney.  45  Cal.    165  (1872) ;  Wilson  v.  271  (1884). 


§  267.J      FAILUEE  TO  PAY  INSTALLMENTS.         317 

In  the  foreclosure  of  a  mortgage,  given  to  secure  the  pay- 
ment of  a  sum  of  money  in  installments,  the  court  may  stay 
proceedings  in  the  action,  if  the  defendant  pays  the  install- 
ments due  and  consents  to  a  decree  of  foreclosure  subject  to 
the  future  order  of  the  court  in  case  of  a  subsequent  default.' 

§  267.  Failure  to  pay  installment  of  interest. — It  has 
been  said  that  a  mortgage  given  as  security  for  the  payment 
of  a  promissory  note  with  interest,  but  containing  no  pro- 
vision for  foreclosure  upon  the  non-payment  of  interest,  can 
not  be  foreclosed  until  the  principal  sum  becomes  due ;'  but 
the  better  and  prevailing  opmion  is  that  a  mortgage  may  be 
foreclosed  for  interest  due  on  the  mortgage  note,  although 
the  principal  of  the  note  may  not  yet  be  due.'  The  practice 
of  foreclosing  for  small  installments  of  interest,  however,  is 
condemned  as  oppressive.*  While  in  an  action  to  fore- 
close, brought  for  the  non-payment  of  a  small  balance  of 
interest,  the  court  may  dismiss  the  complaint,  it  is  not,  in 
the  absence  of  any  waiver  of  the  default,  bound  to  do  so,  and 
its  refusal  will  not  be  such  an  error  as  to  authorize  a  reversal 
on  appeal.*  Thus,  where  a  debt  is  made  payable  at  the  end 
of  a  term  of  years,  with  the  interest  payable  annually,  a  bill 
to  foreclose  the  mortgage  which  secures  it  may  be  properly 
filed  at  the  expiration  of  the  first  year  if  the  interest  is  not 
paid.' 

Where  a  mortgage  is  conditioned  for  the  payment  of  a 
certain  sum  with  interest  according  to  the  terms  of  a  note. 


•  Campbell  /.  Maoomb,  4  Johns.  Conn.  159  (1877) ;  Booknau  v.  Bur- 

Ch.  (N.  Y.)  5iA  (1820)  ;  Lansing  v.  net,  49  Iowa,  303  (1878)  ;  Stafford  v. 

Capron,    1  Johns.    Ch.   (N.  Y.)  617  Maus,   38    Iowa,    133  (1874)  ;  Van 

(1815) ;  Robinson  v.  "Wilcox,  2  N.  Y.  Doren  v.  Dickerson,  33  N,  J.  Eq.   (6 

Leg.  Obs.  160  (1843) ;  Jones  v.  Law-  Stew.)  388  (1881) ;  Mahn  v.  Hussey, 

rence,  18Ga.277(1855);  Stanhope  v.  28  N.  J.  Eq.   (1  Stew.)  546  (1877); 

Manners,  2  Eden,  197  (1763).     See  Glass  v.  Warwick,   40  Pa.  St.    140 

ante  chap.  iii.  (1861);  8.  o.  80  Am.  Dec.  566. 

«  Brodribb  v.  Tibbets,   58  Cal.  6  *  Mabie  v.  Hatinger,  48  Mich.  341 

(1881).  (1882). 

«  Valentine    v.    VanWagner,     37  6  House  v.  Eisenlord,    103  N.  Y. 

Barb.  (N.  Y.)  60  (1862);  Bank  of  San  713  (1886). 

Luis  Obispo  v.  Johnson,  53  Cal.  99  *  Dederick  v.  Barber,  44  Mich.  19 

(1878)  ;  Hunt  v.  Dohrs,  39  Cal.  304  (1880)  ;     Scheibe    v.    Kennedy,    64 

(1870) ;    Butler    v.    Blackman,    45  Wis.  564  (1885). 


318  FAILUEE   TO    PAY    INSTALLMENTS.  [§267. 

to  secure  which  the  mortgage  was  given,  the  terms  of  such 
note  will  be  imported  into  the  mortgage,  and  a  failure  to  pay 
the  interest,  as  provided  in  the  note,  will  constitute  a  breach 
of  the  contract  for  which  the  mortgage  may  be  foreclosed/ 
Some  of  the  cases,  however,  hold  that  a  failure  to  pay  interest 
as  it  becomes  due,  under  such  a  clause  in  the  note  or  mort- 
gage, authorizes  a  foreclosure  for  such  interest  only,  and  not 
for  the  principal,  which  is  not  yet  due.' 

Where  a  note  or  bond  secured  by  a  mortgage,  provides 
that  on  default  in  the  payment  of  the  interest  thereon  for  a 
specified  number  of  days  after  the  same  becomes  due  and 
payable,  the  principal  shall,  at  the  option  of  the  obligee, 
become  payable  after  default,  and  the  obligee  ratifies  several 
parol  extensions  of  the  time  for  paying  the  interest  made  by 
an  agent,  a  subsequent  similar  extension  will  be  deemed  a 
waiver  of  the  forfeiture,  and  an  action  to  foreclose  for  such 
interest  will  not  be  permitted.* 

Where  a  note  contains  a  clause  providing  that  "  any 
interest  remaining  due  and  unpaid  shall  be  added  monthly 
to  the  principal  and  bear  interest  at  the  same  rate,"  and  the 
mortgage  securing  such  note  provides  that  in  case  default 
shall  be  made  in  the  payment  of  the  principal  sum  or  of  the 
interest  thereon,  or  any  pari  thereof,  according  to  the  terms 
of  the  note,  the  mortgagee  shall  be  empowered  to  proceed  to 
sell  the  mortgaged  premises  in  the  manner  prescribed  by  law ; 
the  mortgagee  will  have  the  right,  on  default  in  the  monthly 
payment  of  interest,  to  commence  an  action  to  foreclose.* 
But  such  a  clause  in  the  mortgage,  giving  the  mortgagee 
the  right  to  sell  in  case  of  default,  refers  to  a  default  in  the 
payment  of  interest,  not  to  a  default  in  adding  it  unpaid  to 
the  principal ;  the  right  to  dispose  of  the  interest  due  and 
unpaid  in  the  mode  prescribed  in  the  note,  is  given  to  the 
mortgagee  and  not  to  the  mortgagor;  and  the  mortgagee 
may  delay  exercising  it,  or  waive  it,  but  a  delay  in  exercising 
such  right  can  not  be  so  construed  as  to  deprive  him  of  it.* 


»  Scheibe    v.   Kennedy,    64  Wis.  «  Bell  v.  Bomaine,  30  N.  J.  Eq.  (3 

564(1885).  Stew.)  34  (1878). 

*  Bank    of  San  Luis    Obispo   v.  ■*  Bricknell  v.  Batchelder,  62  Cal. 

Johnson,  58  Cal.  99  (1878).  623  (1882). 


§§  2 68 -2 69. j  EQUITABLE    MORTGAGE.  319 

Where  a  mortgage  provides  that  upon  failure  to  pay  an 
installment  of  interest  or  principal  when  due,  the  whole  sum 
shall  become  due  and  payable  if  the  mortgagee  so  elects,' 
a  formal  notice  of  election  to  foreclose  the  whole  debt  on 
failure  to  pay  an  installment  is  unnecessary;  a  declaration 
of  such  election  in  the  complaint  will  be  sufficient.' 

§  268.     Equitable  mortgage  to  repay  purchase  money. 

— An  instrument  designated  as  a  "memoranda  of  contract," 
signed  by  the  parties  to  be  charged,  recited  that  the  party 
for  whose  benefit  the  instrument  was  given  had  advanced 
the  money  with  which  to  purchase  a  certain  piece  of  land, 
which  was  described  in  the  instrument,  the  use  and  control 
of  which  was  to  be  turned  over  to  such  party  until  sold,  and 
when  sold  the  purchase  price  was  to  be  returned  to  him  with 
one  half  of  the  profit.  On  the  death  of  the  parties  purchas- 
ing, an  action  was  brought  on  the  contract  with  a  demand  in 
the  complaint  that  the  land  be  ordered  sold  and  that  the 
claim  for  the  purchase  money  advanced  be  paid  out  of 
the  proceeds.  The  court  held  that  the  instrument  was  an 
equitable  mortgage,  and  that  the  plaintiff  was  entitled  to 
have  the  land  sold  to  pay  the  debt  evidenced  by  it.  No 
time  having  been  fixed  in  which  the  purchase  money  was  to 
be  repaid,  the  law  required  that  it  should  be  paid  within  a 
reasonable  time.* 

§  269.  Equitable  mortgage  by  deposit  of  title  deeds. — 
In  England  it  has  long  been  held  that  a  deposit  of  title  deeds 
with  a  creditor  by  his  debtor  is  evidence  of  a  valid  agreement 
to  give  a  mortgage,  which  agreement  may  be  enforced  by 
treating  the  transaction  as  an  equitable  mortgage.*  Some  of 
the  American  courts,  however,  have  repudiated  this  doctrine 
and  refused  to  recognize  this  species  of  mortgage  ;*  but  in 


»  BrickneU  v.  Batchelder,  62  Cal.  *  See  Stoddard  v.  Hart,  23  N.  Y. 

623  (1882).  556,  560  (1861). 

>  Loweastein  v.  Phelan,   17  Neb,  *  See  Stoddard  v.  Hart,  23  N.  Y. 

429  (1885).  556,  561  (1861) ;    Berrj  v.   Mutual 

«  Johnson  v.  VanVelsor,  43  Mich.  Ins.  Co.,  2  Johns.  Ch.  (N.  Y.)  603 

208  (188C).     See  ante  chap.  iii.  (1817) ;  Vanmeter  v.  McFadden,  8 

3  Brown  v.  Brown,  103  Ind.  23  B.  Hon.  (Ky.)  435  (1848) ;  Shitz  v. 

(1885).  Dieffenbach,  3  Pa.   St.  233  (1846) ; 


320  MORTGAGE   BY   DEPOSIT    OF   TITLE   DEEDS.     [§270. 

many  states  such  mortgages  are  valid,  although  not  a  com- 
mon form  of  security.'  In  those  states  where  equitable 
mortgages  by  deposit  of  title  deeds  are  valid,  they  may  be 
foreclosed  by  an  equitable  action.  In  New  York  a  mere 
parol  agreement  to  make  a  mortgage,  or  a  deposit  of  a 
deed,  does  not  create  an  equitable  lien  ;  the  doctrine  is  said 
to  be  almost  unknown,  because  there  is  no  practice  of  creat- 
ing liens  in  that  manner.*  It  is  very  questionable  whether 
the  doctrine  of  an  equitable  mortgage  by  a  deposit  of  title 
deeds  could  be  maintained  under  the  New  York  statutes. 
It  has  been  held  in  Tennessee  that  a  mortgage  by  parol 
and  a  deposit  of  title  deeds,  is  not  valid  under  the  statute ;'  and 
the  same  doctrine,  it  seems,  prevails  in  Massachusetts.* 

§  270.  Agreement  to  execute  mortgai^e.— An  agree- 
ment to  execute  a  mortgage  on  land  is  in  equity  a  specific  lien 
upon  such  land  ;'  and  a  mortgage  thus  created,  is  entitled  to 
preference  over  subsequent  judgments.*  But  the  agreement 
to  execute  a  mortgage  must  be  in  writing,  the  mere  advance- 
ment of  money  not  being  such  a  part  performance  as  will 
take  the  contract  out  of  the  statute  of  frauds.^ 


BickneU    v.   Bicknell,   31   Vt.    498  v.  Carpenter,  2  Paige  Ch.  (N.  T.) 

(1859).  217,  264  (1830) ;  In  re  Howe,  1  Paige 

>  See  Mounce  v.  Byars,  16  Ga.  469  Ch.  fN.  Y.)  125,  129,  130  (1828) ;  s. 

(1854) ;  Gotliard  v.  Flynn,  25  Miss.  c.   19    Am.    Dec.    395  ;    Bloom  v. 

68  (1852) ;  Gale  v.  Morris,  29  N.  J.  Noggle,  4  Ohio  St.  45  (1854). 
Eq.  (2  Stew.)  222  (1878) ;  Hackett  v.  «  Payne  v.  Wilson,  74  N.  Y.  348, 

Reynolds,  4  R.  I.  512  (1857) ;  Jarvis  352  (1878) ;   Robinson  v.  Williams, 

V.  Butcher,  16  Wis.  307  (1862).    See  22    N.   Y.   380,   386   (1860) ;  In  re 

also  Chase  v.  Peck,  21  N.  Y.  581,  Howe,  1  Paige  Ch.  (N.  Y.)  125,  129 

684  (1860).  (1830) ;  s.   c.   19    Am.    Dec.    395  ; 

«  Stoddard  v.  Hart,  23  N.  Y.  556,  Rockwell  v.  Hobby,  2  Sandf.  Ch. 

661  (1861).    See  Berry  v.  Mutual  Ins.  (N.  Y.)  9  (1844). 
Co.,  2  Johns.  Ch.  (N.  Y.)  603  (1817).  ^  Marquat  v.  Marquat,  7  How.  (N. 

8  Meador   v.    Meador,    3    Heisk.  Y.)  Pr.  417  (1853) ;  Dean  v.  Ander- 

(Tenn.)  562  (1871).  son,   34  N.   J.   Eq,    (7  Stew.)    496 

*  Ahrend  v.   Odiorne,  118  Mass.  (1881),  and  note.   There  is  an  excep- 

261  (1875).  tion  to  this  rule  where  an  accident. 

'  See  Payne  v.  Wilson,  74  N.  Y.  fraud    or   mistake   is    shown,   and 

348,  351  (1878)  ;  Chase  v.  Peck,  21  where,  upon    the    well  established 

N.    Y.    581    (1860) ;    Seymour    v.  principles   of    equity,    such    relief 

Canandaigua  &  N.  F.  R.  R.  Co.,  14  would  be  permissible.     See  Ray  v. 

How.  (N.  Y.)  Pr.  531  (1857) ;  White  Adams,  4  Hun  (N.  Y.)  332  (1875). 


§270.]  EQUITABLE    MORTGAGE.  321 

It  is  a  general  principle  in  equity  jurisprudence  that  an 
agreement  in  writing  to  execute  a  mortgage,  or  a  mortgage 
defectively  executed,  or  an  imperfect  attempt  to  create  a 
mortgage,  or  an  apportionment  of  specific  property  to  the 
discharge  of  a  particular  debt,  will  create  a  mortgage  in 
equity  which  will  have  preference  over  subsequent  judgments. 
This  rule  is  founded  on  the  principle  that  a  court  of  equity 
looks  upon  things  agreed  to  be  done  as  actually  performed.* 
An  agreement  in  writing  to  execute  a  mortgage  will  be 
enforced,  where  it  is  plain  that  the  parties  intended  to  impose 
a  charge  upon  specified  lands  as  a  security  for  the  payment 
of  a  sum  of  money ;  and  the  agreement  will  be  treated  as 
conferring  rights  similar  to  those  inherent  in  mortgages.' 
And  this  is  true  also  where  the  parties  do  not  explicitly  con- 
tract for  the  giving  of  a  mortgage,  but  it  is  manifestly  equita- 
ble that  the  land  should  be  charged  with  the  indebtedness.' 
[  It  has  been  held  that  an  attempt  to  execute  a  mortgage, 
which  fails  for  want  of  some  of  the  formalities  required  by 
statute,  will  constitute  a  valid  mortgage  in  equity,*  even 
against  judgment  creditors.*  But  an  instrument  in  the  form 
of  a  mortgage,  which  contains  the  name  of  no  mortgagee, 
will  not  become  operative  by  its  delivery  to  one  who  advances 
money  upon  the  agreement  that  he  shall  hold  the  paper  as 
security  for  his  loan.*  And  it  is  questionable  whether  such 
an  instrument  could  be  made  effectual  by  parol  authority 
from  a  mortgagor  to  insert  the  lender's  name  as  mortgagee.^ 


>  National  Bank  of  Norwalk  v.  Hutchins,  6  Hill  (N.  T.)  143  (1843)  ; 

Lanier,  7  Hun  (N.  Y.)  623  (1876) ;  Seymour  v.  Canandaigua  &  N.  F. 

Burger  v.  Hughes,  5  Hun  (N.  Y.)  R.  R.  Co.,  14  How.  (N.  Y.)  Pr.  531 

180  (1875).     See  Siemon  v.  Schurck,  (1857). 

29  N.  Y,  598  (1864) ;  Wadswortli  v.  «  Hoyt  v.  Doughty,  4  Sandf .  (N. 

Wendell,  5  Johns.  Ch.  (N.  Y.)  230  Y.)  463  (1851). 

(1821)  ;  Arnold  v.  Patrick,  6  Paige  *  Payne  v.  Wilson,  74  N.  Y.  343 

Ch.   (N.   Y.)  310  (1837) ;   White  v.  (1878). 

Carpenter,  2  Paige  Ch.  (N.  Y.)  217  *  Delaire  v.  Keenan,  3  Desaus.  (S. 

(1830) ;  Morse  v.  Faulkner,  1  Anst.  C.)  Eq.  74  (1809).     Contra,  Price  v. 

11,  14  (1792) ;  Burn  v.  Burn,  3  Ves.  Cutts,  29  Ga.  142  (1859;. 

582  (1798).  «  Chauncey  v.  Arnold,  24  N.   Y. 

«  See  Chase  v.  Peck,  21  N.  Y.  581  330  (1862) ;  s.  c.  2  Am.  L.  Reg.  317. 

(1860) ;  DePierres  v.  Thorn,  4  Bosw.  ''  Chauncey  v.   Arnold,  24  N.  Y. 

<N.    Y.)    266    (1859) ;    Stewart    v.  330  (1862) ;  s.  c.  2  Am,  L.  Keg.  317. 

(2U 


322  JOINDER  OF  ACTIONS.  [§§  271-272. 

§  271.    Junior  mortgagee  can  not  compel  foreclosure 
by  senior  mortgagee.— It  rests  with  the  holder  of  a  mort- 
gagee to  select  for  himself  the  time  and  manner  of  enforcing 
his  security,  so  long  as  he  does  not  prosecute  it  unlawfully 
or  unjustly  as   against   a   subordinate  interest.'     And   the 
principle  is  well  established  that  a  junior  mortgagee,  in  an 
action  to  foreclose  his  mortgage,  can  not  make   the  prior 
mortgagee  a  party  to  the  suit,  and  compel  the  foreclosure 
of  such  prior  mortgage.'     But  the  plaintiff  may  make  a  prior 
incumbrancer  a  party  to  the  suit  for  the  purpose  of  having 
the  amount  of  his  incumbrance  ascertained  and  paid  out  of  the 
proceeds.*     And  where  a  prior  mortgagee  has  been  made  a 
party  to  an  action  to  foreclose  by  the  junior  mortgagee,  he 
may  in  his  answer  set  up  the  prior  mortgage  and  ask  to 
have  it  paid  in  its  priority,  before  any  of  the  proceeds  of  the 
sale  are  applied  to  the  payment  of  the  plaintiff's  mortgage ; 
and  the  court  may  render  judgment  to  that  effect;*  but  it  is 
improper  to  insert  such  a  clause  in  the  judgment,  where  it 
may  operate  to  the  prejudice  of  other  defendants  who  have 
no  opportunity  for  contesting  the  priority  claimed.*     The 
prior  mortgagee  is  not  obliged,  however,  to  take  this  course 
to  protect  his  rights.* 

§272.  Joinder  of  actions. — The  Code  permits  the 
plaintiff  to  unite  in  the  same  complaint  two  or  more  causes 
of  action,  whether  they  are  such  as  have  heretofore  been 
denominated  legal  or  equitable,  or  both,  where  they  arise  out 
of  the  same  transaction,  or  transactions  connected  with  the 
same  subject  matter.*  Where  the  plaintiff  has  other  liens 
upon  the  property  besides  his  mortgage  lien,  he  may  set 
them  out  in  the  complaint  and  have  them  established ;  or 

•  Adams  v.  McPartlin,   11  Abb.  •  Emigrant     Industrial     Savings 

(N.  Y.)  N.  0.  369  (1882).  Bank  v.  Goldman,    75  N.  T.  127 

•Adams  v.   McPartlin,   11  Abb.  (1878). 

(N.  Y.)  N.  C.  369  (1882);  McReynolds  *  Doctor  v.  Smith,  16  Hun  (N.  Y.) 

V.  Munns,    2   Keyes   (N.  Y.)    214  245  (1878).     See  ante  chap.  ix. 

(1865).       See   Emigrant    Industrial  »  Payn  v.  Grant,  23  Hun  (K  Y.) 

Savings  Bank  v.  Goldman,  75  N.  Y.  1-34  (1880). 

127  (1878) ;  Frost  v.  Koon,  30  N.  Y.  «  Payn  v.  Grant,  23  Hun  (N.  Y.> 

428  (1864) ;  Coming  v.  Smith,  6  N.  134  (1880). 

Y.  82  ^1851).    See  ante  chap.  ix.  ■»  N.  Y.  Code  Civ.  Proc.  §  484. 


§  272.]  JOESTDEK   OF   ACnONS.  323 

after  the  sale  of  the  premises  he  may  present  and  establish  a 
claim  to  the  surplus,  the  same  as  any  other  person  holding 
a  lien  subsequent  to  the  mortgage.' 

Where  a  mortgagee  holds  two  or  more  mortgages  upon 
the  same  premises  they  should  both  be  set  out  in  the  com- 
plaint and  foreclosed  in  the  same  action,  only  one  suit  to 
foreclose  both  being  proper;  if  the  mortgagee  brings  two  suits 
he  will  be  allowed  costs  in  but  one  of  them.'  And  the 
assignee  of  two  mortgages  on  the  same  land  executed  by 
the  same  mortgagor  at  different  times  to  different  mort- 
gagees may  unite  them  in  one  action  to  foreclose.'  So  also 
two  mortgages  given  by  different  persons  to  secure  the  same 
debt  may  be  foreclosed  in  one  and  the  same  suit.*  And  a 
single  mortgage  given  to  secure  two  debts  may  be  foreclosed 
in  favor  of  both  creditors  in  the  same  action.'  Only  one 
foreclosure  being  permissible  on  a  single  mortgage  to  secure 
different  debts  due  to  different  creditors,  if  more  than  one 
action  is  commenced  they  will  be  consolidated.* 

If  a  person  holds  two  mortgages  on  the  same  property  to 
secure  different  debts,  one  of  which  is  due,  and  the  other  is 
not  due,  he  may  file  his  complaint  for.  the  foreclosure  of 
both  mortgages,  although  the  second  may  not  be  due,  pro- 
viding it  will  become  due  before  the  decree  for  the  sale  of 
the  property  is  entered  ;  the  defendant  can  not  defeat  the 
action  as  to  the  second  mortgage  by  tendering  the  amount 
due  on  the  first  mortgage  after  the  maturity  of  the  second/ 
And  where  the  whole  of  the  junior  mortgage  has  become 
due  and  payable,  and  a  part  only  of  the  senior  mortgage  is  due, 
the  complainant  will  be  entitled  to  a  decree  to  sell  sufficient 
of  the   mortgaged    premises   to   pay  the  amount  of  both 


'  Field  V.  Hawxhurst,  9  How.  (N.  •*  McGoTvan  v.   Branch   Bank  of 

T.  )  Pr.  75  (1853) ;  Tower  v.  White,  MobUe,  7  Ala.  823  (1845). 

10  Paige  Ch.  (N.  Y.)  395  (1843).  *  Chambeilin  v.  Beck,  68  Ga.  346 

»  Roosevelt  v.  Ellithrop,  10  Paige  (1883). 

Ch.  (N.  Y.)  415  (1843) ;  Demarest  v.  s  Benton  v.  Barnet,  59  N.  H.  249 

Berry,  16  N.  J.  Eq.  (1   C.  E.  Gr.)  (1879). 

481  (1864) ;  Oconto  Co.  v.  Hall,  42  i  Hawkins  v.   Hni,   15    Cal.   499 

Wis.  59  (1877).  (1860) ;  s.  c.  76  Am.  Dec.  499.     See 

3  Pierce  v.  Balkam,  56  Mass.  (2  Campbell  v.  Macomb,  4  Johns.  Ch. 

Cush.)  374  (1848).  (N.  Y.)  534  (1820). 


324  CONSOLIDATION    OF   ACTIONS.  [§  273. 

mortgages,  unless  the  defendant,  previous  to  the  sale,  pays 
the  junior  mortgage  and  the  costs  of  foreclosure,  together 
with  the  portion  of  the  senior  mortgage  which  has  become 
due." 

Where  a  mortgagee  is  the  holder  of  two  mortgages  upon 
the  same  property,  but  one  of  them  covers  only  a  portion 
of  the  premises  included  in  the  other,  suit  should  be  brought 
in  the  first  place  for  the  foreclosure  of  the  mortgage 
covering  the  entire  premises,  for  an  action  upon  the  other 
mortgage  would  then  be  unnecessary."  But  a  person  who  is 
the  holder  of  two  mortgages  upon  separate  pieces  of  prop- 
erty securing  the  same  debt,  or  securing  different  debts,  can 
not  foreclose  both  of  such  mortgages  in  one  action. 

§  273.  Consolidation  of  actions. — The  Code  provides, 
that  where  two  or  more  actions,  in  favor  of  the  same  plaintiff 
against  the  same  defendant,  for  causes  of  action  which  may 
be  joined,  are  pending  in  the  same  court,  the  court  may,  in 
its  discretion,  by  order,  consolidate  any  or  all  of  them,  into  one 
action.'  And  where  one  of  the  actions  is  pending  in  the 
supreme  court,  and  another  is  pending  in  another  court, 
the  supreme  court  may,  by  order,  remove  to  itself  the  action 
in  the  inferior  court,  and  consolidate  it  with  that  in  the 
supreme  court.* 

The  power  of  the  court  to  consolidate  several  actions 
pending  in  such  court,  exists  only  where  it  would  have  been 
proper  to  join  the  several  causes  of  action  in  the  same  com- 
plaint under  the  provisions  of  the  Code ;"  even  where  the 
power  exists  the  court  may,  in  its  discretion,  refuse  to  exercise 
it.  It  has  been  held  that  the  power  conferred  by  these  sections 
of  the  Code  is  confined  exclusively  to  the  consolidation  of 
actions  at  law,  and  is  not  applicable  to  cases  in  equity."  It 
was  held,  however,  under  a  former  statute,  that   suits  in 


>  Hall  V.  Bamber,  10  Paige  Ch.  •  Selkirk  v.  Wood,   9  N.  Y.  Civ. 

(N.  Y.)  296  (1843).  Proc.  Rep.  141  (1886) ;  Bech  v.  Rug- 

»  Demarest  v.  Berry,  16  N.  J.  Eq.  gles,  6  Abb.  (N.  Y.)  N.  C.  69  (1878) ; 

(1  C.  E.  Gr.)  481  (1864).  Lockwood  v.  Fox,  8  Daly  (N.  Y.)  11, 

*  N.  Y.  Code  Civ.  Proc.  §  817.  27  (1878) ;    Kipp  v.    Delamater,  58 

*  N.  Y.  Code  Civ.  Proc.  §  818.  How.  (N. Y.)  Pr.  183  (1879);  Grant  v. 

*  N.  Y.  Code  Civ.  Proc.  §  484.  Spencer, Voorhies  Code  (1864);  336  f. 


§273.]  CONSOLIDATION    OF   ACTIONS.  325 

equity,  such  as  foreclosures  of  mortgages,  may  be  consoli- 
dated as  well  as  actions  at  law,  but  that  the  granting  or 
denying  of  the  application  is  discretionary.' 

It  has  been  said,  where  two  actions  were  brought  to  fore- 
close two  mortgages  on  separate  adjoining  parcels  of  land, 
both  of  which  were  executed  by  the  defendant  to  the 
plaintiff  for  the  same  debt,  and  the  parties  in  both  actions 
were  the  same  and  the  defences  identical,  that  the  actions 
could  not  be  consohdated ;'  because  actions  for  the  fore- 
closure of  mortgages  are  not  actions  on  contract  within  the 
meaning  of  the  Code  of  Civil  Procedure,"  which  provides  for 
the  joinder  in  the  same  complaint  of  such  actions  alone. 
Foreclosures  are  actions  in  rem  against  parcels  of  land,  and 
such  actions  can  not  be  consolidated  where  they  do  not  arise 
out  of  the  same  transaction  or  subject-matter."  But  where 
several  notes  secured  by  a  single  mortgage  are  held  by 
different  parties,  if  each  holder  brings  a  foreclosure  suit,  the 
actions  may  be  consolidated.* 

•  Eleventh  Ward  Savings  Bank  v.  *  Selkirk  v.  Wood,  9  N.  Y.  Civ. 
Hay,  55  How.  (N.  Y.)Pr.  438  (1877).      Proc.  Rep.  141  (1886). 

«  Selkirk  v.  Wood,  9  N.  Y.  Civ.  <*  Benton  v.  Barnet,  59  N.  H.  249 

Proc.  Rep.  141  (1886).  (1879). 

*  N.  Y.  Code  Civ.  Proc.  §  484. 


CHAPTER  Xlli. 

THE  COMPLAINT. 


§  274.  Form  of  complaint. 

275.  Allegation  as  to  claim. 

276.  Allegation    as    to    title    and 

ownership  of  mortgage. 

277.  Allegation  of  execution  and 

delivery  of  mortgage. 

278.  Description  of  note  or  bond. 

279.  Allegation  against  mortgagor, 

siil)sequent  purchasers  and 
co-deft.'udants. 

280.  Complaint  under  New  York 

practice. 

281.  Allegation  by  or  against  ad- 

ministrator,    executor     or 
trustee. 

282.  Allegation  where  money  due 

on  demand. 

283.  Allegation  as  to  assignment 

of  mortgage. 

284.  Allegation  on  mortgage  secur- 

ing several  notes. 

285.  Allegation  as  to  proceedings 

at  law — Rules  in  New  York 
and  Wisconsin. 

286.  Allegation   where  there  are 
I      infant  defendants. 

287.  Allegation    where    mortgage 

collaterally  assigned. 


§  288.  Allegation  as  to  recording 
mortgage  and  subsequent 
deeds. 

289.  Allegation  to  bar  dower. 

290.  Allegation  as  to  defendants' 

interests. 

291.  Default  in  answering  by  prior 

incuinbraucer. 
293.  Prayer  of  complaint. 

293.  Demand    for    judgment     of 

deticieucy. 

294.  Allegation  for  personal  judg- 

ment against  grantee  assum- 
ing payment. 

295.  Allegation    as    to    property 

mortgaged. 

296.  Referring    to    mortgage    or 

other    instruments  for    de- 
scription. 

297.  Defective  description. 

298.  Allegation   as  to   breach    of 

contract  and  right  of  action. 

299.  Allegation  in  foreclosure  of 

indemnity  mortgage. 

300.  Allegation  as  to  defendant's 

interest. 

301.  Dismissal    of   complaint    on 

payment  before  judgment. 


§  274.  Form  of  complaint. — The  complaint  in  an  action 
for  the  foreclosure  of  a  mortgage,  in  respect  to  its  form  and 
other  matters,  is  regulated  by  the  Code  of  Civil  Procedure.' 
The  complaint  under  the  New  York  Code  is  the  same  in 
substance  as  the  former  bill  in  equity,  and  must,  as  in  other 
actions,  contain  the  title  of  the  action,  and  state  in  plain  and 
concise  language  the  facts  constituting  the  cause  of  action, 
''without  unnecessary  repetition."  It  must  also  contain  a 
demand  for  the  judgment  to  which  the  plaintiff   believes 


»  N.  Y.  Code  Civ.  Proc.  §  518,  et  seq. 
326 


§275.]  FORM   OF   COMPLAINT.  o27 

himself  entitled.'  It  is  also  required  that  "the  complaint,  in 
an  action  to  foreclose  a  mortgage  upon  real  property,  must 
state,  whether  any  other  action  has  been  brought  to  recover 
any  part  of  the  mortgage  debt,  and  if  so,  whether  any  part 
thereof  has  been  collected."* 

In  an  action  for  foreclosure  the  mortgage  and  the  bond  or 
note  secured  thereby  must,  in  some  manner,  be  made  a  part 
of  the  complaint  or  bill ;'  but  if  the  substance  of  the  mort- 
gage is  set  out,  it  will  be  sufficient/  The  plaintiff  in  a  suit 
to  foreclose  a  mortgage  can  recover  upon  default  only  on  the 
cause  stated  in  his  complaint  or  bill ;'  and  where  a  personal 
judgment  is  desired  for  any  deficiency  that  may  arise,  facts 
sufficient  to  support  it  must  be  set  out  in  the  complaint,  and 
such  relief  specially  demanded. 

§  275.  Allegation  as  to  claim. — In  an  action  to  foreclose 
a  mortgage,  the  claim  which  the  mortgage  was  given  to 
secure,  and  upon  which  the  action  is  founded,  should  be 
fully  set  out,  and  it  must  appear  that  the  debt  secured  is  due 
and  owing  to  the  complainant ;'    if  the  obligation  secured 


'  N.  Y.  Code  Civ.  Proc.  §  481,  Ind.  494  (1862) ;  Brown  v,  Shearon, 
Similar  provisions  are  made  by  the  17  Ind.  239  (1861) ;  Mickle  v.  Max- 
codes  of  the  various  states  in  which  field,  42  Mich.  304  (1879). 
codes  of  procedure  have  been  *  Emeric  v,  Tams,  6  Cal.  155 
adopted.  See  California  Code  Civ,  (1856) ;  ^tnaLife  Ins.  Co.  v.  Finch, 
Proc.  §  426  ;  Dakota  Code  Civ.  Proc.  84  Ind.  301  (1882);  Sturgeon  v. 
§111  ;  Florida  Code  Civ.  Proc.  §93;  Board  of  Commissioners,  65  Ind. 
Iowa  Code  Proc.  §  2646 ;  North  302  (1879) ;  Cecil  v.  Dynes,  2  Ind, 
Carolina  Code  Civ.  Proc.  §  93  ;  Ohio  266  (1850). 

Code    Civ.    Proc.    §  85.     See   also         «  See  Simonson  v.  Blake,  12  Abb. 

Wa  Ching  v.  Constantine,  1  Idalio  (N.  Y.)  Pr.  331  (1861) ;  s.  c.  20  How. 

(N.  S.)  266  (1883).  (N.    Y.)  Pr.  484 ;    Shoaf  v.  Joray, 

»  N,  Y.  Code  Civ.  Proc.  §  1629  ;  86  Ind.  70  (1882) ;  Knowles  v.  Rab- 

Lovettv,  German  Reformed  Church,  lin,  20  Iowa,  101  (1865);  Hansford 

12  Barb.   (N.  Y.)  67  (1851) ;  North  v.  Holdam,  14  Bush  (Ky.)  210(1878); 

River  Bank  v.  Rogers,  8  Paige  Ch,  Converse  v.  Blumrich,  14  Mich.  109 

(N.  Y.)  649  (1841).  (1866). 

*  See  Whitney    v.  Buckman,   13  ®  See  Cornelius  v.  Ilalsey,  11  N. 

Cal.  536  (1859) ;   Harlan  v.  Smith,  6  J.  Eq.  (3  Stockt.)  27  (1855).     But 

Cal.   173  (1856) ;  Shoaf  v.  Joray,  86  see  Chesterraan  v.  Eyland,  81  N.  Y. 

Ind.  70  (1882) ;  Buck  v,  Axt,  85  Ind.  401  (1880);   Brown  v.  Kahnweiler, 

512  (1882) ;    Ogborn  v.  Eliason.  77  28  N.  J.  Eq.  (12  C.   E.   Gr.)  311 

Ind.  393  (1881) ;  Hiatt  v.  Goblt,  18  (1877). 


323  ALLEGIN-G    OWNERSHIP    OF   [MORTGAGE.        [§276. 

is  a  bond,  default  in  the  performance  of  its  conditions  must 
be  shown.'  Where  the  complainant  is  the  assignee  of  the 
claim,  the  assignment  of  the  note  and  mortgage  should  be 
averred,  but  it  is  not  necessary  to  set  out  a  copy  of  the 
assi^-nment,"  because  under  such  an  averment  the  complainant 
may  prove  an  indorsement,  and  the  transfer  and  delivery  of 
the  note  and  mortgage  to  him  in  that  manner.* 

Whatever  can  be  claimed  by  virtue  of  the  mortgage  must 
be  set  out  in  the  complaint  in  foreclosure,  for  a  demand  can 
not  be  split  and  made  the  basis  of  separate  suits.*  In  those 
cases,  however,  where  the  indebtedness  is  not  the  foundation 
of  the  action,  it  need  not  be  separately  described.*  Where 
there  is  a  stipulation  in  a  mortgage  for  the  payment  of  taxes 
and  assessments,  the  complaint  in  foreclosure  must  set  forth 
the  amount  of  taxes  and  assessments  paid  by  the  plaintiff 
for  which  judgment  will  be  asked.'  If  any  payments  have 
been  indorsed  upon  the  mortgage,  they  should  be  fuHv  set 
out  in  the  complaint,  because  w^here  no  reference  is  m<ide  to 
them  the  averments  can  not  be  aided  by  proof  of  such 
indorsements.' 

§  276.  Allegation  as  to  title  and  ownership  of  mort- 
gage.— In  a  complaint  to  foreclose  a  mortgage,  the  plaintiff 
should  show  ownership  of  it  either  as  mortgagee,  assignee  or 
otherwise.  It  is  not  necessary  to  aver  in  so  many  words  that 
the  defendant  has  title  to  the  mortgaged  premises;  ft  is 
sufficient  to  aver  the  making  of  the  mortgage  ;*  neither  is  it 
necessary  to  anticipate  any  defence.'     A  complaint  by  A.  in 


'  Coulter  V.  Bower,  64  How.  (N.  «  Hibernia     Savings     an.l     Loan 

Y.)  Pr.  132  (1882).  Society  v.  Conlin,  67  Cal.  178(1885). 

*  See  Green  v.  Marble,  37  Iowa,  ''  Xicliol  v.    Henry,    89    Jnd.    54 

95    (1873);    Barlbol  v.    Blakin,  34  (1883). 

Iowa,  452  (1872) ;  Nichol  v.  Henry,  *  Bull  v.  ]\reloney,    27  Conn.   560 

99  Ind.  54  (1883) ;    Kurtz  v.  Spon-  (^§58)  ;  Frink  v.  Branch,  16  Conn, 

able,  6  Kan.  395  (1870) ;  Andrews  v.  ^^^'  ^^^  (1844). 

McDaniel,    68    N.    C.    385    (1873).  "  ^""'^  v.  Branch,  16  Conn.  260, 

s  Mundy  v.  Whittemore,  15  Neb.  ^^^  ^^^^^ '  Palmer  v.  Mead,  7  Conn. 

647  (1884).  149,  157  (1828) ;  Spear  v.  Hadden, 

<  Vincent  V.  Moore,  51  Mich.  618  31   Mich.    205  (1875);  Cornelius  v. 

(1883).  Rahcy,  11   N.  J.  Eq.  (3  Stockt.)  27 

'  Risk  V.  Hoffman,  69    Ind.    133  (1855). 
(1879). 


§  277.]        ALLEGING    OWj^ESHIP   OF  MOETGAGE.  329 

the  usual  form,  to  foreclose  a  mortgage  given  to  A.  and  B.  to 
secure  a  note  payable  to  A.,  is  not  bad  for  want  of  sufficient 
allegations,  because,  if  objectionable  at  all,  it  is  for  want  oi 
proper  parties  plaintiff.'  In  an  action  to  foreclose  a  mort- 
gage given  to  secure  the  performance  of  the  conditions 
of  a  bond,  one  of  which  conditions  was  that  the  obligor 
should  pay  the  sum  for  which  a  note  had  previously  been 
given  to  the  plaintiff,  it  is  not  necessary  to  allege  in  the 
complaint  that  the  plaintiff  is  still  the  holder  of  the  note.* 

The  statute  of  Vermont  providing  for  foreclosure  by  peti- 
tion does  not  require  the  fullness  required  in  a  bill.  A 
general  and  comprehensive  statement  of  facts,  constituting 
the  ground  of  right  and  liability,  is  sufificient.  Thus,  where  a 
petition  for  foreclosure  by  an  assignee  of  a  mortgage, 
after  alleging  the  assignment  to  the  petitioner  and  delivery 
to  him  of  the  note  and  mortgage,  alleged  that  the  note  and 
mortgage  had  ever  since  been  and  still  were  his  property, 
and  that  he  was  the  holder,  owner  and  bearer  of  the  note, 
it  was  held  that  there  was  a  sufficient  allegation  of  title  to 
present  it  for  litigation  on  answer.* 

Where  by  a  clerical  error  the  name  of  the  mortgagee  is 
incorrectly  given  in  the  mortgage  and  in  the  notes  secured 
thereby,  it  is  not  necessary  to  set  out  such  error  in  the  com- 
plaint and  to  ask  to  have  the  instrument  reformed,  because 
the  mistake  may  be  explained  by  evidence  or  disregarded  as 
immaterial.* 

§  277.  Allegation  of  execution  and  delivery  of  mort- 
gage.— The  complaint  should  show  the  execution  and  deliv- 
ery of  the  mortgage,*  its  date  and  the  amount  due  thereon, 
the  parties  to  it  and  the  place  of  record,*  together  with  a 
description  of  the  premises  mortgaged.     An  allegation  that 


»  Chrismanv.  Chenoweth,  81  Ind.  »  See  Bull  v.  Meloney,  27  Conn. 

401(1882).  560   (1858);   Frink   v.    Branch,   16 

« I^Iatteson  v.  Matteson,   65  Wis.  Conn.  260,  268  (1844). 

450  (1882).  *  It  has  been  held  that  the  com- 

*  Sprague  v.  Rockwell,  51  Vt.  401  plaint  should  allege  that  the  mort- 
(1879).  gage  was  properly  recorded  at  the 

*  Germantown  Farmers'  Mut.  Ins.  proper  oflBce  ;  Magee  v.  Sanderson, 
Co.  V.  Dhein,  57  Wis.  521  (1883).  10  Ind.  261  (1858);  but  that  a  failure 


330  ALLEGING    EXECUTION    OF   IMORTGAGE.         [§  278. 

the  defendant  executed  the  instrument  sued  upon,  settint^ 
it  out  in  full,  is  equivalent  to  an  allegation  that  he  made  all 
the  covenants  and  promises  therein  contained,  and  assumed 
all  the  liabilities  thereby  created.'  And  it  has  been  held 
that  an  allegation  in  a  complaint  to  foreclose,  that  the 
defendant  "  made,  executed,  acknowledged  and  delivered 
a  certain  deed  of  mortgage,"  is  sufficient  and  can  only  be 
construed  to  mean  that  the  mortgage  was  properly  made 
and  valid  in  its  operation  ;*  but  that  an  allegation  that  "  the 
defendant  gave  a  mortgage  "  is  simply  a  conclusion  of  law. 
If  the  mortgage  is  not  set  out  in,  or  made  a  part  of,  the 
complaint,  it  will  be  insufficient  to  authorize  a  decree  for 
the  sale  of  the  premises  upon  default  in  answering.* 

In  an  action  by  a  mortgagee,  against  the  mortgagor  and  a 
subsequent  purchaser,  to  foreclose  a  mortgage  on  real  estate, 
the  complaint  alleged  that  the  mortgage  had  been  duly  exe- 
cuted and  recorded,  setting  out  a  copy  of  the  mortgage, 
which  did  not  show  a  certificate  of  acknowledgment.  On 
demurrer  it  was  held  that  the  acknowledgment  was  no  part 
of  the  cause  of  action,  and  a  copy  thereof  was  not  necessary, 
and  that  the  reasonable  inference  from  the  averments  of 
the  complaint  was,  that  the  mortgage  had  been  duly  acknowl- 
edged. If  such  was  not  the  case,  the  want  of  an  acknowl- 
edgment should  have  been  set  up  affirmatively  as  a 
defence.* 

§  278.  Description  of  note  or  bond. — If  a  bond  has  been 
given  with  the  mortgage,  it  should  be  briefly  set  out  in  the 
complaint,  together  with  the  terms  and  conditions  of  both 
instruments.  If  the  note  set  out  in  the  complaint  does  not 
correspond  with  that  described  in  the  mortgage,  but  the 
complaint  shows  that  this  is  a  mere  error  in  description,  and 
that  the  mortgage  was  designed  to  secure  the  note  described 


to  allege  such  recording  of  the  mort-  (1864) ;  McAllister  v.  Plant,  54  Miss, 

gage  will  be  cured  by  proof  thereof  106  (1876). 

at  the  trial  without  objection  ;  Lyon  ^  Hussey  v.  Hussey,  1  Utah,  241 

V.  Perry,  14  Ind.  515  (1860).  (1875). 

'  Budd  V.  Kramer,  14  Kan.   101  ■*  Sturgeon  v.  Board  of  Commis- 

(1874).  sioners,  65  Ind.  302  (1879). 

« Moore    v    Titman.    33  III.   358 


§  278.]  DESCRIBING   NOTE   OE   BOND.  831 

in  such  complaint,  it  states  a  good  cause  of  action.*  And 
where  the  note  secured  by  the  mortgage  is  imperfectly- 
described  in  the  complaint,  if  such  note  be  filed  with  the 
complaint,  and  alleged  to  be  the  note  which  the  mortgage 
was  given  to  secure,  and  this  allegation  is  proved  on  the 
trial,  the  defective  description  will  thereby  be  cured.'  Where 
the  variance  between  the  note  described  in  the  mortgage 
and  the  note  introduced  in  the  suit  is  not  due  to  a  misdescrip- 
tion, but  only  to  an  imperfect  description,  the  note  will  be 
sufficiently  identified,*  and  such  variance  will  be  no  objection 
to  the  introduction  of  the  note  in  evidence.* 

The  note  or  bond  and  the  mortgage  securing  the  same, 
are  usually  made  parts  of  the  complaint  in  some  manner. 
Copies  of  them  may  be  set  out  in  the  complaint  or  annexed 
thereto.  It  is  not  sufficient  merely  to  file  the  originals  or 
copies  thereof  with  the  complaint  without  referring  to  them 
and  making  them  a  part  of  it  ;*  it  will  be  sufficient,  however, 
if  the  bill  sets  out  the  substance  of  the  mortgage  debt  ;*  it 
should  show  that  the  mortgage  was  executed  for  a  valuable 
consideration,^  although  it  is  not  necessary  that  there  be 
literal  exactness  in  describing  the  debt  secured.  A  statement 
that  the  mortgage  was  given  to  secure  notes  amounting  to  a 
specified  sum,  drawing  a  certain  named  interest,  and  held  by 
designated  individuals,  upon  which  notes  persons  named  are 
sureties,  has  been  said  to  be  a  sufficient  description.*  And 
where  the  plaintiffs  have  a  joint  or  a  several  interest  in  the 
money  advanced  upon  the  mortgage,  that  fact  should  be 
alleged  in  the  complaint  and  the  decree  should  be  made  to 


•  Dorsch  V.  RosenthaU,  39  Ind.  209  23  Ind.  397  (1864)  ;  Hiatt  v.  Goblt, 
(1872);  Merchants'  Nat.  Bank  v.  18  Ind.  494  (1862);  Triplett  v. 
Raymond,  27  Wis.  567  (1871).  Sayre,    3  Dana  (Ky.)  590    (1885)  ; 

2  Cleavenger  v.  Beath,  53  Ind.  172  Harlan  v.  Murrell,  3  Dana  (Ky.)  180 
(1876).     See  Hadley  v.   Chapin,  11  (1835). 

Paige  Ch.  (N.  Y.)  245  (1844).  •  Cecil  v.  Dynes,  2  Ind.  266  (1850). 

3  Boyd  V.  Parker,  43  Md.  182  '  Withers  v.  Little,  56  Cal.  870 
(1875).  (1880). 

*  Hough  V.  Bailey,  82  Conn.  288  «  ^tna  Life  Ins.  Co.  v.  Finch,  84 
(1864).  Ind.    301    (1882).     See    Ogbom    v. 

"  Brown  v.  Shearon,   17  Ind.  239  Eliason,  77  Ind.  393  (1881). 
(1861).     See  Dumell   v.   Terstegge, 


332  INTEREST    OF    SUBSEQUENT    PURCHASERS.      [§279. 

conform  therewith.'  So,  where  a  mortgage  describes  the 
note  it  secures  by  giving  the  date,  the  amount,  the  time  of 
payment,  and  the  rate  of  interest  thereof,  it  seems  that  such 
description  in  the  complaint  will  be  sufficient  without  giving 
the  name  of  the  maker.'  But  a  failure  to  set  out  the  note 
or  bond  and  the  mortgage  properly  in  the  complaint,  is  a 
defect  which  will  be  cured  by  the  verdict  of  a  jury  or  the 
findings  of  a  court.* 

§  279.  Allegation  against  mortgagor,  subsequent 
purchasers  and  co-defendants. — In  a  suit  against  the  mort- 
gagor alone,  the  complaint  need  not  allege  that  such 
mortgagor  has  not  conveyed  the  land,  or  that  the  mortgage 
has  been  duly  acknowledged  and  recorded  ;*  neither  is  it 
necessary  to  allege  title  to  the  mortgage,  for  the  mortgagor 
is  estopped  as  to  title,  as  the  only  purpose  of  the  action  is 
to  foreclose.'  But  where  an  action  in  foreclosure  is  brought 
against  a  subsequent  purchaser  of  the  fee,  if  the  complaint 
fails  to  allege  either  that  the  mortgage  was  on  record  at  the 
time  of  the  defendant's  purchase,  or  that  he  had  actual  notice 
of  such  mortgage,  it  will  be  defective,*  unless  it  is  averred 
that  such  subsequent  purchaser  assumed  and  agreed  to  pay 
the  mortgage  debt  as  a  part  of  the  purchase  money.'  In  a 
foreclosure  against  a  subsequent  purchaser,  a  failure  to  allege 
the  recording  of  the  mortgage  will  be  cured  by  proof  thereof 
at  the  hearing  without  objection.* 

Where  in  an  action  to  foreclose  a  mortgage  parties  other 
than  the  mortgagor  or  his  grantee  are  made  co-defendants,  if 
the  complaint  contains  an  allegation  that  such  co-defendants 


» Higgs  V.  Hanson,   13  Nev.  356  290  (1862) ;   Culph    v.   Phillips,   17 

(1878).  Ind.  209  (1861). 

*  Ogborn  v.  Eliason,  77  Ind.  393  ^  shed    v.    Garfield,     5    Vt.     39 
(1881).  (1838). 

*  Martin  t.  Holland,  87  Ind.   105  «  Peru  Bridge  Co.  v.  Hendricks, 
(1882) ;  Galvin  v.  Woollen,  66  Ind.  18  Ind.  11  (1862). 

464  (1879).  ■>  Scarry  v.  Eldridge,  63  Ind.  44 

*  St.  Marks  Ins.  Co.  v.  Harris,  13  (1878). 

How.  (N.  Y.)  Pr.  95  (1856):  Mar-  •  Lyon  v.  Perry,  14  Ind.  515  (1860). 

tens  V.  Rawdon,  78  Ind.  85  (1881) ;  See  Martens  v.  Rawdon,  78  Ind.  85 

Snyder    v,    Bunnell,    64    Ind.    403  (1881);    Faulkner  v.    Overturf,    49 

(1878) ;  Perdue  v.  Aldridge,  19  Ind.  Ind.  265  (1874) 


§.280.]  COMPLAINT    i:X    Is^EW    YORK.  833 

have  or  claim  to  have  some  interest  in  or  lien  upon  the 
mortgaged  premises,  which,  if  any,  is  subsequent  to  the 
plaintiff's  mortgage,  a  cause  of  action  will  be  sufficiently 
stated  without  averring  the  character  of  the  interests  claimed.' 
But  a  mere  averment  in  a  complaint  to  foreclose  against  a 
person  other  than  the  mortgagor,  that  "  he  is  now  the  owner 
of  the  land,"  has  been  held  not  to  be  sufficient  to  show  that 
the  mortgage  constitutes  a  lien  upon  the  land  as  against 
him,  because  he  may  have  acquired  title  to  the  land  by 
purchase  before  the  mortgage  was  executed.*  Where  any 
of  the  defendants  are  infants,  the  complaint  should  allege 
the  requisite  facts  to  show  the  interests  of  such  defendants.' 
An  allegation  in  a  complaint  that  a  mortgagor  was  seized 
or  pretended  to  be  seized  in  fee  simple  of  the  land  when  he 
executed  the  mortgage,  is  held  a  sufficient  allegation  that 
he  was  in  possession.*  And  where  the  complaint  to  foreclose 
does  not  state  the  real  consideration  for,  or  the  exact 
amount  due  upon,  the  mortgage,  a  decree  of  foreclosure 
will  be  authorized,  although  the  proofs  may  show  a  less  sum 
to  be  due  than  that  which  was  claimed,  or  a  state  of  facts  not 
averred  in  the  complaint,  if  the  facts  shown  are  not  incom- 
patible with  the  allegations  in  the  complaint.* 

§  280.  Complaint  under  New  York  practice.— Under 
the  rules  prescribed  by  the  New  York  Code  of  Civil  Pro- 
cedure the  facts  constituting  the  cause  of  action,  and  not  the 
evidence  of  the  facts,  should  be  stated  in  the  complaint.* 
Under  this  rule  it  is  improper  to  set  out  the  mortgage  and 


»  Frost  V.  Koon,  30  N.  T.  428,  448  »  Nichol    v.   Henry,   89    Ind.    54 

(1864) ;  Drury  v.  Clark,  16  How.  (N.  (1883). 

Y.)  Pr.  424  (1857) ;  Anthony  v.  Nye,  »  AUlrich  v.  Lapham,  6  How.  (K 

30  Cal.  401  (1866)  ;  Poett  v.  Stearns,  Y.)  Pr.  129  (1850)  ;  s.  c.  1  Code  Rep. 

28  Cal.  226   (1865);  Woodworth  v.  (N.  S.)  408.     See  post  %286. 

Zimmerman,    92    Ind.   349    (1883) ;  *  Holman  v.  Bank  of  Norfolk,  12 

Marot  V.  Germania  Assoc,  54  Ind.  Ala.  369  (1847). 

37    (1876) ;    Bowen    v.   Wood,    35  "  Collins  v.    Carlile,    13   III.    254 

Ind.  268  (1871) ;  Case  v.  Bartholow,  (1851). 

21    Kan.    300    (1878) ;    Nooner    v.  ^  Floyd  v.  Dearborn,  2  X.  Y.  Code 

Short,  20  Kan.  624  (1878) ;  Seager  v.  Ecp.  17  (1849).     See  N.  Y.  Code  Civ. 

Burns,  4  Jlinn.  141  (1860) ;  Rice  v.  Proc.  §  481. 
Hall.  41  Wis.  453  (1877). 


334  ACTION    BY    OR    AGAINST   EXECUTOR.  [§  28],. 

the  bond  or  note  it  secures  at  length  ;  and  while  the  bond 
and  mortgage  should  be  correctly  described  in  the  complaint, 
a  merely  technical  variance  will  be  disregarded.*  The  breach 
of  condition,  which  gives  the  right  to  foreclose  the  mort- 
gage, as  well  as  the  amount  of  the  plaintiff's  debt  due, 
must  be  fully  alleged.'  The  assignment  of  a  mortgage, 
which  was  executed  without  a  bond  or  note,  passes  the  title 
to  the  debt;  and  the  complaint  in  an  action  to  foreclose  such 
a  mortgage  will  be  sufficient,  if  it  alleges  that  the  mortgage 
was  given  to  secure  the  mortgage  debt  and  sets  out  the  con- 
ditions of  the  mortgage  and  its  assignment  to  the  plaintiff.* 

§  281.  Allegation  by  or  against  administrator,  execu- 
tor or  trustee. — The  complaint  in  an  action  against  an 
executor  to  enforce  the  lien  of  a  mortgage  executed  by  his 
decedent,  need  not  aver  that  notice  has  been  given  to  the 
creditors  of  the  deceased,  but  it  must  aver  that  the  mortgage 
claim  has  been  duly  presented  to  the  administrator  for 
allowance.*  Where  the  mortgage  sought  to  be  foreclosed 
purports  to  be  executed  by  an  executor  and  trustee  in  his 
representative  capacity,*  the  complaint  need  not  allege  that 
the  defendant  was  in  fact  such  executor  and  trustee,  nor  the 
facts  relating  to  his  appointment  and  authority  to  execute 
the  mortgage,*  because  such  executor  and  his  grantees  are 
estopped  from  denying  his  appointment  and  authority.'' 

But  the  rule  is  different  where  one  sues  as  executor  or 
administrator,  in  which  case  he  must  set  forth  in  full  his 
appointment  and  authority  to  bring  the  foreclosure.* 


>  See  Hadley  v.  Champin,  11  Paige  »  Kingsland  v.  Stokes,  25  Hun  (N. 

Ch.  (N.  y.)  245  (1844).  T.)  107  (1881). 

«  Second  American  Building  Asso-  «  White  v.  Joy,  13  N.  Y.  87  (1855); 

ciation  v.  Piatt,  5  Duer  (N.  Y.)  675  Skelton  v.   Scott,  18  Hun  (N.  Y.) 

(1856) ;  Cornelius  v.  Halsey,  UN.  375  (1879). 

J.  Eq.  (3  Stockt.)  27  (1855).  '  Tefft  v.  Munson,  57  N.  Y.  97 

»  Severance  v.  Griffith,  2  Lans.  (N.  (1874) ;  Kingsland  v.  Stokes,  25  Hun 

Y.)  38  (1870).     See  Coleman  v.  Van  (N.  Y.)  107  (1881) ;  Skelton  v.  Scott, 

Rensselaer,  44  How.  (N.  Y.)  Pr.  368  18  Hun  (N.  Y.)  375  (1879) ;  Jackson 

(1873) ;  Caryl  v.  Williams,  7  Lans.  v.  Parkhurst,  9  Wend.  (N   Y )  209 

(N.  Y.)  416  (1873).  (1832). 

*  Harp  V.   Calahan,   46   Cal.    223  «  Kingsland  v.    Stokes,  58  How. 

(1S73).  (N.  Y.)  Pr.  1  (1879);  s.  c.  aff'd  25  Hun 


282.] 


MORTGAGE   DUE    ON    DEMAND. 


335 


§  282.     Allegation  where  money  due  on  demand.— In  a 

complaint  to  foreclose  a  mortgage  securing  a  note  payable 
on  demand  generally,  and  not  at  a  particular  place,  the  mort- 
cra^ee  having  a  right  to  foreclose  the  mortgage  at  any  time 
need  not  allege  a  previous  demand  before  commencement  of 
the  suit;  the  filing  of  the  complaint  is  a  sufficient  demand 

It  is  well  settled  where  a  demand  note  is  made  payable  at 
a  particular  place  and  secured  by  mortgage,  that  in  an  action 
to  foreclose  such  mortgage,  it  is  not  necessary  to  make  or 
allege  a  demand  of  payment  at  the  place  designated  for  pay- 
ment.*    This  rule  is  based   upon   the  principle  that  where 


(N.  Y.)  107  (1881) ;  61  How.  (N.  Y.) 
Pr.  494.  See  also  White  v.  Joy,  13 
N.  Y.  83  (1855) ;  Peck  v.  Mallams, 
10  N.  Y.  509  (1853);  Forrest  v. 
Mayor  of  N.  Y.,  13  Abb.  (N.  Y.)  Pr. 
350  (1861) ;  Wheeler  v.  Dakin,  12 
How.  (N.  Y.)  Pr.  537  (1856) ;  Shel- 
don V.  Hoy,  11  How.  (N.  Y.)  Pr.  11 
(1855) ;  Beach  v.  King,  17  Wend. 
(N.  Y.)  197  (1837).  As  to  forms  in 
pleading  by  an  executor,  see  Moir 
V.  Dodson,  14  Wis.  279  (1861). 

1  Wright  V.  Shumway,  1  Biss.  C. 
C.  23  (1853)  ;  8.  c.  2  Am.  L.  Reg. 
(O.  S.)  20. 

«  Haxtun  v.  Bishop,  3  Wend.  (N. 
Y.)  13  (1829).   See  Locklin  v.  Moore, 
57  N.  Y.  360  (1874) ;  Gillett  v.  Bal- 
colm,  6  Barb.  (N.  Y.)  370  (1849) ; 
Harris  v.  Mulock,  9  How.  (N.  Y.) 
Pr.  402  (1853) ;  Bank  of  Niagara  v. 
McCracken,  18  Johns.  (N.  Y.)  493 
(1821) ;  Gammon  v.  Everett,  25  Me. 
66  (1845) ;  8.  c.  43  Am.  Dec.  255  ; 
McKenney  v.  Whipple,  21  Me.  98 
(1842) ;    Bryant     v.     Damariscotta 
Bank,  18  Me.  241  (1841) ;  State  Bank 
V.  VanHorn,  4  N.  J.  L.  (1  South.) 
382  (1817) ;  Union  Cent.  Life  Ins, 
Co.  V.  Curtis,  35  Ohio  St.  343,  357 
(1880) ;  Smith  v,  Bythewood,  Rice 
(S.  C.)  L.  245  (1839) ;  s.  C.  33  Am. 
Dec.  Ill ;  Rumball  v.  Ball,  10  Mod. 
38  (1712).     See  also  Henley  v.  Bush, 


33   Ala.   636  (1859);    Niemeyer  v. 
Brooks,  44111.  77(1867) ;  Pennington 
V.  Clifton,  10  Ind.  172  (1858)  ;    Ros3 
V.  Lafayette  &  I.  R.  Co.,  6  Ind.  297 
(1855) ;    Wood  v.  Barstow,  27  Mass. 
(10  Pick.)  368  (1830);    Ilolden    v. 
Eaton,  24  Mass.  (7  Pick.)  15  (1828)  ; 
Lent  V.   Padelford,   10    Mass.    230 
(1813);  8.  c.  6  Am.  Dec.  119  ;  Wat- 
son V.  Walker,  23  N.  H.  (3  Fost.)  471 
(1851);    Thurston  v.   Wolfborough 
Bank,  18  N.H.  391  (1846);  s.c.  45  Am. 
Dec.    382;    Darling  v.   Wooster,   9 
Ohio  St.  517  (1859)  ;  Hill  v.  Henry, 
17  Ohio,  9  (1848);  White  v.  Swift,  1 
Cr.   C.   C.   442  (1807)  ;   AVyman  v. 
Fowler,  3  McL.  C.  C.  467  (1844). 

»  See  Wolcott  v.   VanSantvoord, 
17  Johns.  (N.  Y.)  248  (1819) ;  s.  c.  8 
Am.  Dec.  396  ;  Foden  v.  Sharp,  4 
Johns.  (N.  Y.)  183  (1809) ;  Ilaxtun 
V.  Bishop,  3  Wend.  (N.  Y.)  13  (1829); 
Butterfield  v.  Kinzie,  2111.  (1  Scam.) 
445  (1837) ;  Gammon  v.  Everett,  25 
Me.  66  (1845) ;  s.  c.  43  Am.    Dec. 
255  ;     Bacon   v.    Dyer,   12    Me.    (3 
Fairf .)  19  (1835) ;   Carley  v.  Vance, 
17  Mass.  389  (1821) ;  Washington  v. 
Planters'  Bank,  2  [Miss.  (1  How.)  230 
(1835) ;  8.  c.  28  Am.  Dec.  333  ;  East- 
man V.  Fifield,  3  N.  H.   333  (1826) ; 
s.  C.  14  Am.  Dec.  371  ;  Adams  v. 
Hackensack  Improvement  Co.,   44 
N.  J.  L.  (15  Vr.)  638  (1882) ;  s.  C.  43 


336 


ALLEGING    ASSIGNMENT    OF    MORTGAGE.        [§283. 


money  is  made  payable  by  the  agreement  of  the  parties, 
upon  demand,  or  at  a  specified  time  at  a  particular  place,  a 
demand  at  the  time  or  place,  prior  to  the  commencement  of 
the  suit,  is  not  necessary.  The  commencement  of  the  suit  is 
itself  a  sufficient  demand.'  But  where  the  defendant  was  at 
the  place  designated,  and  was  ready  and  offered  to  pay  the 
money,  he  may  plead  such  fact  in  exoneration  of  interest 
and  the  costs  of  the  suit,  provided  he  makes  his  tender  good 
by  payment  of  the  amount  of  the  debt  into  court.* 

§283.  Allegation  as  to  assignment  of  mortgage.— 
Where  the  assignee  of  a  mortgage  brings  an  action  for  fore- 
closure he  should  set  out  in  the  complaint  all  the  assignments 
thereof.  A  mere  allegation,  "  that  the  plaintiff,  by  several 
mesne  assignments,  is  the  owner  and  holder  of  the  note  and 
mortgage,"  without  other  allegations  showing  title  in  the 
plaintiff,  is  defective,  because  it  does  not  sufficiently  show 
the   assignments   of    the    mortgage.*     Where    a    complaint 


Am.  Rep.  406  ;  Wallace  v.  McCon- 
nel,  38  U.  S.  (13  Pet.)  186  (1839) ; 
bk.  10  L,  ed.  95  ;  Bank  of  United 
States  V.  Smith,  24  U.  S.  (11  Wheat.) 
171  (1836);  bk.  6  L.  ed.  443; 
Nicholls  V.  Bowes,  2  Campb.  498 
(1810) ;  Lyons  v.  Sundius,  1  Campb. 
423  (1808). 

'  Locklin  v.  Moore,  57  N.  Y.  360 
(1874) ;  Hills  v.  Place,  48  N.  Y.  520 
(1873) ;  Caldwell  v.  Cassidy,  8  Cow. 
(N.  Y.)  271  (1828) ;  Nelson  v.  Bost- 
"tv'ick,  5  Hill  (N.  Y.)  37  (1843); 
Wolcott  V.  VanSantvoord,  17  Johns 
(N.  Y.)  248  (1819) ;  s.  c.  8  Am.  Dec. 
890  ;  Haxtun  v.  Bishop,  3  Wend. 
(N.  Y.)  13,  15  (1829);  WatkLus  v. 
Crouch.  5  Leigh  (Va.)  522  (1834). 

*  Adams  v.  Hackensack  Improve- 
ment Co.,  44  N.  J.  L.  (15  Vr.)  638 
(1882)  ;  s.  c.  43  Am.  Rep.  406.  See 
also  Caldwell  v.  Cassidy,  8  Cow.  (N. 
Y.)  271  (1828)  ;  Haxtun  v.  Bishop,  3 
Wend.  (N.  Y.)  13  (1829)  ;  Wood  v. 
llerchants'  Saving,  Loan  and  Trust 
Co.,  41  111.  26'i  (1S66) ,  s.  c.  1  Am. 


Lead.  Cas.  478  ;  Carley  v.  Vance,  17 
Mass.  389  (1821) ;  Ward  v.  Smith, 
74  U.  S.  (7  Wall.)  447  (1868) ;  bk.  19 
L.  ed.  207.     See  ante  §  39. 

2  See  Rose  v.  Meyer,  7  N.  Y.  Cir. 
Proc.  Rep.  219  (1885) ;  s.  c.  1  How. 
(N.  Y.)  Pr.  N.  S.  274  ;  Thomas  v. 
Desmond,  12  How.  (N.  Y.)  Pr.  321 
(1855) ;  Pattie  v.  Wilson,  25  Kan. 
326(1881);  Lashbrooksv.  Hatheway, 
52  Mich.  124(1883) ;  Denton  v.  Cole, 
30  K  J.  Eq.  (3  Stew.)  244  (1878).  It 
is  held  in  some  cases  that  in  an 
action  by  the  assignee  to  foreclose  a 
mortgage,  it  is  not  necessary  to  set 
out  the  assignments  whereby  he 
acquired  the  title  to  the  instrument, 
and  that  it  is  sufficient  to  allege  in 
the  complaint  that  the  plaintiff  is  the 
assignee ;  Ercanbrack  v.  Rich,  2 
Chand.  (Wis.)  100  (1850) ;  s.  c.  2Pin. 
(Wis.)  441.  Yet  it  has  been  said  that 
a  complaint  by  an  assignee  to  fore- 
close a  mortgage,  which  merely  avers 
that  the  mortgage  was  endorsed  to 
him,  withoui  slating  by  whom,  is  not 


§  283.]       ALLEGmG   ASSIG2fMENT   OF  MOETGAGE.  33^ 

sets  forth  the  indebtedness  of  the  defendants  to  the  com- 
plainant's assignor  for  the  purchase  money  of  lands,  and  the 
execution  by  them  of  a  mortgage  to  secure  the  payment 
thereof  in  installments,  and  its  assignment  to  the  plaintiff,  it 
sufficiently  shows  the  plaintiff  to  be  the  owner  of  the  mort- 
gage debt  and  entitled  to  maintain  an  action  to  foreclose/ 
It  has  also  been  held,  where  the  assignee  of  a  mortgage 
files  a  complaint  for  foreclosure,  alleging  that  the  debt  is  due 
and  owing  to  him  and  that  he  is  ready  to  produce  the  note 
or  obiigation,  which  is  the  evidence  of  the  debt  the  mortgage 
was  given  to  secure,  that  this  is  sufficient  without  stating  that 
the  note  or  obligation  has  been  assigned  to  the  plaintiff.' 
As  a  mortgage  given  to  secure  a  note,  is  regarded  as  an  inci- 
dent thereto,  and  passes  with  every  transfer  of  such  note 
■without  a  specific  assignment  of  the  mortgage,  it  is  not  neces- 
sary to  aver  an  assignment  of  such  mortgage  in  a  foreclosure 
thereof.'     The  complaint  need  not  aver  the  record  of  the 
assignment,"  because  the  record  of  such  assignment  is  not 
necessary  to  the  validity  of  the  plaintiff's  claim."     The  fact 
that  the  assignee  holds  the  mortgage  merely  as  a  collateral 
security,  does  not  affect  his  right  to  recover ;  it  simply  limits 
his  interest  in  the  proceeds  of  the  sale.'     A  mortgage  given 
to  indemnify  the  mortgagee  against  a  contingent  liability  is 
assignable,  and  an  action  thereon    may  be    maintained  by 

good  as  against  a  demurrer  for  defect  (1859) ;  McMillan  v.  Richards,  9  Cal. 

of  parties,  because  the  mortgagee  is  365  (1858) ;  s.  c.  70  Am.  Dec.  655 ; 

not  made  a  defendant;   Kichol  v.  Bennett    v.    Solomon,    6    Cal.    134 

Henry,  89  Ind.  54  (1883).  (1856).     See  Hagerman  v.  Sutton.  91 

'  Severance  v.  Griffith,  2  Lans.  (N.  Mo.  519  (1887) ;  Bell  v.  Simpson,  75 

Y.)  38  (1870).     See  also  Ercanbrack  Mo.  485  (1882) ;  Child  v.  Singleton, 

V.  Rich,  2  Chand.  (Wis.)  100  (1850) ;  15  Nev.  461  (1880).    The  indorsement 

B.  c.  2  Pin.  (Wis.)  441.  without  recourse  of  a  note  secured 

*Corneliusv.  Halsey,  UN.  J.  Eq.  by  a   deed  of    trust,   carries   with 

(3  Stockt.)  27  (1855).     See  Buckner  it  the  trust  deed  as  a  security  ;  Bell 

V.  Sessions,  27  Ark.  219  (1871) ;  Bab-  v.  Simpson,  75  Mo.  485  (1882). 

bitt  V.  Bowen,  32  Yt.  437  (1859).  *  King  v.  Harrington,  2  Aik.  (Vt.) 

*  Johnson  v.  Johnson,  81  Mo.  331  33  (1826). 

(1884) ;  Ord  v.  McKee,  5  Cal.  515  « Fryer  v.  Rockefeller,  63  N.  Y. 

(1855).     See  Koch  v.  Briggs,  14  Cal.  268  (1875). 

256    (1859) ;    8.    c.    73   Am.    Dec.  « McKinney  v.   Miller,   19  Mich, 

651  ;    Haffley  v,  Maier,  13  Cal.  13  142  (1869). 


ooS  MORTGAGE    SEGURmG    SEVERAL    l^^OTES.        [^  284. 

the  assignee,  in  his  own  name,  upon  the  accruing  of  such 
liabiHty.* 

Where  upon  the  settlement  of  an  estate  the  residue  con- 
sists in  part  of  a  note  and  mortgage,  it  may  be  assigned  in 
that  form  to  the  persons  entitled  thereto.'  The  assignment 
will  have  the  effect  of  an  order  of  distribution,  and  transfer 
the  title  to  the  persons  named,  and  they  may  foreclose  the 
mortgage.' 

§  284.    Allegation  on  mortgage  securing  several  notes. 

— A  mortgage  constitutes  a  single  cause  of  action,  however 
many  notes  or  installments  it  may  secure.*  It  is  said  that  in  an 
action  to  foreclose  such  a  mortgage,  it  is  proper  to  embrace 
in  a  single  paragraph  of  the  complaint  the  mortgage  and  all 
the  notes  secured  by  it ;  and  if  a  copy  of  one  note  only  is 
given,  the  complaint  will  nevertheless  be  good  upon  demurrer.* 
The  joinder,  in  one  paragraph  of  the  complaint,  of  several 
matured  and  unmatured  promissory  notes,  secured  by  a 
mortgage  on  real  estate,  in  an  action  on  the  notes  and  to  fore- 
close the  mortgage,  is  not  an  error  that  can  be  taken  advan- 
tage of  after  judgment.* 

Where  the  holder  of  one  of  several  notes  secured  by  a 
mortgage,  brings  an  action  to  foreclose  for  the  payment  of 
his  note  alone,  he  should  state  in  his  complaint  whether  the 
other  notes  have  been  paid,  and  if  they  have  not  been  paid, 
he  should  give  the  names  of  the  persons  by  whom  they  are 
held  and  the  time  when  they  mature,  in  order  that  the  rights 
of  such  holders  of  other  notes  may  be  determined  and 
protected  by  the  court.'  The  foreclosure  of  such  a  mortgage 
by  the  holder  of  one  note  will  not  be  a  bar  to  a  separate 
action  and  decree  by  the  holder  of  other  notes.*  And  it  has 
been  said,  where  a  person  holds  all  of  the  notes  secured  by  a 


1  Carper  v.  Munger,  63  Ind.  481  •  Firestone  v.  Klick,  67  Ind.  309 

(1878).  (1879). 

■'  See  Ind.  Rev.  Stat.  §§  3940,  3942.  '  Hartwell  v.  Blocker,  6  Ala.  581 

2  Ford    V.    Smith,    60    Wis.    222  (1S44)  ;  Levert  v.  Redwood,  9  Port. 
(1884).  (Ala.)  79  (1839). 

*  Hannoii  v.  Hilliard,  101  Ind.  310  «  Moffitt   v.    Roche,    76    Ind.   75 

(18S4).  (1881). 
^  Luck  V.  Axt,  85  Ind.  512  (1882). 


§  285.]        ALLEGING   ACTION    AT   LAW    ON   BOND.  339 

mortgage,  that  he  will  not  be  obliged  to  foreclose  for  all  of 
them ;  but  that  he  may  enter  a  decree  of  foreclosure  as  to 
part  of  them,  and  recover  in  a  suit  at  law  on  the  others.' 

Where  a  plaintiff  holds  several  notes  secured  by  the  same 
mortgage,  only  a  portion  of  which  are  due,  he  should  ask  in 
his  complaint  that  so  much  of  the  debt  as  may  become  due 
before  the  final  decree  shall  be  entered  in  the  case,  shall  be 
included  in  such  decree.'  It  will  be  error  to  adjudge  in  favor 
of  the  plaintiff  the  foreclosure  of  a  mortgage  for  the  pay- 
ment of  a  note  which  matures  after  the  filing  of  the  com- 
plaint, without  some  foundation  being  laid  in  the  pleadings 
therefor.* 

An  action  can  not  be  commenced  to  foreclose  a  mortgage 
securing  several  notes  where  none  of  them  are  yet  due  ;*  but 
where  one  or  more  are  due  and  an  action  has  been  properly 
commenced,  additional  relief  may  be  had  under  the  decree 
for  rights  that  may  accrue  after  the  commencement  of  the 
action.* 

§  285.  Allegation  as  to  proceedings  at  law— Rules  in 
New  York  and  Wisconsin.— The  New  York  Code  of  Civil 
Procedure  requires  that  the  complaint  in  an  action  to  foreclose 
a  mortgage  upon  real  property,  must  state  whether  any  other 
action  has  been  brought  to  recover  any  part  of  the  mortgage 
debt,  and  if  such  an  action  has  been  brought,  whether  any 
part  thereof  has  been  collected  ;'  and  that  "  where  final  judg- 
ment  for  the  plaintiff  has  been  rendered,  in  an  action  to  re- 
cover any  part' of  the  mortgage  debt,  an  action  shall  not  be 
commenced  or  maintained  to  foreclose  the  mortgage,  unless 
an  execution  against  the  property  of  the  defendant  has  been 
issued,  upon  the  judgment,  to  the  sheriff  of  the  county  where 
he  resides,  if  he  resides  within  the  state,  or,  if  he  resides  with- 
out the  state,  to  the  sheriff  of  the  county  where  the  judgment 


'  Langdon  v.  Paul,    20   Vt.   217  *  McCollough  v.  Colby,  4  Bosw. 

(1848).  (N.  Y.)  603  (1859). 

»  Malcolm  v.  Allen,  49  N.  Y.  448  ^  Bostwick  v.  Menck,  8  Abb    (N 

(1872) ;  Williams    v.    Creswell,    51  T.)  Pr.  N.  S.  169  (1869)';  Candler  v' 

Miss.  817  (1876).  Pettit,   1    Paige  Cli.    (N.    Y.)    168 

•Williams  v.  Creswell,  51  Miss.  (1828). 

817(1876X  •  N.  Y.  Code  Civ.  Proc.  §  1629. 


340  ALLEGIXa    ACTION   AT-  LAW    ON    BOND.        |_§  1*85. 

roll  is  filed  ;  and  has  been  returned  wholly  or  partly  unsatis- 
fied."* An  averment  in  a  petition  that  no  other  proceedings 
have  been  had  for  the  recovery  of  the  debt  secured  by  the 
mortgage,  is  a  sufificient  allegation  to  show  that  no  action  at 
law  has  been  commenced.' 

Where  proceedings  have  been  instituted  for  the  collection 
of  the  debt,  independent  of  the  action  for  foreclosure,  the 
complaint  should  state  what  those  proceedings  were  and 
against  whom  instituted ;  and  should  show  further  that  such 
proceedings  have  been  discontinued,  or  that  the  remedy 
thereby  has  been  exhausted.*  But  the  proceedings  to  foreclose 
a  mortgage  will  not  be  stayed  because  a  suit  at  law  has  been 
commenced  upon  the  bond,  even  though  it  appears  that  such 
suit  has  not  been  discontinued.*  If  it  appears  from  the  com- 
plaint in  a  foreclosure  suit  that  judgment  has  been  recovered 
for  the  mortgage  debt,  or  that  the  mortgage  was  given  as 
collateral  security  for  the  payment  of  a  note  whiclj  was 
already  in  judgment,  the  plaintiff  must  show  that  he  has 
exhausted  his  remedy  at  law  upon  the  judgment ;  otherwise 
the  defendant  in  the  foreclosure  suit  may  demur  to  the 
complaint,  or  may  raise  the  objection  by  his  answer.* 

The  Wisconsin  doctrine,  however,  would  seem  to  be  that 
a  bill  to  foreclose  a  mortgage,  which  states  that  no  proceed- 
ings have  been  had  to  collect  the  debt,  will  be  held  good  on 
demurrer  for  failure  to  state  what  part  of  the  debt  has  been 
collected,  because  an  allegation  in  that  behalf  is  necessary 
only  where  proceedings  have  been  had  at  law.*  In  this  case 
the  bill  stated  that  the  bond  and  collateral  mortgage  had 
been,  for  a  valuable  consideration,  assigned  to  the  com- 
plainant, and  were  held  and  owned  by  him.    The  court  say: 


'  K  Y.  Code  Civ.  Proc.  §  1630.  »  Lovett     v.      German     Reform 

*  Mundy  v.  Whittemore,  15  Neb.  Church,  12  Barb.  (N.  Y.)  67  (1851) ; 
647  (1884).  Shufelt  v.  Shufelt,  9  Paige  Ch.  (N.  Y.) 

»  Lovett     V.      German     Reform  137  (1841) ;  s.  c.  37  Am.  Dec.  389  ; 

Church,  12  Barb.  (N.  Y.)  67  (1851) ;  North    River    Bank    v.   Rogers,  8 

Williamson  v.  Champlin,  Clarke  Ch.  Paige  Ch.  (N.  Y.)  648  (1841). 

(N.  Y.)  9  (1839) ;  Pattison  V.  Powers,  «  Ercanbrack  v.  Rich,   2  Chand. 

4  Paige  Ch.  (N.  Y.)  549  (1834).  (Wis.)  100  (1850);  s.  c.  2  Pin.  (Wis.) 

*  Williamson  v.  Champlin,  Clarke  441. 
Ch.  (N.  Y.)  9  (1839). 


§§286-287.]        COLLATERAL    ASSIGNMENT.  341 

"This  was  enough  to  entitle  liim  to  sue.  He  was  not  bound 
to  set  forth  the  evidence  of  his  right.  The  objection  that  it 
does  not  appear,  that  no  part  of  the  debt  has  been  coljectcd, 
is  not  appHcable,  as  the  bill  states  that  no  proceedings  had 
been  had  at  law,  and  it  is  only  when  such  proceedings  have 
been  had,  that  it  is  necessary  to  show  what  has  been  col- 
lected.'" 

§  286.  Allegation  where  there  are  infant  defendants. — 
In  an  action  to  foreclose  a  mortgage,  where  some  of  the 
defendants  are  infants,  the  complaint  must  allege  the  requi- 
site facts  to  show  what  the  interests  of  such  infant  defendants 
in  the  premises  are;  and  the  facts  entitling  the  complainant 
to  a  judgment  for  foreclosure  and  sale  must  be  set  up  in  the 
complaint  and  established  by  the  proof,  because  they  are 
never  deemed  admitted  where  there  are  infant  defendants.' 

§  287.  Allegation  where  mortgage  collaterally  as- 
signed.— In  the  foreclosure  of  a  mortgage  by  a  plaintiff  to 
whom  the  mortgage  has  been  assigned  as  collateral  security, 
the  complaint  should  set  forth  all  the  circumstances  of  such 
assignment  and  the  respective  interests  of  all  parties;  and 
in  case  of  the  sale  of  the  mortgagee's  interest  in  such  action, 
the  surplus,  if  any  remains  after  satisfying  the  interest  of  the 
plaintiff,  must  be  refunded  to  the  mortgagee.'  Any  arrange- 
ment between  the  mortgagor  and  the  collateral  assignee  of 
the  mortgage,  to  discharge  the  mortgage  of  record  to  the 
injury  of  the  mortgagee,  will  be  void  as  to  him,  and  he  will 
be  entitled  to  recover  the  balance  of  the  mortgage  debt  due 
him  after  deducting  the  amount  for  which  the  mortgage 
was   pledged.*     The    foreclosure    of  the    mortgage    by  the 


>  Ercanbrack  v.  Eich,  2  Chand.  7  Johns.  Ch.  (N.  T.)  40  (1823) ;  s.  c. 

(Wis.)  100  (1850);  s.  c.  2  Pin.  (Wis.)  aff'd  in  Clark  v.  Henry,  2  Cow.  (N. 

441.  Y.)  324  (1823)  ;  Coffin  v.  Loring,  91 

»  Aldrich  v.  Lapham,  6  How.  (N.  Mass.  (9  Allen),  154  (1864);  Graydon 

T.)  Pr.  129  (1850) ;  s.  c.  1  N.   Y.  v.  Church,  7  Mich.  36  (1859).      See 

Code    Rep.    K    S.    408.     See  alfeo  an^e  §^87-89,  181,  182. 
Livingston  v.  Tanner,  12  Barb.  (N.  *  jjoyt  v.  Martense,  16  ]SI.  Y.  231 

Y.^  481  (1852).  (1857);    Slee  v.    Manhattan   Co.,    1 

'See    Johnson    v.    Blydenburgh,  Paige  Ch.   (N.    Y.)  48,    78    (1828); 

31  N.  Y.  427  (1865) ;  Henry  v.  Davis,  Cutts  v.  New  York  Manuf.  Co..  18 


34:2  ALLEGIJSG    COLLATERAL   ASSIGNMENT.  [§287. 

collateral  assignee  thereof  will  not  affect  the  relation 
existing  between  tiie  mortgagor  and  the  mortgagee,  in  re- 
spect to  the  debt  between  them.' 

Where  a  mortgage  has  been  assigned  as  collateral  security 
for  the  debt  of  a  third  person,  it  may  be  foreclosed  by 
the  pledgee.'  In  a  foreclosure  by  the  assignee  of  the  mort- 
gage, the  complaint  should  set  out  the  fact  of  the  assign- 
ment of  {he  mortgage  to  him  as  collateral  security  for  the  debt 
of  a  third  person,  designating  the  person,  and  aver  that  the 
debt  is  due  and  has  not  been  paid.  The  prayer  should  be  for 
the  sale  of  the  mortgaged  premises  to  pay  the  debt,  which  the 
mortgage  was  assigned  to  secure,  and  the  costs  of  suit ;  and 
the  decree  should  direct,  after  the  payment  of  the  debt  set 
out  and  the  costs  of  the  suit,  that  the  balance,  if  any,  be 
brought  into  court  to  be  disposed  of  as  the  interests  and 
rights  of  the  parties  may  require.  Such  foreclosure  of  a 
mortgage,  by  the  party  holding  the  same  as  collateral  security 
for  the  payment  of  the  debt  of  a  third  person,  does  not,  as 
between  the  assignee  and  the  party  placing  the  mortgage  in 
his  hands,  necessarily  operate  as  a  payment  of  the  debt  for 
which  the  mortgage  was  pledged.  The  debt,  as  between 
the  pledgor  and  the  pledgee,  will  not  be  considered  paid  until 
the  property  mortgaged  has  been  actually  sold  and  con- 
verted into  money;'  because  on  such  foreclosures  the  land  is 
substituted  for  the  notes  and  mortgage  as  collateral  security.* 

In  an  action  brought  to  foreclose  a  mortgage,  given  to 
secure  a  bond  made  by  one  of  the  mortgagors  to  secure  the 
payment  of  certain  notes,  which  notes  were  held  by  the  mort- 
gagees as  collateral  security  for  an  over  due  indebtedness,  it 
is  not  necessary  for  the  complaint  to  allege  that  the  notes 
held  as  collateral  security  have  become  due,  for  a  failure  to 


Me.  (6  Shep.)  190,  201  (1841) ;  Solo-  Gray),   135    (1857) ;   8.   c.   69    Am. 

mon  V.  Wilson,  1  Whart.  (Pa.)  241  Dec.  239.     See  Stevens  v.  Denham 

(1836).    See  ante  %%  87,  181.  Institution  for  Savings,    129    Mass. 

'  Brown    v.    Tyler.   74    Mass.   (8  547,  549  (1880);  Montague  v.  Barton 

Gray),  135,  138  (1857)  ;  s.  c.  69  Am.  &  A.  R.  R.  Co.,  124  Mass.  242(1878); 

Dec.  239.  Whipple  v.   Blackington,  97  Mass. 

*  See  Stevens  v.  Dedham  Inst,  for  476,  478  (1867). 

Savings,  129  Mass.  547  (1880).  *  Montague  v.  Barton  &  A.  R.  R. 

«  Brown   v.    Tylei,     74  Mass.  (8  Co.,  124  Mass.  242,  245  (1878). 


§§  288-289.]    ALLEGING  EJECOED  OF  MOKTGAGE.  343 

comply  with  the  conditions  of  the  bond  creates  a  sufficient 
cause  of  action.' 

§  288.  Allegation  as  to  recordingf  mortgage  and 
subsequent  deeds. — The  complaint  in  an  action  to  foreclose 
a  mortgage  need  not  aver  that  the  mortgage  has  been 
recorded,"  where  the  action  is  between  the  original  parties  to 
the  mortgage,  or  their  assignees  or  legal  representatives;'  but 
generally,  in  an  action  to  foreclose  a  mortgage  against  a 
subsequent  purchaser  from  the  mortgagor,  the  complaint 
must  allege  that  the  mortgage  was  recorded  at  the  time  and 
place  prescribed  by  the  statute.* 

In  the  foreclosure  of  a  mortgage,  where  a  party  is  made 
a  defendant,  who  claims  the  mortgaged  premises  as  a  dona 
fide  purchaser  under  a  deed  given  subsequent  to  the  mort- 
gage, but  recorded  first,  and  the  plaintiff  claims  that  such 
deed  is  fraudulent,  he  must  set  forth  in  the  complaint  the 
facts  and  allegations  which  show  the  fraud ;  and  in  such  a 
case,  where  the  only  allegation  was  that  the  defendant 
claimed  an  interest  in  the  premises  "as  subsequent  purchaser, 
incumbrancer  or  otherwise,"  it  was  held  that  the  court  could 
not  consider  the  evidence  taken  to  show  the  fraudulent 
character  of  the  deed,  as  such  an  allegation  did  not  place  the 
defendant's  rights  in  issue.' 

§  289.  Allegation  to  bar  dower. — In  an  action  to  fore- 
close a  mortgage  executed  by  the  husband  alone,  during 
coverture,  the  widow's  dower  will  not  be  barred  where  she  is 
made  a  defendant,  and  the  complaint  simply  alleges  that 
she  claims  some  interest  in  the  premises  "as  a  subsequent 
purchaser,  or  incumbrancer  or  otherwise,"  for  in  such  a  case 
the  record  bars  only  whatever  interest,  if  any,  she  acquired 
subsequent  to  the  mortgage  ;'  a  prior  right  of  dower  in  such  a 


>  Troy  City  Bank  v.  Bowman,  19  "  Wurcherer  v.  Hewitt,  10  Mich. 

Abb.  (N.  Y.)  Pr.  18  (1865).  453  (1862).     See  also  Peck  v.  Mal- 

2  See  ante  %  279.  lams,  10  N.  Y.  509  (1853) ;  Thomas 

*  Snyder  v.  Bunnell,  64  Ind.  403  v.    Stone,   Walk.    Ch.   (Mich.)    117 

(1878).       See    South    Side    Planing  (1843) ;  Godfroy  v.  Disbrow,  Walk. 

Mill    Assoc.    V.    Cutler   &    Savage  Ch.  (Mich.)  260  (1848). 

Lumber  Co.,  64  Ind.  560  (1878).  «  Lewis  v.   Smith,   9  K   Y.  503 

•»  StockweU  V.  State,   101  Ind.   1  (1854) ;  s.  c.  61  Am.  Dec.  706 ;  11 

(1884)  Barb.  (N.  T.)  152 ;  12  Leg.  Obs.  193. 


Sii  ALLEGmG   defendants'    INTERESTS.  [§  290. 

case  will  not  be  cut  off,  if  the  complaint  merely  alleges  that 
her  interest  is  subsequent  to  the  mortgage,  and  an  objection 
is  properly  taken.'  The  dower  'provided  by  law  in  behalf 
of  the  wife  who  survives  her  husband  is  paramount  to  all 
conveyances,  contracts,  incumbrances,  debts  or  liabilities  of 
the  husband  executed  or  incurred  by  him  during  coverture,* 
unless  there  has  been  some  forfeiture,  release,  bar  or  satis- 
faction thereof  by  the  wife.' 

If  the  plaintiff  desires  to  cut  off  the  widow's  dower  by 
foreclosure  of  .the  mortgage  and  sale  of  the  property,  the 
complaint  should  state  the  facts  upon  which  the  question 
arises,  as  he  believes  they  exist,  according  to  the  rules  of 
equity  pleading.* 

§  290.  Allegation  as  to  defendants'  interests. — Where 
parties  other  than  those  directly  liable  for  the  mortgage  debt 
are  made  defendants  to  a  foreclosure,  it  is  necessary  for  the 
plaintiff  to  show  that  they  have  some  interest  in  the  equity 
of  redemption  which  makes  them  proper  parties  to  the  action. 
This  may  be  done  by  the  general  allegation  that  such 
defendants  have  or  claim  some  interest  in,  or  lien  upon, 
the  mortgaged  premises  which  is  subsequent  to  the  plaintiff's 
The  fact  that  the  interests  of  such  defendants 


See  Lee  v.  Parker,  43  Barb.  (N.  Y.)  s.  c.  43  Am.  Dec.  754  ;  Hitchcock  v. 

611,  614  (1865).  Harrington,   6  Johns.   (N.  Y.)  290 

1  Jordan  v.  VanEpps,  85  N.   Y.  (1810) ;  s.  c.  5  Am.  Dec.  229  ;  Cat- 

427,  436  (1881).     See  Emigrant  In-  lin  v.  Ware,  9  Mass.  218  (1812) ;   s. 

dustrial  Sav.  Bank  v.  Goldman,  75  c.  6  Am.  Dec.  57 ;  Popkin  v.  Bum- 

N.  Y.   127  (1878);    Frost  v.  Koon,  stead,  8  Mass.  491  (1812);    s.   c.  5 

30  N.  Y.  428,  448  (1864) ;  Lewis  v.  Am.  Dec.  491  ;  English  v.  English, 

Smith,  9  N.  Y.  502  (1854) ;  61  Am.  3  N.   J.    Eq.    (2   H.    W.    Gr.)    504 

Dec.  706 ;   Keeler  v.  McNierney,  6  (1836) ;    s.    c.    29    Am.    Dec.    730 ; 

N.  Y.  Civ.  Proc.  Rep.   363  (1883);  Gordon  v.    Stevens,  2  Hill  (S.   C.) 

Payn  v.  Grant,  23  Hun  (N.  Y.)  134  Eq.  46  (1834) ;   s.  c.  27  Am.  Dec. 

(1880).     See  ante  %%  135,  136.  445. 

*  Higginbotham    v.    Cornwcll,    8  ■*  Lewis  v.   Smith,  9  N.  Y.    502, 

Gratt.  (Va.)  83  (1851) ;  s.  c.  56  Am.  515  (1854) ;  s.  c.  61  Am.  Dec.  706. 
Dec.  leo.  5  Drury  y.  Clark,  16  How.  (N.  Y.) 

3  O'Brien   v.    Elliott,  15  Me.    125  Pr.  424  (1857) ;  Aldrich  v.  Lapham, 

(1838) ;  s.  c.  32  Am.  Dec.  137.      As  6    How.   (N.    Y.)    Pr.    129    (1850) ; 

to  when  dower  is  barred,  see  Church  s.  c.  1  N.  Y.  Code  Rep.  N.  S.  408  ; 

V.  Bull,  2  Den.  (N.  Y.)  430  (1845) ;  Woodworth  v.  Zimmerman,  92  Ind. 


§  291.]    ALLEGLN-G  INTEEEST  OF  PEIOB  MOETGAGEB.         345 

are  in  separate  portions  of  the  mortgaged  premises,  or  that 
the  relief  asked  for  does  not  affect  all  of  them  alike,  is 
immaterial  and  will  not  invalidate  the  general  allegation  of 
a  subsequent  interest  in  the  mortgaged  premises.' 

Where  subsequent  incumbrancers  are  made  parties,  the 
general  practice  is  to  aver  that  they  have  or  claim  some 
interest  in  the  premises  sought  to  be  foreclosed,  by  mort- 
gage, judgment  or  otherwise,  as  the  case  may  be,  which 
interest,  if  any,  is  junior  and  subordinate  to  the  claim  of  the 
plaintiff;  but  the  more  correct  practice  is  to  allege, on  infor- 
mation and  belief  if  preferred,  the  nature  of  the  interest  of 
each  defendant,  as,  for  instance,  that  he  claims  to  have  an 
incumbrance  by  mortgage,  judgment  or  otherwise,  setting 
forth  all  of  the  particulars  of  the  same.  If,  however,  the 
plaintiff  in  his  complaint  misstates  the  interests  or  rights  of 
the  different  defendants,  who  are  by  reason  thereof  unneces- 
sarily compelled  to  answer  in  order  to  protect  their  interests, 
the  costs  of  such  defendants  will  be  charged  against  the 
plaintiff  personally." 

§  291.  Default  in  answering  by  prior  incumbrancer.— 
Where  a  prior  incumbrancer  by  judgment  or  otherwise,  on 
being  made  a  party  to  a  foreclosure  suit,  under  an  allegation 
in  the  complaint  that  he  has  or  claims  an  interest  in  the  prem- 
ises subsequent  to  the  mortgage,  makes  no  defence  to  the  fore- 
closure, but  allows  judgment  to  be  taken  against  him  by 
default,  and  permits  the  surplus  moneys  to  be  distributed  to 
other  claimants,  his  neglect  will  not  be  deemed  equivalent  to 
an  admission  upon  the  report,  that  he  has  no  lien  upon  the 
premises  older  than,  or  superior  to,  that  of  the  mortgage,  so 
as  to  be  an  estoppel  upon  him  in  another  action,  brought 
by  a  different  plaintiff,  for  the  foreclosure  of  a  prior  mortgage, 
and  will  not  prevent  him  from  asserting  in  the  latter  suit  a 
legal  priority  to  the  surplus  moneys  to  which  he  is  apparently 

349  (1883) ;  Ulrich  v.  DrischeU,  88  (1877) ;    s.   c.   79   Am.    Dec.    250 ; 

Ind  354  (1882) ;  Clay  v.  Hildebrand,  Wells  v.  Bridgeport  Hydraulic  Co., 

34  Kan.  694  (1886).  30  Conn.  316  (1862) ;  Mix  v.  Hotch- 

1  See  Middletown  Savings  Bank  kiss,  14  Conn.  32  (1840). 

V  Bacharach,  46  Conn.  513  (1879);  'Union  Ins.    Co.   v.   VanRensse- 

Waters  v.   Hubbard,  44  Conn.  340  laer,  4  Paige  Ch.  (N.  Y.)  85  (1833). 


BiQ         ALLEGmti  INTEPwEST  OF  PRIOR  MORTGAGEE.    [§  292. 

entitled  by  virtue  of  his  lien ;  the  parties  to  the  record 
not  being  identical  nor  the  subject  in  controversy  the 
same.' 

Where  the  plaintiff  in  an  action  to  foreclose  a  mortgage 
makes  a  prior  judgment  creditor,  or  a  prior  mortgagee  whose 
mortgage  is  due,  a  party  to  the  action,  he  should  set  forth  in 
his  complaint  the  date  and  the  amount  of  the  incumbrance  and 
state  that  it  is  a  prior  incumbrance.  In  a  case  where  the 
prior  incumbrance  is  a  mortgage,  the  plaintiff  should  aver  that 
it  is  due  and  payable,  in  order  that  the  judgment  may  make 
proper  provision  for  its  payment."  In  a  case  where  a  junior 
mortgagee  filed  a  bill  of  foreclosure,  making  the  holder  of  a 
prior  mortgage  a  party  defendant  and  requiring  him  to  answer 
as  to  the  amount  due  upon  such  prior  mortgage,  the  prior 
mortgagee  was  held  entitled  to  the  costs  of  his  answer  as  well 
as  other  costs  to  be  first  paid  out  of  the  proceeds  of  the  sale, 
or  to  be  charged  upon  the  plaintiff  personally  in  the  discre- 
tion of  the  court.' 

§  292.  Prayer  of  complaint. — The  relief  to  which  the 
plaintiff  believes  himself  entitled  must  be  fully  set  out  in  the 
complaint,  for  the  reason  that  the  judgment,  in  case  of  default, 
can  not  be  more  favorable  to  the  plaintiff  than  the  relief 
demanded    in   the   prayer   of   the    complaint,*  although    in 


>  Frost  V.   Koon,   30   N.  Y.   428  mortgagee,     and      the     mortgagor 

(1864).     See  also  Lewis  v.  Smith,  9  thereupon    executed   another  mort- 

N.  Y.  503  (1854) ;  s.  c.  11  Barb.  (N.  gage  on  the  same  property  to  secure 

Y.)  156  ;  Bank  of  Orleans  v.  Flagg,  an    antecedent    debt,    which    latter 

3  Barb.  Ch.  (N.  Y.)  318  ;  Holcomb  mortgage  was  transferred  to  a  bona 

V.    Holcomb,    3  Barb.    (N.  Y.)  30  fide   purchaser   for   value,    who   in 

(1847) ;  Elliott  v.  Pell,  1  Paige  Ch.  time    procured   a    decree    of  fore- 

(N.  Y.)  263  (1828).  closure  and  sale  against  the  mort- 

^  Holcomb  V.    Holcomb,  3  Barb.  gagor  and  a  judgment  for  deficiency 

(N.  Y.)  20  (1847).  against  his  assignor,  it  was  held  in  a 

^  Boyd  V.  Dodge,  10  Paige  Ch.  (N.  foreclosure  by  the  first  mortgagee 

Y.)  42  (1843).     See  ante  ij  190.  that  while  the  second  mortgage  was 

*  BuUwinker  v.  Ryker,   12  Abb.  entitled  to  priority,  yet  the  plaintiflE 

(N.  Y.)  Pr.  311  (1861);  N.  Y.  Code  was  entitled  to  be  subrogated  to  the 

Civ.  Proc.  §  1207.  But  where  a  mort-  rights  of  the  assignee  thereof,  and 

gage,  which  had  been  assigned  by  an  that    it  was    not    essential    to    the 

assignment  that  wjis  not   recorded,  granting  of  such  relief  that  it  should 

was  subbe(iueutly  discliurged  by  the  be  demanded  in  the  complaint ;  nor 


§293.]  DEilAND   m   COMPLAINT.  ^^^ 

nearly  every  other  kind  of  an  -^''°"  *e  court  may  grant  ^y 
relief  consistent  with  the  cause  of  action  set  forth  w  the 
complaint  and  embraced  within  its  issues. 

Thus,  where  the  plaintiff  is  entitled  to  ^f  '~  '° 
move  f;r  an  injunction,  this  relief  should  be  asked  fo   in  the 
prayer  of  the  complaint;'  otherwise  the  court  will  not  gran 
The  restraint  desired,  except  in  those  f-^'^'^f^^l'^^^^ 
rendering  such  restraint  necessary  arise  after  the  suit  h^ 
been  commenced.     Where  the  cause  for  "s'—  -'-"«' ,^ 
the   commencement   of  the  action,  an  '"J"."f  °"  "''^^ 
^ranted  on  the  presentation  of  affidavits  setting  forth  facts 
which  render  the  restraint  necessary  or  proper 

And  where  there  are  taxes  which  are  unpaid,  <>'  "K"*  "^ 
thf  terms  of  the  mortgage  the  mortgagee  was  to  pay  the 

taxes  and  to  be  reimbursed  by  the  --'^ Yunodd"  or'  P^d 
must  set  out  the  amount  of  taxes  due  and  ^^P^'f-^  P^^. 
by  the  mortgagee,  or  the  plaintiff  will  not  be  entitled  to  a 
findina  of  such  amount  in  the  decree. 

In  an  action  to  foreclose  a  mortgage,  the  comfaamt  .f 

sufficient  to  maintain  the  action,  is  not  demurrable  because 

hfrelief  demanded  is  greater  than,  or  different  fron^,   hat 

is    required   in   a   complaint,   which   seeKS  lu  & 

1  Simonson  v.  Blake,  12  Abb^ (N.      ^S^^^Y  Code  Civ.  Proc.   §608. 
Y.)  Pr.  331  (1861) ;  s.  a  20  How.        J- J'         j^       g  How.  (N.  Y.) 

V.  Ryker.  12  Abb.  (N.  Y.)  Pr    dU  ^         ^^  ^^       43^^ 

(1861);   Edson  v.   Girvan.  29  Hun  How^  t      code  Civ.  Proc.  §  604 

(N.  Y.)  425  (1888).      A  prayer  for  ^J-^        McCrossen,  31  Kan. 

'foreclosure  and  sale,  as  an  indepen-  Harm 

dent  remedy,  bowever,  is  mconsis-  402  a8H4).                         ^  ^^_  ^ 

tent   with    a   bill   framed    to    aid  ^^''l^^     J^^  in  Scheibe  r. 

'    proceedings  in  ejectment  and  makes  f^^^^^  ^^^  564  (i885). 

the  bill  multifarious  and  demurrable;  Kennedy.  ^ 
and  if  it  contains  no  other  requisites 


348  DEMANDLNG    JUDGMENT    FOK    DEFICIENCY.     [§  2'Jo. 

personal  representatives  of  a  deceased  mortgagor  with  any 
deficiency.' 

§  293.  Demand  for  judgment  of  deficiency. — A  personal 
judgment  for  deficiency  can  be  rendered  only  when  it  is 
demanded  in  the  complaint.'  But  where  the  complaint 
asks  for  a  judgment  on  the  note,  that  the  mortgage  be  fore- 
closed, that  the  mortgaged  property  be  sold  to  pay  the  debts 
and  costs  of  the  action,  and  that  execution  issue  for  the 
balance,  it  will  be  sufficient  to  sustain  a  personal  judgment 
for  deficiency,'  and  is  sufficient  to  authorize  any  relief  to 
which  the  facts  pleaded  may  entitle  the  plaintiff.*  If  the 
complaint  to  foreclose  a  mortgage  does  not  contain  a  prayer 
for  the  sale  of  the  premises,  it  will  be  held  insufficient,  upon 
the  coming  in  and  confirmation  of  the  report  of  the  amount 
due,  to  authorize  a  sale,  and  is  clearly  demurrable.' 

Under  a  statute  which  provides  for  the  entry  of  a  judg- 
ment for  deficiency,  only  where  the  complaint  contains  a 
demand  therefor,  a  prayer  in  the  complaint  "that  the 
plaintiff  may  have  execution  for  any  balance  remaining 
unpaid,"  should,  under  a  liberal  construction,  be  held 
sufficient  to  authorize  the  entry  of  a  judgment  for  any 
deficiency.'  Ordinarily  the  relief  demanded  by  the  plaintiff 
is,  that  the  mortgaged  premises  be  sold  for  the  payment  of 
the  debt ;  that  the  defendants  and  all  persons  claiming  under 
them  subsequent  to  the  commencement  of  the  suit,  be 
barred  and  foreclosed  of  all  right,  claim,  lien  and  equity  of 
redemption  in  the  mortgaged  premises ;  that  on  sale  of  the 
premises   the   moneys   arising   therefrom    be    brought  into 


'  Glacius  V.  Fogel,  88  N.  Y.  434  considered  as  amended ;    Foote  v. 

(1885)-  Sprague,  13  Kan.  155  (1874).      See 

'  Eichbredt  v.  Angerman,  80  Ind.  also  Armstrong  v,   Ross,  20  N.  J. 

208  (1881).  Eq.  (5  C.  E.  Gr.)  109  (1869) ;  Iowa 

«  Foote  V.  Sprague,  13  Kan.  155  Co.  v.  Mineral  Point  R.  R.  Co.,  24 

(1874).     See  Shotts  v.  Boyd,  77  Ind.  Wis.  93  (1869). 

223  (1881).     Where  the  complaint  *  Shotts    v.   Boyd,    77    Ind.    223 

contains  no  graver  defect  than  the  (1881). 

one  set  forth  in  the  text,  it  may  be  ^  Santacruz  v.  Santacruz,  44  Miss, 

amended  at  any  time  without  costs,  714  (1870). 

so  as  to  make  it  formally  perfect ;  «  dinger  v.  Liddle,  55  Wis.  621 

and  upon  petition  in  error,  it  will  be  (1882). 


§  29i.]    DlLVIAifDlNG    JUDGMENT   FOK    DEFIOLENCY.  349 

court ;  that  the  plaintiff  be  paid  his  debt,  interest  and  costs 
out  of  such  moneys,  and  that  the  mortgagor  and  all  other 
parties  personally  liable  for  its  payment,  specifying  their 
names,  be  adjudged  to  pay  the  deficiency,  if  any.  In  a 
recent  case,  where  judgment  for  deficiency  was  entered  upon 
the  default  of  the  defendants,  although  the  complaint  did 
not  ask  for  such  relief,  it  was  held  that  the  judgment  was 
unauthorized  and  void.* 

In  an  action  to  foreclose  a  mortgage,  where  one  of  the 
defendants  is  not  personally  liable  for  the  debt,  the  complaint 
should  demand  a  decree  of  foreclosure  and  sale  of  the  land 
against  both  mortgagors,  and  a  judgment  for  deficiency 
against  that  debtor  only  who  is  personally  liable  for  the  debt.'' 
Thus,  where  a  wife  joins  her  husband  in  the  execution  of  a 
mortgage  to  secure  the  husband's  debt,  on  complaint  in 
foreclosure  the  court  may  properly  render  a  personal  judg- 
ment against  the  husband  alone  on  the  note,  and  a  decree  of 
foreclosure  and  sale  against  both.*  The  entry  of  a  personal 
judgment  against  the  wife  would  be  a  great  error  and 
absolutely  void.*  The  only  reason  for  making  a  wife,  who 
joined  her  husband  in  the  execution  of  a  mortgage,  a  party 
to  proceedings  for  foreclosure,  is  to  bar  her  right  of  dower 
in  the  equity  of  redemption,  or  to  give  her  an  opportunity, 
before  foreclosure,  to  redeem  and  prevent  a  sale  of  the 
property.* 

§  294.  Allegation  for  personal  judgment  against 
grantee  assuming  payment. — Where  the  purchaser  of  land 
subject  to  a  mortgage  covenants  with  the  vendor  to  ^ay  the 
mortgage  debt,  the  mortgagee  is,  in  equity,  entitled  to  a 
personal  decree  against  such  purchaser  for  any  deficiency 
upon  foreclosure  and  sale  of  the  mortgaged  premises.*     An 


>  Peck  V.  New  York  &  N.  J.  R.  '  Rollins  v.   Forbes,  10  Cal.  909 

R.  Co.,  85  N.  Y.  246  (1881).     See  (1858) ;    Wright  v.  Langly,   36   111. 

Simonson  v.  Blake,  12  Abb.  (N.  Y.)  381  (1865). 

Pr.  331  (1861) ;  a  c.  20  How.  (N.  Y.)  *  See  Brown  v.  Orr,  29  Cal.  120 

Pr.    484;    Swart  v.   Boughton,   35  (1865). 

Hun  (N.  Y.)  281  (1885) ;   Hansford  '  Wright   v.   Langly,  36  Dl.    381 

V.  Holdam,  14  Bush  (Ky.)  210  (1878).  (1865). 

«  Rollins   V.  Forbes,   10   Cal.  299  "  Halsey  v.  Reed,  9  Paige  Ch.  (N. 

(1858).  Y.)  446  (1842).     See  aiUe  §  223. 


350  ALLEGING    ASSUMPTION    OF   MORTGAGE.  [§  295. 

allegation  In  the  complaint  that  the  grantee  of  the  mortgaged 
premises,  at  the  time  of  his  purchase,  covenanted  and 
agreed  to  pay  the  mortgage  debt,  and  to  discharge  the  mort- 
gage lien,  is  sufficient  to  sustain  a  personal  judgment  against 
such  grantee  for  the  deficiency.*  While  it  is  true  in  some 
states,  that  the  privies  to  a  contract  of  assumption  may  rescind 
it  at  any  time  before  notice  of  its  acceptance  by  the  holder 
of  the  mortgage  debt,  yet  after  notice  or  knowledge  of  such 
acceptance  there  can  be  no  rescission.'  Although  such  accept- 
ance must,  in  equity  as  in  law,  precede  the  bringing  of  an 
action  upon  the  promise  by  the  holder  of  the  debt,  yet  the 
complaint  need  not  contain  an  averment  either  of  the  accept- 
ance or  notice  thereof  to  the  defendant ;  neither  is  it  neces- 
sary to  aver  against  such  a  grantee,  that  he  still  holds  the 
mortgaged  land  or  any  part  thereof.  The  mortgagor,  his 
grantee  and  successive  grantees,  who  have  agreed  to  pay  the 
debt,  may  be  sued  upon  their  respective  promises  in  the  same 
action ;  in  such  a  case,  they  will  be  held  severally  liable  in 
the  inverse  order  of  their  respective  promises.* 

§  295.     Allegation   as    to    property    mortgaged. — The 

complaint  and  decree  in  a  mortgage  foreclosure  should  accu- 
rately describe  the  mortgaged  property  which  it  is  sought  to 
sell.  This  may  be  done  by  setting  out  the  description  in 
full  in  the  complaint,  or  by  referring  to  the  mortgage  or 
other  paper  annexed  and  filed  therewith,  which  contains  a 
full  description;  but  it  would  seem  that  any  other  descrip- 
tion will  not  be  sufficient.  Thus,  in  a  case  where  the  mort- 
gage, instead  of  describing  the  lands  covered,  referred  for  a 
description  to  a  deed,  and  the  complaint  and  decree  in 
foreclosure  followed  the  description  in  the  mortgage,  referring 
also  to  the  deed  for  a  fuller  description,  the  court  held  that 
the  description  was  insufficient,  and  that  no  title  was 
acquired  at  a  sale  made  in  the  foreclosure  proceedings.*   The 


•  Pellicr  V.  Gillespie,  67  Cal.  583  *  Crosby  v.  Dowd,  61  CaJ.  557, 

(1885).  603  (1882).     See  Emeric  v.  Tarns.  6 

^  See  ante  %%  230,  231.  Cal.  155  (1856) ;  Buck  v.  Axt,  85  Ind. 

3  Carnahan  v.  Tousey,  93  Ind.  561  512  (1882) ;  Hosford  v.  Johnson,  74 

(1883).      But  see  a7iie  §§280,  231,  Ind.  479(1881) ;  White  v.  Hyatt,  40 

and  llie  cases  cited.  Ind.  385  (1872) ;  Whittelsey  v.  Beall, 


§  296.]  DESCEIBING   MORTGAGED    PREMISES.  351 

purpose  of  a  description  in  a  complaint  in  a  mortgage  fore- 
closure is  to  furnish  the  means  of  identifying  the  property, 
and  a  complaint  which  does  this  will  be  sufficient.'  There 
is  as  much  necessity  for  a  correct  description  of  mortgaged 
property  in  a  complaint  for  foreclosure,  as  there  is  in  the  com- 
plaint in  an  action,  the  object  of  which  is  to  recover  possession 
of  property.'  In  an  action  to  foreclose  a  mortgage  on  a  home- 
stead, it  seems  that  the  complaint  need  not  describe  the 
property  as  a  homestead.* 

Where  the  description  of  the  mortgaged  premises  is 
correct  in  the  complaint,  a  decree  entered  by  default  can  not 
be  avoided  by  the  defendant's  showing  that  the  mortgage,  as 
recorded,  described  the  premises  incorrectly.*  And  where 
the  complaint  in  an  action  to  foreclose  a  mortgage,  covering 
several  distinct  parcels  of  land,  describes  some  of  such  tracts 
insufficiently,  if  the  remaining  tracts  are  sufficiently  described, 
such  insufficient  description  of  some  of  the  tracts  will  not 
render  the  complaint  defective.* 

§  296.  Referring  to  mortgage  or  other  instruments 
for  description. — The  complaint  should  so  describe  the 
property  mortgaged,  that  in  case  a  sale  is  ordered  the  officer 
may  know  upon  what  lands  to  execute  the  order  of  the 
court.*  If  the  complaint  does  not  contain  a  sufficient 
description  of  the  property,  but  refers  to  an  annexed  copy  of 
the  mortgage  for  such  description,  and  such  mortgage  in 
turn  refers  therefor  to  another  instrument,  the  complaint 


5  Blackf.  and.)  143  (1839)  ;  Triplett  *  Crosby  v.  Dowd,  61  Cal.    608 

V.  Sayre,  8  Dana  (Ky.)  590  (1835).  (1882). 

Compa/re  Deitricli  v.  Lang,  11  Kan.  '  VanSickles  v.  Town,  63  Iowa, 

636  (1873);    Howo  v.   Towner,   55  259(1880). 

Yt.  315  (1883).     A  mistake  in  the  *  Deitrich  v.  Lang,  11  Kan.  638 

complaint  in  describing  the  mort-  (1873). 

gaged  property  may  be  corrected,  "  Rapp  v,  Thie,  61  Ind.  373  (1878). 

and  a  decree  of  foreclosure  may  be  See  Buck  v.  Axt,  85  Ind.  512  (1882). 

entered  in  the  same  action  after  the  «  Struble  v.   Neighbert,   41    Ind. 

correction  ;  Davis  v.  Cox,  6  Ind.  481  344  (1872) ;  White  t.  Hyatt,  40  Ind. 

(1855);  Palmer  v.  Windrom,  12  Neb.  385  (1872) ;  Nolte  v.  Libbert,  34  Ind. 

494  (1882).  163  (1870) ;  Davis  v.  Cox,  6  Ind.  481 

1  Thompson  v.  Madison  Build,  and  (1855);  Whittelsey  v.  Beall,  5  Blackf. 

Aid  Asso.,  103  Ind.  279  (1885).     See  and.)  143  a839) ;  Triplett  v.  Sayie, 

Crosby  v.  Dowd,  61  Cal.  603  (1882).  3  Dana  (Ky.)  590  (1835). 


352  DESCKII3IXG    JIORTGAGED    PEEMISES.  [§297. 

will  be  fatally  defective.  It  has  been  held,  however,  that  it 
is  generally  sufficient  to  describe  the  premises  as  they  are 
described  in  the  mortgage  itself  :  and  that  the  inaccuracy  of 
such  a  description  is  no  ground  for  refusing  a  decree  of  sale, 
although  it  may  affect  the  title  to  the  premises  when  sold  ;* 
but  it  is  believed  that  this  is  bad  practice  and  not  to  be 
encouraged.  It  is  certain  that  if  a  purchaser  should  object 
to  the  title  offered,  because  of  a  defective  and  insufficient 
description  in  the  complaint  and  decree,  he  would  not  be 
compelled  to  complete  the  purchase. 

While  it  is  generally  sufficient  to  describe  the  premises  as 
they  are  described  in  the  mortgage  itself,  this  proposition  is 
true  only  when  the  mortgage  contains  a  description,  and  not 
a  mere  reference  therefor  to  other  instruments  from  which  a 
description  may  or  may  not  be  obtained.' 

A  reference  in  a  complaint  to  maps  on  file  or  to  public 
records  for  a  full  description  of  the  mortgaged  premises  has 
been  held  to  be  sufficient.  Thus,  where  a  complaint  alleged 
that  the  mortgage  was  duly  recorded  in  the  office  of  the 
recorder  of  the  county,  and  described  the  mortgaged  prem- 
ises as  lot  G,  in  block  number  93,  in  Horton's  addition  to 
San  Diego,  as  per  maps  on  file  in  the  county  recorder's 
office,  made  by  James  Pascoe,  the  court  held  that  this 
sufficiently  described  the  property  as  situated  in  San  Diego 
county  ;  and  that.  Judicial  notice  being  taken  of  the  fact  that 
there  is  but  one  county  of  San  Diego  in  the  state,  the 
superior  court  of  that  county  had  jurisdiction  of  the  subject 
of  the  action.* 

§  297.  Defective  description. — The  description  of  real 
estate  in  a  mortgage  may  be  sufficiently  correct  to  make  a 
valid  conveyance  as  against  the  mortgagor,  but,  unaided  by 
proper  averments  in  a  complaint  for  foreclosure,  be  insuffi- 
cient to  authorize  a  decree  and  order  of  sale.*     Where  such 


'  Struble  v.  Neigbbert,  41  Ind.  344  ^  Crosby  v.   Dowd,   61   Cal.    6C3 

(1872).     But  see    Emeric  v.   Tarns,  (1882). 

6  Cal.    155    (1856).     See   also   ante  *  Graham  v.  Stewart,  68  Cal.  374 

§  395.                                                        ■  (1886). 

=  See  Schmidt  v.  Mackey,  31  Tex.  "  Halstead  v.   Board  of  Commis- 

659  (1869).  sionersof  Lake  Co., 56 Ind.  863  (1877). 


§  297.]        DEFECTIVE   DESCRIPTION    OF   PEEMISES.  353 

a  description  is  so  defective  as  to  render  the  mortgage  void, 
no  averments  in  the  complaint  can  make  valid  a  decree 
rendered  thereon.* 

Where  it  appeared   from  the  allegations  in  a  complaint 
for  the  foreclosure  of  a  mortgage,  that  certain  pieces  of  real 
estate,  together  with  two  mills  and  "  all  and  singular  the 
'  hereditaments  and  appurtenances  thereunto  belonging,"  were 
mortgaged,  and  it  also  appeared  from  the  pleadings  and  the 
admission  of  the  defendants  and  mortgagors,  that  a  certain 
mill-dam   and    water-power  were  appurtenant  to  said  mills 
and  real  estate,  but  it  did  not  appear  whether  such  dam  and 
water-power  were  situated  on  said  real  estate  or  not,  such 
allegations  were  held  to  support  a  judgment  that  the  mort- 
gage was  a  lien  upon  such  dam  and  water-power,  as  well  as 
upon    the   real   estate   more   particularly  described   in  the 
mortgage.'      A   description    of   the   land    in    a  school-fund 
mortgage,  as  "the  north-east  part"  of  a  specified  tract  "con- 
taining ninety  acres,"  has  been  held  to  be  insufficient,  and 
to  render  invalid  an  auditor's  sale  made  thereunder.'     But  a 
description   as   "lots   9   and    10  in  block   51,  in    Rice  and 
Irvine's  addition,"  has  been  held  to  describe  the  whole  of 
the  lots  sufficiently,  though  lying  partly  in  "Dayton  and 
Irvine's  addition."*     And  in  describing  a  parcel  of  land  as 
being  north  of  the  "ground  of  the  C,  C,  C.  &  I.  R.  R.,"  the 
use  of  the  word  "ground"  instead  of  the  words  "right  of 
way,"  does  not  render  such  description  void.' 

Where  lands  are  described  by  section,  township  and  range, 
not  giving  the  county  or  state  where  situated,  it  will  be 
presumed  that  the  lands  are  in  the  state  where  the  court  is 
located,  and  from  the  description  the  court  will  judicially 
know  the  county.'  The  fact  that  a  complaint  in  foreclosure 
describes  the  premises  mortgaged  in  different  terms  from 


.»  Halstead  v.  Board  of  Commis-  *  Rochat  v.  Emmett,  35  Minn.  420 

sioners  of  Lake  Co..   56  Ind.  363  (1886). 

(1877) ;   Slater  v.  Breese,  36  Mich.  «  Pence  v.  Armstrong,  95  Ind.  191 

77  (1877).  (1883). 

«Lanouev.  McKinnon,  19  Kan.  »  Brown  v.  Ogg,  85  Ind.  234(1882). 

408  (1877).  See   Parker  v.   Teas,   79  Ind.   235 

3  Buck  V.  Axt,  85  Ind.  512  (1882).  (1881). 

(23) 


354  ALLEGLNG   BREACH    OF    CONTRACT.  [g  2y8. 

those  used  in  the  mortgage  itself,  is  of  no  consequence 
where  the  mortgage  is  sufficiently  well  identified,  and  the 
premises  described  in  the  complaint  are  the  same  as  those 
described  in  the  mortgage.' 

§  298.  Allegation  as  to  breach  of  contract  and  right  of 
action. — The  allegations  in  a  complaint  must  set  out  a 
breach  of  the  conditions  of  the  mortgage,  in  order  to  give 
the  court  jurisdiction  to  foreclose  the  mortgage  and  to  sell  the 
property."  Thus,  where  it  appears  from  the  complaint  that 
the  personal  estate  of  a  deceased  mortgagor  is  liable  for  the 
payment  of  the  mortgage  debt,  and  that  the  suit  was 
brought  before  the  expiration  of  the  time  allowed  for  the 
payment  of  the  debt  after  the  issuing  of  letters  of  adminis- 
tration, and  the  giving  of  notice  thereof,  the  complaint  is 
defective  and  must  be  dismissed  on  demurrer  for  want  of 
sufficient  facts.*  And  where  the  complaint  alleges  the  giving 
of  a  bond,  conditioned  for  the  payment  of  a  sum  of  money, 
and  that  the  mortgage  was  given  as  collateral  security  there- 
for and  contained  the  same  condition,  it  must  also  allege  a 
default  in  the  performance  of  the  condition  of  the  bond.* 
Thus,  in  an  action  to  foreclose  a  mortgage  given  to  secure  the 
performance  of  a  bond,  conditioned  for  the  payment  of  certain 


'  Shepard  v.   Shepard,   36  Mich.  in  any  form  requested  to  pay  them, 

173  (1877).  nor  that  it  had  neglected  to  comply 

«  Davies  v.  New  York  Concert  Co. ,  with  any  such  request,  nor  that  it  was 

41   Hun  (N.    Y.)  492  (1886).      In  In    any   manner   in  default.      The 

this  case  the  allegations  of  the  com-  court    held  that    it    was    apparent 

plaint,  as  to  the  default  of  the  def en-  from  the  provisions  contained  in  the 

dant,  stated  that  among  the  interest  mortgage,  that  more  than  the  mere 

coupons  which  were  held  and  owned  fact  of  the  non-payment  of  the  cou- 

by   the    plaintiff's    assignor,    were  pons  was  required  to  be  shown  to 

twelve  coupons  for   fifteen  dollars  authorize  an  action  to  be  brought  for 

each,   payable  on  January  1,  1884,  its  foreclosure,  and  that  a  demurrer 

and  twelve  coupons  for  fifteen  dol-  interposed  to  the  complaint  upon  the 

hirs  each,   payable  on  April  1,  1884,  gi-ound  that  it  did  not  state  facts 

and  that  said  coupons  were  not  paid  sufficient  to  constitute   a  cause  of 

at  maturity,  nor  were  any  of  them  action,  should  be  sustained, 
paid,  or  any  part  thereof.     It  was  s  Lovering  v.   King,  97  Ind.  130 

not  alleged  that  the  company  had  (1884). 

neglected  or  refused  to  pay  them,  at         *  Coulter  v.  Bower,  11  Daly  (N. 

the  place  or  in  the  manner  provided  Y.)  203  (1882). 
in  the  mortgage,  nor  that  it  had  beeu 


§  298.]  ALLEGING    BKEACH   OF   CONTKACT.  356 

indebtedness  of  a  suspended  bank  out  of  its  assets,  the  com- 
plaint which  failed  to  show  the  character  of  such  indebtedness, 
the  several  amounts  constituting  it,  the  persons  to  whom  it 
was  due,  the  nominal  value  of  the  assets  of  the  bank,  the 
amount  realized  out  of  them  and  applicable  to  such  payment, 
or  in  what  respect  or  particulars,  or  in  what  specific  sum  the 
obligors  were  in  default,  was  held  bad  on  demurrer.' 

The  right  to  foreclose  accrues  upon  any  breach  of  the 
conditions  of  a  mortgage  ;*  and  if  there  are  several  breaches, 
it  is  necessary  to  prove  only  one  of  them  to  be  entitled  to  a 
decree.*  Where  suit  is  brought  to  foreclose  a  mortgage 
given  to  secure  a  bond  for  the  support  of  a  husband  and 
wife  during  their  natural  lives,  a  breach  of  such  bond  must  be 
shown,  but  such  breach  need  not  be  shown  to  have  occurred 
during  the  life-time  of  the  husband,  who  died  first.  If  there 
has  been  a  breach  of  the  bond  since  the  death  of  the  husband, 
and  before  the  commencement  of  the  suit,  it  will  be  sufificient 
to  maintain  the  action  ;*  because  in  such  a  case  the  mortgage 
was  given  as  a  security  for  the  support  not  only  of  the 
deceased  mortgagor,  but  of  his  wife  also,  and  constitutes  an 
obligation  continuing  as  long  as  either  lives,*  for  a  bond  and 
mortgage  given  to  a  husband  and  wife  belongs  to  the 
survivor.' 

Where  the  mortgagee's  right  to  foreclose  is  dependent 
upon  a  condition  precedent,  the  complaint  should  distinctly 
aver  the  performance  of  such  condition.'  But  where  the 
action  is  founded  upon  a  note  payable  on  demand,  a  demand 
need  not  be  alleged  in  the  complaint.'  If  no  particular 
time  for  payment  is  mentioned  in  a  mortgage,  it  is  to  be  paid 


1  Seely    v.    HiUs,    49    "Wis.    473  •  Pike  v.   Collins,  33  Me.  38,  43 

(1880).  (1851);  Draper  v.  Jackson,  16  Mass. 

«  See  Davies  v.  New  York  Con-  480  (1820).     See  ante  §  81. 

cert  Co.,  41  Hun  (N.  Y.)  492  (1886).  '  Curtis  v.   Goodenow,  24  Mich. 

8  Beckwith  v. Windsor  Mauuf.  Co. ,  IS  (1871). 

14  Conn.  594  (1842).  *  See  ante  %%  89,  40,  282.     See  also 

*  Plummer  v.    Doughty,   78  Me.  Gillett  v.  Balcom,    6  Barb.  (N.  Y.) 

841  (1886).  370  (1819) ;  Haxtun    v.    Bishop,    3 

'  See  Plummer    v.    Doughty,   78  Wend.  (X.  Y.)  13  (1829) ;  Austin  v. 

Me.    341,    344    (1886);    Merrill    v.  Burbank,  2Day  (Conn.)474(1807);  8. 

Bickford,  65  I^Ie.  119  (1876) ;  Pike  c.  2  Am.  Dec.  119  ;  RumbaU  v.  Ball, 

V.  Collins,  33  Me.  38.  43  (1851).  10  Mod.  38  (1712). 


356  LNDEMNITY   MORTGAGE.  [§§299-300. 

within  a  reasonable  time,  and  if  not  so  paid  the  mortgagee 
will  be  entitled  to  foreclose/  although  the  interest  may  have 
been  paid  regularly."  The  same  is  true  where  the  debt 
secured  is  past  due.* 

§  299.  Allegation  in  foreclosure  of  indemnity  mort- 
gage.— Although  a  mortgage  may  purport  to  have  been  given 
to  secure  the  payment  of  a  note,  it  may  be  shown  to  have 
been  given  for  indemnity  only.*  In  an  action  to  foreclose  a 
mortgage  given  as  an  indemnity  merely,  the  complaint  must 
allege  a  payment  on  account  of  the  liability  for  which  the 
mortgage  was  given  as  security ;  because  a  surety  who  has 
taken  a  mortgage  to  indemnify  him  is  not  entitled  to  a  fore- 
closure thereof,  until  he  has  paid  the  debt  of  the  principal  or 
otherwise  suffered  an  injury.*  The  complaint  must  set  out  the 
exact  amount  paid  on  account  of  the  liability  ;*  and  where 
an  indemnity  mortgage  is  given  to  secure  more  than  one 
note,  it  must  specifically  state  on  which  note  the  payment 
was  made.^  But  where  the  aggregate  sum  paid  is  stated  in 
the  complaint,  it  is  not  necessary  to  set  up  in  detail  the 
several  distinct  sums  constituting  such  amount.* 

Where  a  mortgage  is  given  to  secure  the  sureties  on  an 
official  bond,  it  is  immaterial  that  a  bill  to  foreclose  it  does 
not  correctly  state  the  date  of  the  appointment  of  the  offi- 
cer, if  it  correctly  recites  the  mortgage  and  the  breach,  and 
the  evidence  makes  out  a  full  cause  of  action.* 

§  300.  Allegation  as  to  defendant's  interest. — A  com- 
plaint in  foreclosure  necessarily  puts  the  defendant's  title  in 
controversy ;  he  can  be  impleaded  only  on  the  ground  that 


»  Triebert  v.  Burgess,  11  Md.  453  (1855) ;  Lewis  v.  Richey,  5  Ind.  153 

(1857) ;  FarreU  v.  Bean,  10  Md.  233  (1854).      See    Collier   v.   Ervin,     3 

(1856).  Mont.  T.  335  (1875).     See  ante  §  50. 

2  Austin  v.Burbank,  2  Day  (Conn.)  «  Seely  v.  Hills,  44  Wis.  484,  488 

474  (1807) ;  8.  c.  3  Am.  Dec.  119.  (1878) ;  s.  c.  49  Wis.  473,  483  (1880). 

*  Wright  V.  Shumway,  1  Biss.  C.  '  Shepard  v.  Shepard,  6  Conn.  37 
C.  23  (1853) ;  s.  c.  3  Am.   L.   Reg.  (1825). 

(O.  S.)  30.  8  Shepard  v.  Shepard,  6  Conn.  37 

*  Morrill  v.    Morrill,    53  Vt.    74  (1825) ;  Dye  v.  Mann,  10  Mich.  291 
(1880).  (1862). 

'  Shepard  v.  Shepard,  6  Conn.  37  »  Shelden   v.   Warner,    45    Mich. 

(1825) ;  Francis  v.  Porter,  7  Ind.  213  638  (1881). 


§  300.]        ALLEGmo  defendant's  interests.  357 

he  has  or  claims  title.  The  foreclosure  would  fail  of  its  pur- 
pose, if  one  who  claims  title  should  be  omitted  as  a  defen- 
dant.' And  where  the  complaint  to  foreclose  a  mortgage 
joins  a  third  party  as  a  co-defendant,  it  should  state  the 
interest  of  such  third  party,  and  show  that  his  interest  is 
inferior  to  the  mortgage  lien  of  the  plaintiff." 

An  allegation  in  a  complaint  for  the  foreclosure  of  a 
mortgage,  that  a  defendant  has  or  claims  to  have  some 
interest  in  the  premises,  by  mortgage,  judgment,  tax  lie« 
or  otherwise,  but  that  such  interest  or  lien,  if  any,  has 
accrued  subsequent  to  the  lien  of  the  mortgage,  is  not  an 
admission  of  any  claim  or  lien  paramount  to  the  mortgage.' 
A  general  allegation  that  such  third  party  has  or  claims  an 
interest  in  the  mortgaged  premises,  which,  if  any,  is  subse- 
quent to  the  plaintiff's  mortgage,  sufficiently  shows  that  he 
is  a  proper  defendant,*  although  his  interest  is  not  set 
out  specifically,'  and  is  sufificient  on  demurrer;'  it  is  not 
necessary,  in  a  complaint  for  the  foreclosure  of  a  mortgage, 
to  describe  specifically  the  interest  which  each  defendant  has, 
or  may  claim  to  have,  in  the  real  estate  covered  by  the 
mortgage.^  The  mere  averment,  however,  in  a  complaint 
to  foreclose  a  mortgage  against  a  person  other  than  the 
mortgagor,  that  "  he  is  now  the  owner  of  the  land,"  is  not 
sufificient  to  show  that  the  mortgage  constitutes  a  lien  upon 
the  land  as  against  him,  as  he  may  have  acquired  the  land 
before  the  mortgage  was  executed.* 

Where  a  third  party  is  joined  as  a  defendant  upon  the 
allegation  that  he  has  or  claims  some  interest  adverse  to 
the  plaintiff,  of  the  nature  and  amount  of  which  the  plaintiff 


"  McDonald  V.  McDonald, 45  Micb.  (1871).     See  Aldrich  v.  Lapham,  6 

44  (1880).     See  ante  %%  70,  116.  How.  (N.  Y.)  Pr.  129  (1850). 

*  Frost  V.  Koon,  30  N.  Y,    428,  *  Woodworth  v.  Zimmerman,  93 
448  (1864);  Drury  v.  Clark,  16  How.  Ind.  349  (1883). 

(N.  Y.)  Pr.  424  (1857) ;  Neitzel  v.  « Bradford  v.  Russell,  79  Ind.  64 

Hunter,  19  Kan.  221  (1877) ;  Short  (1881). 

V.  Nooner,  16  Kan.  220  (1876) ;  s.  c.  '  Hoes   v.    Boyer,   108   Ind.   494 

20  Kan.  624  (1878).  (1886). 

*  Newton  v.  Marshall,  62  Wis.  8  » Nichol    v.    Henry,   89   Ind.   54 
(1884).  (1883). 

<Bowen  v.   Wood,  35  Ind.   268 


358  DISMISSAL  OjS^  PAyjIENT.  [§301. 

is  ignorant,  and  he  demands  in  his  complaint  that  the  defen- 
dant may  be  compelled  to  disclose  such  interest  to  the  court, 
a  judgment  barring  and  foreclosing  all  the  right,  title  and 
interest  of  such  defendant  in  and  to  the  mortgaged  premises, 
adverse  to  the  plaintiff,  will  be  binding  upon  him  if  he  files 
only  a  general  answer.' 

§  301.  Dismissal  of  complaint  on  payment  before 
judgment. — The  Code  provides  that  where  an  action  is 
brought  to  foreclose  a  mortgage  upon  real  property  upon 
which  a  portion  of  the  principal  or  interest  is  due,  and 
another  portion  of  either  is  to  become  due,  the  complaint 
must  be  dismissed  without  costs  against  the  plaintiff,  upon 
the  defendants  paying  into  court,  at  any  time  before  the 
final  judgment  directing  a  sale  is  rendered,  the  sum  due. 
together  with  the  plaintiff's  costs.*  Where  money  is  paid 
into  court,  unless  the  court  otherwise  directs,  it  must  be  paid 
either  directly,  or  by  the  officer  who  is  required  by  law  first 
to  receive  it,  to  the  county  treasurer  of  the  county  where 
the  action  is  triable  ;  and  if  the  case  is  pending  in  New  York 
city,  it  must  be  paid  to  the  chamberlain.* 


*  Blandin  v.  Wade,  20  Kan.  251  (1872).  Payment  to  the  referee  upon 
(1878).  trial  before  him  is  not  payment  into 

*  N.  Y.  Code  Civ.  Proc.  §  1634.  court ;  the  referee  is  not  a  court  for 
See  Long  v.  Lyons,  54  How.  (N.  Y.)  that  purpose.  Becker  v.  Boon,  16 
Pr.  129  (1875) ;  Malcolm  v.  Allen.  N.  Y.  317  (1874). 

(N.  y.  Supr.  Ct.)  5  Alb.  L.  J.  334  » N.  Y.  Code  Civ.   Proc.   §  745. 


CHAPTER  XrV. 


LIS  PENDENS— NOTICE  OF  PENDENCY  OP  ACTION. 


303.  Definition  and  Bacon's  ordi- 
nances. 

303.  Nature  and  functions  of  a  lis 

pendens. 
804.  When    lis  pendens   becomes 

operative. 

305.  Duration  and  extent  of  a  lis 

pendens. 

306.  History  of  the  doctrine   in 

New  York. 

307.  Contents    of    notice    of   lis 

pendens. 

308.  Description  of  premises. 

309.  "Wlien  notice  of  lis  pendens 

to  be  filed. 

310.  Who  may  file  notice  of  lis 

pendens. 


811.  Recording  and  indexing  Ut 

pendens. 
813.  Effect  of  notice  of  Zw^WMforw, 

313.  Who  regarded  as  subsequent 

incumbrancers. 

314.  Effect  of  lis  pendens  on  hold- 

ers of  unrecorded  convey- 
ances. 

815.  Effect   of   omission   to   file 

notice  of  lis  pendens. 

816.  Proof  of  filing  notice  of  lis 

pendens. 

817.  Defective  and  amended  no- 

tice of  lis  pendens. 

318.  Dormant  lis  pendens. 

319.  Cancelling  notice  of  lis  pen- 

dens. 


%  302.  Definition  and  Bacon's  ordinances. — The  phrase 
lis pe7idens  means  literally  "suit  pending;'"  the  phrase,  as 
well  as  its  legal  doctrine,  comes  to  us  from  the  civil  law,*  where 
a  suit  was  not  considered  as  pending  until  it  had  reached 
the  stage  called  litis  contestatio.*  By  some,  however,  it  has 
been  supposed  that  the  rule  of  lis  pendens  v/2iS  zdo^i^d  hy 
analogy  from  a  proceeding  at  common-law  ;  thus,  in  an  early 
realty  case,*  the  court  said :  "  This  is  in  imitation  of  the 
proceedings  in  a  real  action  at  common-law,  where,  if 
the  defendant  aliens  after  the  pendency  of  the  writ,  the 
judgment  in  the  action  will  over-reach  such  alienation." 

Lord  Chancellor  Bacon,  while  a  member  of  the  early 
English  court  of  chancery,  promulgated  a  number  of  ordi- 
nances or  rules'  "for  the  better  and  more  regular  adminis- 
tration  of  justice  in  the  chancery,  to  be  daily  observed, 


1  2  Kent,  122  ;  2  Bouv.  L.  Diet, 
(loth  ed.)  120. 
'  See  Bennett  on  Lis  Pendens,  §  9. 
»  1  Mack.  C.  L.  205,  §  203. 


*  Sorrell  v.  Carpenter,  3  P.  Wma. 

482  (1728). 
» Adopted  1618. 


360  DEFINITION    OF   LIS   PENDENS.  [§  302. 

saving  the  prerogative  of  the  court."  In  these  ordinances 
we  ha\'e  many  rules  which  originated  with  Bacon,  but  the 
main  body  of  them,  it  is  thought,  previously  existed  in  some 
form,  written  or  unwritten ;  but  it  is  beyond  the  scope 
and  ambition  of  this  work  to  settle  the  much  discussed 
questions  of  the  extent  to  which  Bacon  altered  the  existing 
practice,  or  for  the  first  time  established  it,  and  how  far  he 
merely  collated  and  published  rules  previously  in  force. 

The  twelfth  of  Bacon's  ordinances  or  rules  was  as  follows: 
"  No  decree  bindeth  any  that  cometh  in  bona  fide  by  convey- 
ance from  the  defendant  before  the  bill  exhibited,  and  is 
made  no  party,  neither  by  bill  nor  the  order ;  but  where  he 
comes  in  pendente  lite,  and  while  the  suit  is  in  full  prosecu- 
tion, and  without  any  color  of  allowance  or  privity  of  the 
court,  there  regularly  the  decree  bindeth ;  but  if  there  were 
any  intermission  of  suit,  or  the  court  made  acquainted  with 
the  conveyance,  the  court  is  to  give  order  upon  the  special 
matter  according  to  justice.'" 

The  correct  doctrine  of  lis  pendens  has  been  said  to  be, 
that  the  law  will  not  allow  a  defendant  to  transfer  to  others 
pending  a  litigation  rights  to  the  property  in  dispute,  so 
as    to    prejudice    a    recovery    by   the    plaintiff.'     Another 
form   of  statement   is,   that   where  a  litigation   is  pending 
between  a  plaintiff  and  a  defendant,  as  to  the  ownership  of  a 
particular  estate,  the  necessities  of  mankind  require  that  the 
decision  of  the  court  shall  be  binding,  not  only  on  the  litiga- 
ting parties,  but  also  on  those  who  derive  title  under  them 
by  transfers  made  pending  the  suit.     If  this  were  not  true, 
there  could    be    no   certainty   that  a  litigation  would  ever 
come  to  an  end.     The  rule  had  its  roots  largely  in  public 
poHcy,  and  does  not  rest,  as  is  sometimes  supposed,  on  the 
equitable  doctrine  of  notice  binding  on  the  conscience.   The 
doctrine  is  not  peculiar  to  courts  of  equity.     In  actions  in 
rem    the   judgment    bound  the    lands,   notwithstanding  an 
alienation  by  the  defendant  pendente  lite.     Were  it  not  for 


'  See    vii.    Bacon's    Works,    761  «  Bellamy  v.  Sabine,  1  DeG.  «&  J. 

(1859),    (ed.    of  Spedding,    Ellis  &      566(1857). 
Heath,  London.)    See  also  BenueU 
on  Li»  Pendens,  appx.  446. 


§  303.]  NATUEE  AXD  FUNCTIONS  OF  LIS  PENDENS.     oGl 

the  doctrine  in  question,  the  plaintiff  in  every  action  would 
be  liable  to  be  defeated  in  his  recovery  by  the  defendant's 
alienating  the  property  in  litigation  before  judgment  or 
decree,  so  that  he  would  be  compelled  to  commence  pro- 
ceedings de  novo,  subject  to  be  defeated  again  by  similar 
conduct  of  the  defendant.' 

§  303.  Nature  and  functions  of  a  lis  pendens.  —  Under 
the  methods  of  legal  procedure  and  practice  of  the  present 
day,  a  lis  pendens  is  a  notice  of  the  actual  pendency  of  a  suit 
or  other  judicial  proceeding.'  It  has  been  said  that  the  sole 
object  of  a  lis  pendens  is,  to  keep  the  subject  in  controversy 
within  the  jurisdiction  of  the  court  until  the  judgment  has 
been  entered,  so  that  it  will  be  effective  and  binding  on  the 
parties  to  the  action  and  on  all  parties  dealing  with  them, 
and  on  the  subject-matter  of  the  controversy."  The  principal 
doctrine  of  a  notice  of  pendency  of  action  is,  that  a  pur- 
chaser or  assignee  of  the  subject-matter  of  a  litigation  will 
be  as  fully  bound  by  the  final  judgment  in  the  action  or 
proceeding,  though  not  made  a  party  thereto,  as  would  the 
original  owner  and  party  to  the  action,  if  he  had  continued 
to  own  the  subject-matter  in  dispute. 

The  modern  doctrine  of  lis  pendens  is  based,  not  upon  the 
theory  that  a  pending  suit  is  constructive  notice  to  all 
the  world,  like  a  recorded  deed,  but  upon  the  ground  that  the 
law  will  not  allow  litigant  parties  to  give  to  others,  pending 
the  litigation,  rights  to  the  property  in  dispute,  so  as  to 
prejudice  the  rights  of  contesting  parties  and  to  defeat  the 
execution  of  the  decree  to  be  entered  in  the  cause.* 

The  function  of  a  lis  pendens  has  been  said  to  be  the 
enforcement  of  the  well  known  legal  maxim  pendente  lite 
nihil  innovetur.  The  rule  rested  in  its  origin  upon  the  pre- 
sumption that  every  man  was  attentive  to  what  was  passing 

'  See  Lament  r.  Cheshire,  65  N.  Walden,  1  La.  An.  46  (1846) ;  Ben- 

T.  30,  36  (1875);  Murray  v.Lylbum,  nett  v.  Chase,  21  N.  H.  (1  Post.) 

2  Johns.   Ch.   (N.   T.)  441  (1817) ;  582  (1850). 

Hayden  v.  Bucklin.  9  Paige  Ch.  (N.  »  See  Co.  Litt.  344  b. 

T.)  513  (1842) ;  Gaskell  v.  Durdin,  3  *  Dovey's  Appeal,  97  Pa.  St    158 

Ball  &  B.  167  (1812).  (1881). 

'  City  Bank  of  New   Orleans  v. 


362  NATURE  AND  FUNCTIONS  OF  LIS  PENDENS.     [§  304. 

in  the  courts  of  his  country,  and  is  founded  upon  the  broad 
principle  of  public  policy.  It  was  necessary  in  order  to 
prevent  the  fraudulent  alienation  and  transfer  of  property, 
pending  the  adjudication  of  rights  which  might  be  affected 
thereby.*  In  the  growth  of  the  procedure  and  practice  of 
the  courts  it  was  early  found  necessary,  to  the  effectual 
administration  of  justice,  that  the  decisions  of  courts  of 
equity  should  in  some  way  be  made  binding,  not  only  on  the 
litigant  parties,  but  also  on  all  parties  who  might  derive  title 
from  them  pendente  lite,  whether  with  or  without  actual 
notice  of  the  suit.*  The  notice  of  pendency  of  action  or  Hi 
ffudens  thus  came  into  use  as  a  matter  of  necessity.  It  is 
purely  a  rule  of  practice  and  is  designed  to  make  the  decrees 
of  a  court  binding  upon  all  parties  who  may  acquire  rights 
from  or  under  the  parties  to  the  suit  pending  the  action.* 

§  304.  When  lis  pendens  becomes  operative. — A  notice 
of  pendency  of  action  does  not  become  operative  until  the 
summons  has  been  served  in  some  manner  ;*  neither  will 
the  notice  become  effective  until  the  filing  of  the  complaint.* 
A  subsequent  order  directing  the  filing  of  a  lis  pendens  nunc 
pro  tunc  will  not  affect  the  rights  of  an  intervening  creditor.* 
A  lis  pendens  becomes  effective  as  to  third  persons  from  the 
earliest  service  of  the  process  on  any  defendant ;'  and  service 


«  See  Leitch  v.  Wells,  48  N.  Y.  (14  Pet.)  323  (1840) ;  bk.  10  L.   ed. 

608  (1872) ;  Hopkins  v.  M'Laren,  4  476. 

Cow.  (N.  Y.)  667  (1825) ;  Murray  v,  «  Sherman  v.  Bemis,  58  Wis.  343 

Eallou,  1   Johns.    Ch.   (N.  Y.)  566  (1883).     See  Grant   v.   Bennett,   96 

(1815)  ;  White  v.  Carpenter,  2  Paige  111.  513  (1880). 

Ch.   (N.  Y.)  217  (1830) ;  Jackson  v.  6  Weeks  v.  Tomes,  16  Hun  (N.  Y.) 

Losee,   4   Sandf.   Ch.   (N.   Y.)  381  349(1878). 

(1846)  ;    Jackson    v.    Andrews,     7  '  Hayden  v.  Bucklin,  9  Paige  Ch. 

Wend.  (N.  Y.)  153  (1831) ;  Murray  (N.  Y.)  513  (1842).     In  this  case  the 

V.  Blatcliford,  1  Wend.  (N.  Y.)  583  court  held,  that  personal  service  of 

(1828) ;  Swett  v.  Poor,  11  Mass.  549  the  subpojna  is   not    necessary    to 

(1814).  create  a  lis  pendens,  which  is  con- 

-  Lamont  v.  Cheshire,   65  N.  Y.  slructive  notice  to  third  persons  of 

30,  36  (1875).  the    commencement    of    a    suit    in 

*  Bishop  of  Winchester  v.  Paine,  chancery  ;  and  where  the  subpoena 
11  Ves.  194  (1805).  can  not  be  served  personally,  a  ser- 

*  Grant  v.   Bennett,   CO    111.    513  vice  upon  the  defendant's  wife  or 
(1830) ;  Games  v.   Slilcs,   39  U.  S,  other  member   of   his    family,    of 


§  305.]     DUEATION  AlO)  EXTENT  OP  LIS  PENDENS.  363 

on  one  of  two  defendants  is  sufficient  to  create  a  lis  pendens} 
But  the  notice  provided  for  by  statute  will  be  of  no  effect 
until  filed.'  Yet  where  a  party  appears  and  is  heard,  notice 
will  be  presumed.* 

Notice  in  a  foreclosure  suit  will  be  good  from  the  service 
of  the  summons  in  the  action  on  any  of  the  defendants, 
although  the  owner  of  the  equity  of  redemption  may  not  yet 
have  been  served.*  A  lis  pendens  filed  in  an  original  suit  to 
foreclose  a  mortgage  affords,  as  to  all  defendants,  construc- 
tive notice  of  all  cross-suits.'  A  writ  of  error  is  a  new  suit, 
and  a  lis  pendens  therein  will  not  become  effective  until  the 
service  of  the  summons.* 

§  305.    Duration  and  extent  of  a  lis  pendens.  —  The 

operation  of  a  lis  pendens  as  a  notice  continues,  if  the  suit  is 
not  abandoned,  until  it  is  closed  by  a  final  decree,  provided 
it  is  prosecuted  with  reasonable  diligence  and  in  good  faith ; 
otherwise,  a  purchaser  who  has  no  actual  notice,  will  not  be 
bound  by  it.*  A  notice  of  lis  pendens  has  in  no  case  an 
extra  territorial  application,  and  is  not  effective  beyond 
the  jurisdiction  of  the  court  in  which  the  venue  of  the  action 
is  laid.* 

A  notice  of  lis  pendens  relates  only  to  the  voluntary  alien- 
ation and  incumbrance  of  the  property  by  a  defendant 
pending  a  suit  in  respect  to  it,  and  does  not  affect  other 
parties  asserting  rights  adverse  to  the  defendant  ;*  nor  is  it 


suitable  age  and  discretion,  at  the  ^  Hammond  v.  Paxton,  68  Mich. 

defendant's  place  of  residence,  will  893  (1885).     See  Durand  v.   Lord, 

be  sufficient.  See  Williamson  v.  Wil-  115  111.  610  (1886). 

liams,  11  Lea  (Tenn.)  355  (1883).  »  Holbrook  v.   New  Jersey  Zinc 

»  Myrick  v.  Selden,  36  Barb.  (N.  Co.,    57   N.    Y.    616  (1874).      See 

T.)  15.  22  (1861).  Jeff  res  v.  Cochrane.  48  N.  Y.  671 

*  Leitch  V.  Wells,  48  N.  Y.  585  (1872) ;  Shelton  v.  Johnson,  4  Sneed 

(1872).  (Tenn.)  672  (1857). 

»  See  Odell  v.  DeWitt,  58  N.  Y.  »  Becker  v.  Howard,  4Hun(N.  Y.) 

643  (1873).  359  ( 1875 ) ;  8.  0.  6  T.  &  C.  ( N.  Y. ) 

«  Fuller  V.  Scribner,  76  N.  Y.  190  603  ;    aff'd  66  N.  Y.  5  ;    Stuyvesant 

(1879),  affirming  16  Hun  (N.  Y.)  130.  v.  Hall,  2  Barb.   Ch.   (N.  Y.)  151 

*Hall  Lumber  Co.  v.  Gustin,  54  (1847);  Harrington  v.  Slade,  22  Barb. 

Mich.  624(1884).  (N.   Y.)  161  (1856).    See  Sears  r. 

MVooldridge   v.    Boyd,    13  Lea  Hyer,  1  Paige  Ch.  (N.  Y.)  483  (1829). 
(Tenn.)  151  (1884). 


364:  DURATIOiV  AND  EXTENT  OF  LIS  PENDENS.      [§  305. 


notice  to  one  who  rents  the  premises  from  a  person  not 
a  party  to  the  suit.'  The  notice  of  lis  pendens,  after  the 
complaint  has  been  filed  and  the  summons  has  been  issued 
in  an  action,  is  notice  only  of  what  those  papers  contain.  It 
can  not  extend  beyond,  nor  in  any  way  affect  property  not 
tiie  subject  of  the  action,  which  must  be  specifically 
described.* 

It  is  now  generally  conceded  that,  independent  of  statutory 
regulations,  the  mere  commencement  of  an  action  in  a  court  of 
law,  or  the  filing  of  a  bill  in  equity  affecting  the  title  to  real 
estate,  is  notice  to  all  the  world'  and  creates  a  lis  pendens;*  any 
one  purchasing  property,  pending  a  litigation,  takes  the  title 
charged  with  notice  of  the  suit,*  and  subject  to  the  determin- 
ation thereof.'    Such  an  action  is  usually  deemed  commenced 


'  Thompson  v.  Clark,  4  Hun  (N. 
Y.)  164  (1875) ;  8.  c.  6  T.  &  C.  (N. 
Y.)  510. 

'Griffith  V.  Griffith,  Hoff.  Ch. 
(N.  Y.)  155  (1839),  affirming  9  Paige 
Ch.  (N.  Y.)  315.  See  Fitzgerald  v. 
Blake,  42  Barb.  (N.  Y.)  513  (1864) ; 
B.  c.  28  How.  (N.  Y.)  Pr.  110. 

*  One  is  not  charged  with  notice 
of  a  suit  concerning  a  collateral 
matter  not  necessarily  appearing  to 
affect  his  rights,  especially  where 
the  complaint  has  not  been  filed. 
Zoeller  v.  Riley,  100  N.  Y.  102 
(1885). 

<  See  Stern  v.  O'Connell,  35  N.  Y. 
104,  106,  (1866) ;  Jackson  y.  Dicken- 
son, 15  Johns.  (N.  Y.)  309,  315 
(1818);  8.  c.  8  Am.  Dec.  236; 
Murray  v.  Ballou,  1  Johns.  Ch.  (N. 
Y.)  566,  576  (1815);  Hayden  v. 
Bucklin,  9  Paige  Ch.  (N.  Y.)  512 
(1842);  Center  v.  Planters'  and 
Merchants'  Bank,  23  Ala.  743  (1853); 
Green  v.  White,  7  Blackf.  (Ind.) 
242  (1844) ;  Allen  v.  Mandaville,  26 
Miss.  399  (1853);  Herrington  v, 
Herrington,  27  Mo.  560  (1858); 
Shelton  v.  Johnson,  4  Sneed  (Tenn.) 
672  a857) ;  8.  c.  70  Am.  Dec.  265. 


*  Although  a  purchaser  pendent* 
lite  is  chargeable  with  notice  of  the 
rights  of  a  party  claiming  adversely 
to  his  vendor,  yet  the  purchaser  is 
not  l)ound  by  a  judgment  rendered 
in  a  subsequent  suit,  based  on  thn 
same  cause  of  action,  to  which  h« 
was  not  made  a  party.  Randall  v. 
Snyder,  64  Tex.  350  (1885). 

•  Cleveland  v.  Boerum,  23  Barb. 
(N.  Y.)  201  (1856)  ;  s.  c.  27  Barb. 
(N.  Y.)  252  ;  3  Abb.  (N.  Y.)  Pr.  294; 
Harrington  v.  Slade,  22  Barb.  (N. 
Y.)  161,  166  (1856);  Griswold  v. 
Miller.  15  Barb.  (N.  Y.)  520  (1851) ; 
Zeiter  v.  Bowman,  6  Barb.  (N.  Y.) 
133  (1849) ;  Murray  v.  Lylburn,  2 
Johns.  Ch.  (N.  Y.)  441  (1817); 
Murray  v.  Ballou,  1  Johns.  Ch.  (N. 
Y.)  566  (1815) ;  Hayden  v.  Bucklia, 
9  Paige  Ch.  (N.  Y.)  512  (1842); 
Jackson  v.  Losee,  4  Sandf .  Ch.  (N. 
Y.)  381  (1846) ;  Fash  v.  Ravesies,  33 
Ala.  451  (1858) ;  Gil  man  v.  Hamil- 
ton, 16  111.  225  (1854);  Kern  t. 
Hazlerigg,  11  Ind.  443  (1858) ;  s.  C. 
71  Am.  Dec.  360  ;  Watson  v.  Wil- 
son, 2  Dana  (Ky.)  406  (1834) ;  8.  C. 
26  Am.  Dec.  459;  Debell  v.  Fox- 
worthy  s  Heirs,  9  B  Hon.  (Ky.)  228 


§  306.] 


filSTOEY    OF — LN   NEW    YOKK. 


365 


from  the  service  of  the  summons,*  but  a  lis  pendens  does 
not  operate  so  as  to  affect  the  conscience  or  legal  rights  of 
a  purchaser,  until  the  court  has  acquired  jurisdiction  of  the 
subject-matter  of  the  action.'  A  pending  suit  is  not  notice 
of  anything  beyond  the  matters  that  can  be  tried  therein.' 

§  306.  History  of  the  doctrine  in  New  York.— The 
history  and  principles  of  the  general  doctrine  of  lis  pendens 
are  fully  set  forth  by  Chancellor  Kent  in  Murray  v.  Ballou,* 
and  in  Murray  v.  Lylburn.*  The  whole  law  on  the  subject,  it 
has  been  said,  may  be  found  in  these  two  cases,  subsequent 
cases  having  merely  exemplified  and  applied  the  law  as 
there  expounded  by  the  learned  chancellor.* 

Prior  to  the  enactment  of  any  statute  in  New  York,  the 
pendency  of  an  action  in  equity  was,  of  itself,  notice  to  all 


(1848)  ;  TalboU's  Exi-s.  v.  Bell's 
Heirs,  5  B.  Mon.  (Ky.)  320  (1845) ; 
B.  c.  43  Am.  Dec.  126  ;  Masson  v. 
Saloy,  12  La.  An.  776  (1857) ;  Shot- 
well  V.  LawsoD.  30  Miss.  27  (1855); 
B.  c.  64  Am.  Dec.  145 ;  Hersey  v. 
Turbett,  27  Pa.  St.  418  (1856). 

'  Harrington  v.  Slade,  22  Barb. 
(N.  Y.)  161  (1856) ;  Murray  v.  Ballou, 
1  Johns.  Ch.  (N.  Y.)  566,  576  (1815); 
Griffith  V.  Griffith,  Hoff.  Ch.  (N. 
'Y.)  153  (1839) ;  Weber  v.  Fowler,  11 
How.  (N.  Y.)  Pr.  458  (1854) ;  Hovey 
V.  Hill,  3  Lans.  (N.  Y.)  167.  170 
(1870);  Parks  v.  Jackson,  11  Wend. 
(:N.  Y.)  442  (1833). 

In  Michigan  it  is  held  that  a  suit 
and  a  cross-suit  constitute  but  one 
action,  and  that  notice  of  the  suit  is 
notice  of  the  cross-suit  also.  Thus, 
where  in  an  original  action  to  fore- 
close, a  lis  pendens  was  filed,  but  was 
not  filed  with  a  cross-complaint, it  was 
held  that  the  lis  pendens  in  the  origi- 
nal action  was  constructive  notice  to 
all  of  the  defendants  under  the 
cross-complaint  also  ;  The  Hall  liUm- 
ber  Co.  v.  Gustin,  54  Mich.  625 
(1884).  But  it  is  held  in  Kentucky 
that  where  a  mortgagee  has  sued  to 


foreclose  his  mortgage,  and  made 
another  mortgagee  a  defendant,  an 
action  by  the  latter  will  not  constitute 
a  lis  pendens  until  he  files  his  cross- 
petition  and  causes  a  process  to  be 
issued.  Hart  v.  Hayden,  79  Ky.  346 
(1881). 

*  Carrington  v.  Brents,  1  McL.  C. 
C.  167  (1832).  See  Murray  v.  Ballou, 
1  Johns.  Ch.  (N.  Y.)  566  (1815); 
Worsley  v.  Scarborough,  3  Atk. 
392  (1746);  Bishop  of  Winchester 
V.  Payne,  11  Ves.  194  (1805);  Sorrell 
V.  Carpenter,  2  P.  Wms.  482  (1728). 

*  Weilei-  V.  Dreufus,  26  Fed.  Rep. 
824  (1886). 

*  1  Johns.  Ch.  (K  Y.)  566  (1815). 
»  2  Johns.  Ch.  (N.  Y.)  441  (1817). 
«  See  Leitch  v.   Wells,  48  N.  Y. 

585  (1872)  ;  Winston  v.  Westfeldt, 
22  Ala.  760  (1858);  s.  c.  58  Am. 
Dec.  278 ;  ]Mims  v.  West,  38  Ga.  18 
(1868) ;  Stone  v.  Elliott,  11  Ohio  St. 
252  (1860) ;  Diamond  v.  Lawrence 
Co.,  37  Pu.  St.  353  (1860);  s.  c.  78 
Am.  Dec.  429  ;  Kieffer  v.  Ehler,  18 
Pa.  St.  388  (1852);  City  of  Lexington 
V.  Butler,  81  U.  S.  (14  Wall.)  283 
(1871) ;  bk.  20  L.  ed.  809  ;  Durrant 
V.  Iowa  Co.,  Woolw.  C.  C.  69  (1864). 


366  HISTOllY  UF  LIS  PE]yDi:XS  LN  2iEW  YOltK.      [^  uU7. 

parties  who  had  any  interest  in  it,  or  in  the  subject- 
matter  of  the  controversy.  Since  the  adoption  of  the  Code 
the  time  of  filing  the  notice  has  been  frequently  changed. 
Prior  to  1 85 1  the  notice  of  lis  pendens  could  be  filed  only  at 
the  time  of  commencing  the  action  ;  by  an  amendment  of 
that  year  the  time  of  filing  the  notice  was  made  to  depend 
upon  the  time  of  filing  the  complaint,  and  another  amend- 
ment in  1862  provided  that  the  action  should  be  deemed 
commenced,  for  the  purposes  of  that  section  only,  from  the 
time  of  filing  the  notice  of  the  pendency  of  the  action. 

The  early  doctrine  and  practice  of  lis  pendens,  though 
seemingly  necessary  to  give  effect  to  chancery  decrees  and 
to  obviate  the  inconvenience  of  a  constant  change  of  parties, 
at  times  worked  great  injustice  to  innocent  persons.  To 
remedy  this  evil  many  of  the  states  early  passed  statutes,' 
which  generally  provided  in  substance,  that,  in  order  to 
render  the  filing  of  a  bill  in  chancery  constructive  notice 
to  a  purchaser  of  real  estate  pending  a  suit  affecting  it,  the 
complainant  must  at  the  same  time  file  with  the  clerk  of 
the  court  in  the  coynty  in  which  the  land  was  situated,  a 
notice  of  the  pendency  of  the  suit."  The  notice  is  always 
required  to  be  filed  with  the  officer  who  is  charged  by  law 
with  the  duty  of  keeping  the  records  of  transfers,  whether 
that  officer  be  the  "  clerk  of  the  court,"  as  in  New  York  • 
the  "  register  of  deeds,"  as  in  Wisconsin,  or  the  "  county 
recorder,"  as  in  Ohio. 

§  307*  Contents  of  notice  of  lis  pendens.— The  notice  of 
lis  pendens  in  New  York  must  contain  (i)  the  names  of  the 
parties  to  the  action;  (2)  a  statement  of  the  object  of  the  action; 
(3)  a  description  of  the  property  in  the  county  where  the  notice 
is  filed,  affected  by  the  action  ;  (4)  the  date  of  the  mortgage  ; 
(5)  the  parties  to  the  mortgage ;  (6)  the  time  of  recording 
the  mortgage,  and  (7)  the  place  where  the  mortgage  is 
recorded."  But  it  is  not  absolutely  necessary  to  the  vahdity 
of   the   notice   that   all   these   particulars,  where   required. 


»  See  N.  T.  Act,  1823  (L.  1823,  chap.  182.  §  11). 

'  See  N,  Y.  Code  Civ.  Proc.  §§  1670, 1673. 

» N.  y.  Code  Civ.  Proc.  §§  1G31, 1670  ;  N.  T.  Supreme  Court  Rule  60. 


§  307.]        CONTENTS  OF  LIS  PENDENS.  367 

should  be  given  with  minuteness  and  entire  accuracy. 
For  instance,  the  names  of  the  parties  are  always  required, 
yet  if  the  name  of  a  defendant  should  be  misspelled,  or  if 
a  middle  letter  should  be  erroneously  inserted  in  his  name,' 
the  notice  would  not  be  affected  thereby,  because  of  the 
well  settled  and  well  known  rule  of  law  that  middle  letters, 
although  descriptive,  are  not  essential  parts  of  a  name;'  even 
the  addition  or  omission  of  the  whole  middle  name  would 
not  vary  the  rule.* 

One  of  the  requisites  of  a  lis  pendens  is  that  it  shall  state 
where  the  mortgage  is  recorded  ;  but  if  the  notice  describes 
the  premises,  giving  the  ward  and  county  in  which  they  are 
situated,  and  states  that  the  mortgage  was  recorded,  without 
stating  in  what  county,  it  would  seem  to  be  a  sufficient 
compliance  with  the  statute,*  because  the  statutes  of  the 
various  states,  regulating  the  recording  of  transfers  and 
incumbrances,  designate  where  all  such  instruments  shall 
be  recorded,  which  is  always  in  the  county  where  the  prem- 
ises are  situated  ;  and  since  every  person  is  bound  to  take 
notice  of  public  statutes,  the  notice  being  filed  in  the  office 
where  the  mortgage  is  recorded,  no  one  reading  the  notice 
and  having  a  knowledge  of  the  statute  can  be  misled. 
The  New  York  Court  of  Appeals  say,*  that  the  object  of  the 


'  In  the  case  of  Weber  v.  Fowler,  306  (1818) ;  Benson  v,  Heathorn,  1 

11  How.  (N.  Y.)  Pr.  458  (1854).  the  Younge  «fe  Col.  Ch.  328  (1842). 

name  of  a  defendant  was   indexed  '  Roosevelt  v.  Gardinier,  2  Cow. 

'  'John  F.  Fowler"  in  the  notice  of  lia  (N.  Y.)  463  (1824) ;  Milk  v.  Christie, 

2)endens,  instead  of  "John  Fowler,"  1  Hill  (N.  Y.)  102  (1841) ;  Weber  v. 

his  true  name  ;  the  court  held  that  Fowler,  11  How.   (N.  Y.)  Pr.  458 

the  notice  was  sufficient  to  put  the  (1854) ;  People  v.  Collins,  7  Johns, 

purchaser  pendente  lite  on  inquiry,  (N.  Y.)  549  (1811) ;  Franklin  v.  Tal- 

and  to  charge  him  with  all  knowl-  madge,  5  Johns.  (N.  Y.)  84  (1809). 

edge  to  which  the  inquiry,  if  made,  «  Roosevelt  v.  Gardinier,  2  Cow. 

would  have  led,  and  therefore  to  be  (N.  Y.)  403  (1824) ;  Milk  v.  Christie, 

a  substantial  compliance  with  the  1  Hill  (N.  Y.)  102  (1841) ;  Franklin 

requirements  of  the  statute.      See  v.   Talmadge,  6  Johns.  (N.  Y.)  84 

also  Reed  v.  Gannon,  50  N.  Y.  345  (1809). 

(1872) ;    Williamson  v.   Brown,   15  *  Potter  v.  Rowland.  8  N.  Y.  448 

N.    Y.    362    (1857);    Brumfield    v.  (1853). 

Boutall,  24  Hun  (K  Y.)  451  (1881) ;  »  See  Potter  v.  Rowland,  8  N.  T. 

Jones   V.    Smith,   1    Hare.   43,    55  448,450(1853). 
(1841) ;  Taylor  v.  Baker,  5  Price, 


36S  DESCKIPTIOJN-    OF    PIIEMISES.       [§§  308-309. 

statute  was  to  require  such  a  description  of  the  mortgage  as 
to  apprise  individuals,  having  liens  by  judgment  on  the 
mortgaged  premises,  where  they  could  find  the  record  of 
the  mortgage,  and  that,  this  being  effectually  done,  the  notice 
was  sufficient,  although  it  did  not  follow  the  prescribed  form, 
which  is  said  to  be  merely  directory. 

§  308.  Description  of  premises. — The  mortgaged  prem- 
ises should  be  fully  and  properly  described  in  a  lis  pendens ; 
there  will  not  even  be  a  constructive  notice,  where  the 
property  is  not  specified  in  the  proceedings.*  A  notice 
which  describes  the  premises  simply  as  "all  the  real  property 
of  the  defendant  Brown,  or  in  which  she  may  have  an 
interest,  situated  in  Chenango  county,  New  York,"  has  been 
held  void  for  indefiniteness.*  If  the  notice  of  lis  pendens, 
filed  in  a  mortgage  foreclosure  suit,  describes  the  premises 
incorrectly,  the  mortgagor,  it  has  been  said,  will  be  entitled 
to  have  a  judgment  rendered  against  him  on  default  set 
aside.'  The  notice  of  lis  pendens  should  describe  only  the 
property  actually  to  be  affected  by  the  judgment.* 

§  309.    When  notice  of  lis  pendens  to  be  filed. — The 

New  York  Code  provides  that  a  notice  of  lis  pendens  may 
be  filed  by  the  plaintiff  when  he  files  his  complaint  or  at  any 
time  afterwards,  but  at  least  twenty  days  before  final  judg- 
ment.' Where  the  notice  is  required  to  be  filed  at,  or 
subsequently  to,  the  time  of  filing  the  complaint  and  issuing 
the  summons  thereon,  as  in  New  York,  a  notice  filed  before  the 
issuance  or  service  of  the  summons  has  been  said  to  be 
a  nullity;'  the  better  opinion,  however,  seems  to  be  that  a 
notice  so  filed  is  not  a  nullity,  but  that  it  will  simply  be 


>  Gardner  V.  Peckham,  13  R.  I.  103  (N.  Y.)  Pr.  110  (1864) ;  Griffith  v. 

(1880) ;    Russell    v.    Kirkbride.    62  Grffiith,  Hoff.  Ch.  (N.  Y.)  153  ;  s. 

Tex.  455  (1884).  c.    aflf'd  9  Paige  Ch.   (N.    Y.)  315 

^.Jaffray   v.  Brown,  17  Hun  (N.  (1841). 

Y.)  575  (1879).  «  K  Y.  Code  Civ.  Proc.  §§  1631. 

*  Spraggon  v.  McGreer,  14  "Wis.  1670. 

439  (1861) ;  ISIanning  v.  McClurg,  14  «  Benson  v.  Sayre,  7  Abb.  (K  Y.) 

Wis.  350  (1861).  Pr.  472  (1858),  note  ;  Burroughs  v. 

"Fitzgerald  v.    Blake,   42    Barb.  Reiger,    12  How.  (N.  Y.)  Pr.    171 

^N.  Y.)  513  (1864) ;  s.  c.   28  How.  (1856). 


§  310.]  WHEN  NOHOE  TO  BE  FILED.  369 

inoperative  until  the  summons  is  actually  served,  at  which 
time  it  will  become  operative.* 

The  court  say,  in  Tate  v.  Jordan,'  that  "to  hold  the  notice 
invalid  forever,  because  there  may  have  been  some  interval 
of  time,  however  short,  when  it  was  not  true  in  point  of  fact, 
and  was  therefore  null,  is  to  make  a  rule  of  law  superior 
to  and  independent  of  the  reason  on  which  it  is  founded. 
The  maxim,  cessante  rations,  cessat  quoque  lex,  applies."  And 
where  a  notice  is  filed  without  the  complaint,  even  though 
the  action  has  been  previously  commenced  by  service  of  the 
summons,  it  is  not  valid,'  but  will  become  operative  when 
the  complaint  is  filed.* 

Where  a  notice  of  lis  pendens  is  not  filed  within  the  time 
required,  it  may  be  filed  nujic pro  tunc ;  but  inasmuch  as  the 
notice  is  effective  only  from  the  date  when  it  is  actually  filed, 
such  nunc  pro  tunc  filing  will  not  affect  the  rights  of  third 
parties  acquired  prior  to  the  date  of  actual  filing.* 

§  310.  Who  may  file  notice  of  lis  pendens.— The  right 
to  file  a  lis  pendens,  being  statutory,  is  an  absolute  right  and 
not  in  any  way  dependent  on  judicial  discretion,'  and  can 
not  be  impaired  by  the  order  of  any  court.^  A  notice  of  lis 
pendens  in  a  foreclosure  suit  is  required,  under  the  statute, 
to  be  filed  by  the  plaintiff,  and  may  be  filed  by  a  defendant, 


>  Farmers'  Loan  «fe  Trust  Co.  v.  v.  Tomlinson,  38  Barb.  (N.  Y.)  641 

Dickson,   9  Abb.    (N.    Y.)    Pr.    61  (1863);    Burroughs   v.    Reiger,    13 

(1859) ;  Waring  v.  Waring,  7  Abb.  How.  (N.  Y.)  Pr.  171  (1856). 

(N.  Y.)  Pr.  472  (1858) ;  Tate  v.  Jor-  »  Weeks  v.  Tomes,  76  N.  Y.  601 

dan,  3  Abb.  (N.  Y.)  Pr.  392  (1856).  (1879),  aff'g  16  Hun  (N.  Y.)  349. 

»  3  Abb.  (N.  Y.)  Pr.  392  (1856).  «  Mills    v.  Bliss,   55    N.   Y.    139 

» Weeks  v.  Tomes,  76  N.  Y.  601  (1873) ;  Niebur  v.  Schreyer,  10  N. 

(1879),  aff'g  16  Hun  (N.  Y.)  349 ;  Y.  Civ.  Proc.  Rep.  72  (1886). 

Leitch  V.  Wells,  48  N.  Y.  585  (1872);  »  Piatt  v.  Mathews,  13  Rep.  (TJ. 

Btem  V.  O'Connell,  35  N.  Y.   104  8.  C.  C.  2d  Ct.  N.  Y.)  581  (1882). 

(1866) ;    Burroughs    v.    Reiger,    12  The  right  to  file  and  to  cancel  a 

How.  (N.  Y.)  Pr.  171  (1856).  notice  of   Us  pendens  being  statu- 

*  Benson  v.  Sayre,  7  Abb.  (N.  Y.)  tory,  the  court  can  not  direct  it  to 

Pr.  472  (1858),  note.     See  Farmers'  be  canceled  unless  some  one  of  the 

Loan  &  Trust  Co.  v.  Dickson,  9  Abb.  events  specified  in  the  statute  has 

(K  Y.)  Pr.  61  (1859);  8.  c.  17  How.  taken  place.     Willis  v.  Bellamy,  53 

(N.  Y.)  Pr.  477 ;  Tate  v.  Jordan,  3  N.   Y.   Supr.   Ct.  (31  J.   &  8.)  94 

Abb.  (N.  Y.)  Pr.  392  (1856) ;  Butler  (1886). 

(Si) 


370  BECORDING    AXD    INDEXING    LIS    PENDENS.    [^'311. 

Avhere  he  sets  up  in  his  answer  a  counter-claim,  alleging  a 
joint  interest  of  parties  in  certain  real  property,  and  demands 
a  judgment  affecting  the  title  thereto.'  In  such  a  case  the 
defendant  filing  the  notice  is  regarded  as  a  plaintiff,  and  the 
plaintiff  as  a  defendant.''  And  where  the  defendant  sets  out 
and  claims  the  protection  of  certain  rights  in  the  land 
involved  in  the  suit,  it  becomes  necessary  for  him  to  file  a 
lis  pendens,  in  order  to  protect  or  to  preserve  such  rights  as  he 
may  be  adjudged  to  have  ;  because  a  purchaser  is  not  charge- 
able with  constructive  notice  of  infirmities  in  his  vendor's 
title,  by  reason  of  an  equitable  owner's  assertion  of  his  rights 
in  his  answer  in  a  foreclosure  suit,  if  by  the  judgment  therein 
it  appeared  that  a  sale  of  the  premises  had  been  regularly 
authorized,  and  title  in  that  manner  acquired  by  his  vendor, 
who  was  the  purchaser  of  the  premises  on  the  foreclosure  sale. 
The  purchaser  is  not  bound  to  look  so  far  into  the  pleadings 
as  to  inform  himself  of  the  contents  of  such  answer,  but  is 
only  required  to  consult  the  judgment  itself.* 

§  311.     Recording  and  indexing  lis  pendens. — The  New 

York  Code  of  Civil  Procedure,*  requires  each  county  clerk, 
with  whom  a  notice  of  lis  pendens  is  filed,  on  the  payment  of 
his  fee,  to  record  and  index  such  notice  immediately,  in 
<i  book  kept  in  his  office  for  that  purpose.  The  party  filing  a 
notice  of  pendency  of  action  is  required  to  indicate  at  the 
toot  thereof,  the  names  of  the  defendants  against  whom  he 
wishes  to  have  the  notice  indexed.*  Some  attorneys  require 
the  notice  to  be  indexed  only  against  the  names  of  the  owners 
of  the  fee  title ;  but  the  safer  practice  is  thought  to  be  to 
require  it  to  be  indexed  against  the  names  of  all  the 
defendants. 

Where  a  defendant  sets  up  in  his  answer  a  counter-claim, 
upon  which  he  demands  an  affirmative  judgment  affecting 
the  title  to,  or  the  possession,  use  or  enjoyment  of,   real 


'  N.  Y.  Code  Civ.  Proc.  §  1G31,  «  Miller  v.  McGuckin,  15  Abb.  (N. 

1673.     See  Niebur  v.  Schreyer,  10  T.)  N,  C.  204  (1884). 

N.  Y.   Civ.  Proc.  Rep.   73  (1886) ;  *  N.   Y.  Code  Civ.  Proc.  §  1672. 

s.  c.  1  N.  Y.  St.  Rep.  626.  See  Isaacs  v.  Isaacs,  61  How.   (N. 

*  New    York    Code    Civ.     Proc.  Y.)  Pr.  369  (1881). 

§  1673.  t  See  N.  Y.  Code  Civ.  Proc.  §  1672. 


§  312.]  EFFECT    OF   LIS    PENDENS.  371 

property,  he  may,  at  the  time  of  filing  his  answer,  or  at  any 
time  afterwards  before  final  judgment,  file  a  notice  of  the 
pendency  of  the  suit  similar  to  that  filed  by  the  plaintiff  in 
such  action.  The  rules  governing  the  filing  of  a  /is  pen- 
dens by  a  defendant,  are  the  same  as  those  applicable 
to  a  like  notice  filed  by  a  plaintiff.  For  the  purpose 
of  such  an  application,  the  defendant  filing  a  notice 
is  regarded  as  a  plaintiff,  and  the  plaintiff  is  regarded 
as  a  defendant.' 

§  312.  Effect  of  notice  of  lis  pendens. — The  proper 
filing  of  a  notice  of  lis  pendens  is  constructive  notice  of  the 
pendency  of  the  action  to  all  subsequent  purchasers  or 
incumbrancers  of  the  land  affected  thereby,  and  is  a  substi- 
tute for  actual  notice  ;"  it  is  as  effective  against  a  valid 
transfer  or  incumbrance'  of  the  property  described  in  it  as 
an  injunction  would  be.*  Any  subsequent  sale  or  incum- 
brance of  the  property  pending  the  suit,  will  be  invalid  as 
against  the  party  filing  the  notice,'  because  any  one  pur- 
chasing after  the  notice  becomes  operative,  takes  the  property 
subject  to  the  claims  of  the  plaintiff.'  The  effect  of  filing  a 
notice  of  lis  pendens  will  not  be  defeated  by  its  having  been 
lost  from  the  files,  or  not  having  been  properly  entered, 
through  no  fault  of  the  plaintiff.^  The  notice  of  lis  pendens 
binds  all  parties  to  the  action,  together  with  all  purchasers 
from  them,  and  all  parties  claiming  under  them,  subsequently 


'  See  Niebuhr  v.  Schreyer,  10  N.  mortgat^ee  ;    Hards  v.   Connecticut 

Y.  Civ.  Proc.  Rep.  72  (1886);  8.  c.  Mut.  L.  Ins.  Co.,  8  Biss.  0.  C.  234 

1  N.  Y.  St.  Rep.  626  ;  N.  Y.  Code  (1878) ;  s.  c.  6  Rep.  420. 

Civ.  Proc.  §  1673.  "•  Stevenson  v.   Fayerweather,  21 

2  Chapman  v.  West,  17  N.  Y.  125  How.  (N.  Y.)  Pr.  449  (1860). 

(1858) ;  8.  c.  10  How.  (N.  Y.)  Pr.  "  Grider  v.  Payne,  9  Dana  (Ky.) 

367  ;  Hall  v.  Nelson,  14  How.  (N.  190  (1839). 

Y.)  Pr.  32  (1856) ;  s.  c.  23  Barb.  (N.  «  Chapman  v.  West,  17  N.  Y.  125 

Y.)  88.  (1858) ;  Zeiter  v.  Bowman,  6  Barb. 

•Pending  a    bill    of   foreclosure  (N.  Y.)    133    (1849);    Edmonds   v. 

filed  by  the  mortgagee,   the  mort-  Crenshaw,  1  McC.  (S.  C.)  Eq.  264 

gagor  can  not,  by  a  contract  with  a  (1826). 

mechanic,   not   sanctioned   by   the  '  Heim   v.  Ellis,    49    Mich.    241 

mortgagee,  create  a  lien  which  shall  (1882). 
be  detrimental  to  the  interests  of  the 


372  WHO  AEE  INCUAIBEAXCERS  PENDEiiTE  LITE.  [§313. 

to  the  filing  of  the  same.'     All  who  are  in  privity  with  the 
parties  to  the  action  will  also  be  bound." 

A  lis  pendens  binds  a  purchaser  with  constructive  notice 
of  all  the  facts  which  are  apparent  on  the  face  of  the  plead- 
ings at  the  time  he  takes  his  deed,  and  of  such  other  facts  as 
those  facts  necessarily  put  him  upon  inquiry  for,  and  as  such 
inquiry,  pursued  with  ordinary  diligence  and  prudence, 
would  bring  to  his  knowledge.* 

§  313.  Who  regarded  as  subsequent  incumbrancers. — 
An  assignee  in  bankruptcy  of  a  mortgagor  pending  a  fore- 
closure is  an  incumbrancer  within  the  meaning  of  the 
statute,  and  will  be  bound  by  a  notice  of  lis  pendens  ;^ 
so  also  is  an  assignee  in  bankruptcy  in  a  suit  commenced 
subsequently  to  filing  the  notice,  and  he  will  be  bound 
thereby.*  Likewise,  a  judgment  creditor  will  be  bound  by 
the  notice,  where  his  judgment  was  entered  after  filing  the 
lis  pendens,  although  the  summons  was  served  before  the  lis 
pendens  was  filed  ;*  and  in  a  suit  to  reform  and  to  foreclose 
an  unsealed  mortgage,  a  notice  of  lis  pendens,  filed  prior  to 
the  recording  of  a  deed  by  the  mortgagor  to  a  grantee, 
against  whom  a  judgment  had  been  docketed,  will  save  the 
plaintiff  his  prior  lien  as  against  such  judgment.*     It  will  be 


•  Cleveland  v.  Boerum,  23  Barb.  '  Jones  v.  McNarrin,  68  Me.  334 

(N.  Y.)  201  (1856)  ;  s.  c.  3  Abb.  (N.  (1878). 

Y.)  Pr.  294 ;  aff'd  27  Barb.  (N.  Y.)  <  Hovey  v.  Hill,  8  Lans.  (N.  Y.) 

252  ;  24  N.  Y.  613  ;  Harrington  v.  167  (1870).  See  Lamont  v.  Cheshire, 

Slade,  22  Barb,  (N.  Y.)  162  (1856).  65  N.  Y,  30  (1875),  aff'g  6  Lans.  (N. 

See    Patterson    v.    Brown,    32    N.  Y.)  234  (1872). 

Y.  81  (1865) ;  Chapman  v.  West,  17  »  Cleveland  v.  Boerum,23  Barb.(N. 

N.  Y.  125  (1858),  aff'g  10  How.  (N.  Y.)  201  (1856) ;  afl'd  24  N.  Y.  613 

Y.)  Pr.  367  ;   People  ex  rel.  v.  Con-  (1862).     See  Griswold  v.  Fowler,  6 

nolly,  8  Abb.  (N.  Y.)  Pr.  128  (1858) ;  Abb.  (N.  Y.)  Pr.  113  (1857). 

Griswold  v.  Miller,  15  Barb.  (N.  Y.)  «  See  Fuller  v.  Scribner,  76  N.  Y. 

520  (1851);    Zeiter    v.    Bowman,   6  190(1879). 

Barb.  (N.  Y.)  133  (1849) ;  Thompson  ^  Lebanon  Savings  Bank  v.  Hol- 

V.  Clark,  4  Hun  (N.  Y.)  164  (1875) ;  lenbeck,  29  Minn.  322  (1882).      The 

s.  c.  6  T.  «&  C.  (N.  Y.)  510.  effect  of  properly  filing  a  lis  pendens 

"  Craig  V.  Ward,  1  Abb.  Ct.  App.  will  be  avoided  by  proof  of  actual 

Dec.   (N.  Y.)  454    (1867),    aff'g  36  notice  of  the  unrecorded  deed.     See 

Barb.    (N.   Y.)  377  (1862) ;   s.  c.  3  Slattery  v.   Schwanuecke,  44  Hun 

ADb.  (N.  Y.)  Pr.  N.  S.  235  ;  3  Keyes  (N.  Y.)  75  (1887). 
(N.  Y.)  387. 


§  314.J  LIS   PENDENS UNRECOEDED    DEEDS.  373 

Otherwise,  however,  where  the  judgment  is  docketed  after 
the  fih'ng  of  a  lis  pendens,  but  before  the  filing  of  the  com- 
plaint in  a  foreclosure  suit,  because  notice  of  the  pendency 
of  an  action  to  foreclose  a  mortgage,  though  duly  filed,  is 
inoperative  before  the  filing  of  the  complaint,  and  judgment 
can  not  be  entered  in  the  action  until  twenty  days  after  the 
complaint  has  been  filed.'  A  notice  of  lis  pendens,  filed  in  an 
equitable  action  for  the  dissolution  of  a  partnership,  is  ineffec- 
tive as  against  a  mortgagee  whose  mortgage  ante-dated  the 
notice,  though  it  was  not  recorded  until  after  the  notice 
was  filed.' 

It  was  held  in  an  early  case'  in  New  York,  that  a  judgment 
lien  is  not  a  subsequent  incumbrance  within  the  meaning  of 
the  New  York  Code  ;*  but  in  a  later  case"  it  was  said,  that  a 
judgment  creditor  is  a  subsequent  incumbrancer  within  the 
meaning  of  the  Code,  and  that  where  a  judgment  is  docketed 
subsequently  to  the  filing  of  a  lis  pendens  in  a  foreclosure 
suit,  and  to  the  service  of  the  summons  on  one  of  the  defen- 
dants, the  judgment  creditor  will  be  bound  by  the  decree, 
although  not  made  a  party  to  the  action. 

§  314.  Effect  of  lis  pendens  on  holders  of  unrecorded 
conveyances.— Every  party  whose  conveyance  is  executed 
or  recorded  subsequently  to  the  operation  of  a  nqtice  of 
lis  pendens,  is  considered  a  subsequent  purchaser  or  incum- 
brancer. Thus,  it  has  been  held,  that  where  the  purchaser 
of  mortgaged  premises  omitted  to  record  his  deed,  although 
previously  executed,  until  after  the  filing  of  the  notice  of  lis 
pendens  in  a  foreclosure  suit,  he  was  precluded  from  all 
rights  under  such  deed,  as  against  the  purchaser  under  the 
judgment  in  the  foreclosure  suit,  to  the  same  extent  as 

'  Olson  V.  Paul,  56  Wis.  30  (1882).  irrespective  of  any  knowledge  of  the 

*  Hammond  v.  Paxton,  58  Mich.  judgment  creditor  as  to  the  existence 

394  (1885).  of  such  liens. 
«  Rodgers  v.  Bonner.  45  N.  Y.  379         *  N.  Y.  Code  Civ.  Proc.  §  1671. 

(1871).     In  this  case  the  court  say  »  Fuller  v.  Scribner,  76  N.  Y.  190 

that  a  judgment  is  not  a  specific  lien  (1879),  aff'g  16  Hun  (K   Y.)  130. 

upon  any  specific  real  estate  of  the  See  Prescott  v,  Trueman,  4  Mass. 

judgment  debtor,  but  a  general  lien  627,  630  (1808) ;   s.   c.  3  Am.  Dec. 

upon  all  his  real  estate,  subject  to  all  246. 

prior  liens,  both  legal  and  equitable. 


374  EFFECT    OF   LIS   PENDENS.  [§314. 

though  he  had  been  a  party  to  the  action.*  And  a  mortgage 
given  before,  but  recorded  after,  a  lis  pendens  is  filed,  will  be 
barred  thereby.* 

In  a  case  where  A.  commenced  an  action  to  foreclose  a 
mortgage  on  the  23d  of  July,  and  at  12:30  o'clock  on  that 
day  filed  his  summons  and  complaint  and  notice  of  lis  pendens 
in  the  clerk's  office,  copies  of  the  summons  and  complaint 
were  delivered  to  the  sheriff  within  an  hour  thereafter,  for 
service  upon  the  defendant,  and  were  actually  served  upon 
him  on  the  25th  day  of  the  same  month.  B.  made  a  loan  to 
the  defendant  and  received  a  mortgage  on  the  same  premises 
on  the  same  23d  day  of  July,  between  the  hours  of  two 
and  four  o'clock  P.  M,,  which  was  put  on  record  at  five 
o'clock  of  that  day.  The  court  held  that  B.'s  lien  was 
cut  off  and  barred  by  the  notice  of  lis  pendens  in  A.'s  suit.* 

The  filing  of  a  notice  of  lis  pendens  can  have  no  greater 
effect  against  the  holder  of  an  unrecorded  conveyance  or 
incumbrance  than  making  him  a  party  to  the  suit  would  have 
had,  and  where  no  relief  could  be  obtained  against  him  in  the 
action,  had  he  been  made  a  party,  no  rights  will  be  acquired 
against  him  by  filing  such  a  notice.*  The  notice  of  a  suit 
affects  only  proper  parties  to  the  suit  and  those  claiming 
under  them,  and  no  act  of  the  plaintiff  in  improperly  inserting 
other  names  and  in  filing  the  notice  so  framed  can  affect  the 
rights  of  prior  purchasers  or  incumbrancers  not  properly 
parties  to  the  action.*  Thus,  where  a  purchaser  by  contract 
is  in  possession  of  the  land,  he  is  not  chargeable  with  a  notice 
of  lis  pendens,  and  payments  made  by  him  to  the  vendor  will 
be  held  valid."  Neither  will  a  person  who  claims  title  under 
a  sale  for  taxes  be  bound  by  the  notice.^ 


'  Ostrom  V.  McCann,  21  How.  (N.  "  People  ea; rei.  v.  Connolly,  8  Abb. 

T.)  Pr.  431  (1860).  (N.  Y.)  Pr.  128  (1858),  aflf'g  s.  c.  mb 

'  Ayrault  v.  Murphy,  54  N.    Y.  nom.  Chapman  v.  Draper,  10  How. 

203  (1873) ;  Kindberg  v.   Freeman,  (N.  Y.)  Pr.  367  (1854)  ;  Stuyvesant 

39  Hun  (N.  Y.)  466  (1886).  v.  Hone,  1  Sandl".  Ch.  (N.  Y.)  419 

*  Stern  v.  O'Connell,  35  N.  Y.  104  (1844) ;    s.  c.  aff'd  sub  nom.   Stuy- 
^1866).  vesant  v.  Hall,  2  Barb.  Ch.  (N.  Y.) 

*  Lamont  v.  Cheshire,  65  N.  Y.  30  151  (1847). 

(1875),    aff'g  6  Lans.    (N.   Y.)  234  «  Moyer  v.  Hinman,  13  N.  Y.  180 

(1872).     See  Porter  v.  Pico,  55  Cal.  (1855)  ;  Dwight  v.  Phillips,  48  Barb. 

165,  175  (1880).  (N.  Y.)  116  (1865) ;  Smith  v.  Gage, 


§  315.]        EFFECT   OF   OMISSION   TO   FILE    NOTICE.  375 

§  315.    Effect  of  omission  to  file  notice  of  lis  pendens. — 

Where  a  notice  of  lis  pendens  is  required  by  statute,  its  object 
is  to  give  constructive  notice  of  the  pendency  of  the  suit  to 
all  parties  dealing  with  the  defendant  in  regard  to  the  land, 
the  title  to,  or  the  possession  of,  which  is  to  be  affected 
by  the  suit,  and  to  bind  them  by  the  judgment  in  the  same 
manner  as  though  they  had  originally  been  made  parties  to 
the  action.  Failure  to  file  such  a  notice  will  simply  render  the 
judgment  inoperative  to  bind  subsequent  purchasers  or 
incumbrancers  ;  and  since  the  rights  of  such  persons  only  can 
be  affected,  they  alone  may  be  heard  to  take  advantage  of 
the  omission  to  file  a  notice  of  lis  pendens^ 

A  person  who  parts  with  nothing  of  value  on  receiving  a 
conveyance  of  real  property,  pending  an  action  affecting  the 
title  thereto,  can  not  be  injured  by  not  receiving  notice  of 
the  existence  of  such  an  action,  and  he  will  be  bound  by  the 
results  of  the  action  without  notice  either  actual  or  construc- 
tive of  its  pendency." 

It  was  held  by  the  supreme  court  of  Wisconsin  in  i860,'* 
that  a  failure  to  file  a  notice  of  lis  pendens,  where  required 
by  the  statute,  is  not  such  an  irregularity  as  will  vitiate  the 
judgment  or  cause  it  to  be  reversed  on  appeal.  The  same 
court  said  in  another  case*  of  that  year  that  "the  purpose  and 
object  of  filing  a  lis  pendens  manifestly  is,  to  give  to  all  persons 
not  parties  to  the  suit,  notice  of  the  pendency  of  the  same, 
and  to  make  it  operate  as  constructive  notice  to  any  one  who 
may  become  interested  in  the  property  during  the  litigation. 


41  Barb.  (K  Y.)  61  (1863) ;  Parks  v.  N.   Y.  589,  595  (1854) ;    Ogden  v. 

Jackson,    11    Wend.    (N.    Y.)    443  Jackson,  IJohns.  (N.  Y.)  370  (1806); 

(1833).  Gorham    v.    Stearns,   43    Mass.    (1 

'  Becker  v.  Howard,  4  Hun  (N.  Mete.)  366  (1840) ;  Gibson  v.  Mus- 

Y.)  359  (1875).  kett,  3  Man.  «&  G.  158  (1841) ;  Floo': 

>  Potter  V.  Rowland,  8  N.  Y.  448  v.  Jones,  4  Bing.  20  (1826). 

(1854) ;  White  v.  Coulter,  1  Hun  (N.  »  Boyd  v.  Weil,  11  Wis.  58  (18GC). 

Y.)  357  (1874) ;  s.  c.  3  T.  &  C.  (N.  •*  Boyd  v.   Weil,   11   Wis.   58,  60 

Y.)  608;    Curtis  v.   Hitchcock,    10  (1860).    See  Potter  v.  Rowland,  8 N. 

Paige  Ch.  (N.  Y.)  399  (1843).  Y.  448(1854);  Curtis  v.  Hitchcock,  10 

«Leavitt  v.  Tylee,  1  Sandf.  Ch.  Paige    Ch.    (N.    Y.)    399    (1843); 

(N.  Y.)  207  (1843);  aff'd  in  Shaw  v.  Houghton   v.  Manner,  7   Wis.  244 

Leavitt,   8  Sandf.  Ch.  (N.  Y.)  163  (1850). 
(1845).     See  Brouwer  v.  Harbeck,  9 


376  PEOOF   OF   FILING    NOTICE.  [§316. 

But  we  can  see  no  good  reason  for  holding  that  the  judgment 
is  void  as  to  the  mortgagors,  because  this  notice  was  not  filed, 
or  proof  thereof  duly  made  to  the  circuit  court."  But  the 
following  year  the  same  court  reached  an  opposite  conclusion,* 
overruling  Boyd  v.  Weil,  in  so  far  as  that  case  may  be  sup- 
posed to  sanction  a  contrary  doctrine,'  and  holding  that  when 
it  appears  from  the  record  in  a  foreclosure  suit  that  no  notice 
of  lis  pendens  was  filed  as  required  by  the  statute,  it  will  be  an 
irregularity,  for  which  the  judgment  will  be  reversed  on  the 
application  of  the  mortgagor,  or  of  any  one  interested  in 
the  funds  arising  from  the  sale  of  the  premises. 

§  316.  Proof  of  filing  notice  of  lis  pendens. — Under 
the  New  York  practice  in  all  foreclosure  cases,  the  plaintiff, 
when  he  moves  for  judgment,  must  show  that  a  proper  notice 
of  the  pendency  of  the  action  was  filed  at  the  time  of  filing 
the  complaint,  or  afterwards,  and  at  least  twenty  days 
before  the  motion  for  judgment  is  made,  as  required  by  the 
Code.'  The  Wisconsin  statute  and  practice  are  substantially 
the  same.*  The  proof  of  filing  the  notice  may  be  made  by 
the  affidavit  of  the  plaintiff's  attorney,  or  by  the  certificate 
of  the  clerk  of  the  court  in  the  county  in  which  the  mort- 
gaged premises  are  situated.' 

The  language  of  the  New  York  Code  is  imperative,  and 
the  filing  of  the  proper  notice  in  foreclosure  proceedings  is 
an  indispensable  prerequisite  to  obtaining  judgment."  And 
the  supreme  court  requires  the  plaintiff,  when  he  moves  for 
judgment,  to  show  by  affidavit  or  the  certificate  of  the  clerk 
of  the  county  in  which  the  mortgaged  premises  are  situated, 
that  a  proper  notice  of  the  pendency  of  the  action  has  been 
duly  filed  as  directed  by  its  rules.^     But  this  requirement  is 


'  See  Manning   v.   McClurg,    14  88  (1863) ;  Spraggon  v.  McGreer,  14 

Wis.    350    (1861);      Spraggon    v.  Wis.    439    (1861);      Manning     v. 

McGreer,  14  Wis.  439  (1861).     See  McCIurg,  14  Wis.  350  (1861). 

also  Catlin  v.  Pedricls,  17  Wis.  88  « In    Wisconsin    proof    may    be 

(1863).  made  by  tiie  certificate  of  the  register 

"^  See  Catlin  v.   Pedrick,  17  Wis.  of  deeds  ;  Manning  v.  McClurg,  14 

88  (1863).  Wis.  350  (1861) ;  Boyd  v.  Weil,  11 

3  N.  Y.  Code  Civ.  Proc.  §  1631.  Wis.  58  (1860). 

N.  Y.  Supreme  Court  Rule  60.  «  N.  Y.   Code  Civ.   Proc.  §  1631. 

*  See  Catlin  v.  Pedrick,  17  Wis.  ^  N.  Y.  Supreme  Court  Rule  60. 


§  317.]     DEFECTIVE   AND    AMENDED    LIS    PENDENS.  377 

merely  a  rule  of  practice  and  does  not  affect  the  validity  of 
the  judgment.  If  no  proof  of  filing  the  notice  of  the 
pendency  of  the  suit  is  furnished,  the  judgment  will  be 
irregular,  but  not  void ;'  yet  the  irregularity  is  such  as  will 
vitiate  the  judgment  or  cause  it  to  be  reversed  on  appeal.' 
Where  a  proper  notice  of  lis  pendens  has  been  duly  filed,  and 
there  is  no  objection  to  the  proof  of  such  filing,  the  fact  that 
the  affidavit  of  filing  is  defective,  will  not  render  the  judgment 
void  ;  it  is  a  mere  irregularity  which  may  be  disregarded  or 
amended,*  in  the  absence  of  any  wrong  to  the  defendant.* 
Proof  of  the  filing  of  a  notice  of  lis  pendens  may  be  permitted 
by  the  court  to  be  made  nunc  pro  twic." 

§  317.  Defective  and  amended  notice  of  lis  pendens. — 
A  substantial  compliance  with  the  statute  will  be  sufficient 
in  a  notice  of  lis  pendens*  But  the  property  must  be 
sufficiently  and  correctly  described  -^  it  has  been  held  that  if 
a  notice  of  lis  pendens  describes  the  premises  incorrectly,  the 
mortgagor  will  be  entitled  to  have  a  judgment  rendered 
against  him  on  default  set  aside.*  But  where  all  the  parties 
having  an  interest  in  the  property  are  before  the  court,  and 
have  been  properly  made  parties  to  the  action,  it  is  said  that 
there  can  be  no  objection  to  a  defective  lis  pendens,  because 
no  one  can  be  prejudiced  thereby."  Where  the  original  notice 
of  lis  pendens  is  defective  and  ineffectual,  and  an  amended 
lis  pendens  is  filed  with  or  after  the  filing  of  an  authorized 
amended  summons  and  complaint,  it  will  be  good.'" 


» Potter  V.  Rowland,  8  K  Y.  448  » "White  v.  Coulter,  1  Hun  (]Sr.  Y.) 

(1853) ;  White  v.  Coulter,  1  Hun  (N.  357,  365  (1874) ;  B.  c.  3  T.  &  C.  (N.  Y.) 

Y.)  357  (1874) ;  s.  c.  3  T.  «&  C.  (N.  608. 

Y.)  608 ;    Curtis  v.    Hitchcock,   10  «  Potter  v.  Rowland,  8  N.  Y.  448 

Paige  Ch.(N.Y.)  399  (1848);  Catlinv.  (1854) ;  Weber  v.  Fowler,  11  How. 

Pedrick,  17  Wis.  88  (1863).  (N.  Y.)  Pr.  458  (1854). 

«  Spraggon  V.  McGreer,  14  Wis.  ■>  Jaffrey  v.  Brown,  17Hun  (N.  Y.) 

439  (1861),  overruling  Boyd  v.  Weil,  575  (1879). 

11    Wis.    58    (1860);    Manning  v.  »  Spraggon  v.  McGreer,  14  Wis. 

McClurg,  14  Wis.  350  (1861).  439  (1861). 

8  N.  Y.  Code  Civ.  Proc.  g  723.  «  Totten  v.   Stuyvesant,   3   Edw. 

*  White  V.  Coulter,  1  Hun  (N.  Y.)  Ch.  (N.  Y.)  500,  505  (1841). 

857  (1874) ;  s.  c.  3  T.  «&  C.  (N.  Y.)  ">  Daly  v.  Burchell,  13  Abb.  (K. 

608.  Y.)  Pr.  N.  S.  264  (1872). 


378  DEFECTIVE  AND  AJIEXDED  LIS  PENDEJJJS.      [§318. 

The  court  has  power  to  amend  a  notice  of  lis  pendens  by 
inserting  therein  a  specific  description  of  a  portion  of  the 
premises  which  was  omitted  by  mistake/  or  by  striking  out 
portions  thereof  descriptive  of  property  not  properly 
included  in  such  notice." 

Where,  after  filing  a  notice  of  lis  pendens,  the  complaint  is 
amended  by  striking  out  or  adding  parties,  altering  the 
description  of  the  premises,  or  extending  the  claim,  a  new 
notice  of  lis  pendens  will  be  absolutely  necessary  to  conform 
the  notice  to  the  complaint  in  order  to  enable  proof  of  its 
proper  filing  to  be  made,  and  to  cut  off  the  rights  of  judgment 
creditors  of  such  new  parties,  as  Vv^ell  as  to  make  the  amended 
bill  constructive  notice  to  subsequent  purchasers  and  incum- 
brancers dealing  with  such  new  parties  in  relation  to  the 
mortgaged  premises.*  But  where  the  amendment  consists 
simply  in  adding  new  parties  to  the  action,  without  extending 
the  claim  or  varying  the  description,  a  new  or  amended 
notice  will  be  necessary  only  to  charge  such  new  parties  and 
those  claiming  under  them  with  notice  ;  the  grantees  of  the 
original  parties  will  be  bound  by  the  first  notice.* 

Should  the  complaint  be  amended  by  making  new  parties 
or  by  striking  out  those  already  parties,  or  by  adding  a  new 
description  of  the  premises,  the  attorney  for  the  plaintiff 
will  not  be  able  to  make  the  necessary  proof  of  the  proper 
filing  of  a  notice  of  lis  pendens,  as  required  by  the  Code  and 
practice,  unless  a  new  or  an  amended  notice  is  filed.* 

§  318.  Dormant  lis  pendens.— Where  a  party  is  to  be 
alTected  by  a  pending  suit,  there  should  be  a  "close  and 
continued  prosecution"  of  the  same  to  a  final  determination  ;* 


»  Vanderheyden  v.  Gary,  38  How.  cock,   10   Paige   Ch.   (N.    Y.)   399 

(N.  Y.)  Pr.  367  (1869).  (1843). 

*  Fitzgerald  v.  Blake,  42  Barb.  (N.  »  N.  Y.  Code  Civ.  Proc.  §§  1631, 
Y.)  518  (1864) ;  s.  o.  28  How.  (N.  Y.)  1670 ;  N.  Y.  Supreme  Court  Rule  60. 
I'r.  110.  6  Preston  v.  Tubbin,  1  Vern.  286 

"  Clark  V.  Havens,  Clarke  Ch.  (N.  (1684).      In  order   to    constitute  a 

Y.)  560,  563  (1841) ;  Curtis  v.  Hitch-  litis  pendentia,  it  is  said,  there  must 

cock,   10   Paige    Ch.    (N.    Y.)    399  be  a  continuance  of  litis  contestatio, 

(1843)  ;  s.  c.  2  N.  Y.  Leg.  Obs.  363.  and  something  must  be  done  to  keep 

*  Waring  v.  Waring,  7  Abb.  (N.  it  alive  and  in  force.  Kinsman  v. 
Y.)  Pr.  475  (1858) ;  Curtis  v.  Hitch-  Kinsman,  1  Russ.  &  Myl.  617(1830). 


§  319.]  CANCEIxDfG   LIS   PEifDEUS.  379 

the  lis  pendens  becomes  void  or  dormant,  if  the  action  is  not 
diligently  pursued.'  But  only  unreasonable  or  unusual  negli- 
gence in  the  prosecution  of  a  suit  will  take  away  the  benefit 
of  a  lis  pendens.  * 

§  319.  Canceling  notice  of  lis  pendens. — A  notice  of 
lis  pendens  properly  filed  under  the  provisions  of  the  Code, 
in  an  action  to  foreclose  a  mortgage  on  real  property,  can 
not  be  removed  or  canceled  until  after  the  action  has  been 
settled,  discontinued  or  abated.'  After  the  action  has 
been  settled,  discontinued  or  abated,  or  a  final  judgment 
has  been  rendered  therein  against  the  party  filing  the  notice, 
and  the  time  within  which  to  appeal  therefrom  has  expired, 
or  if  the  plaintiff  unreasonably  neglects  to  proceed,  then  the 
cancellation  rests  in  the  discretion  of  the  court.* 

The  provisions  of  the  Code  of  Civil  Procedure  relating  to 
the  cancellation  of  notices  of  lis  pendens,  confer  that  power 
only  upon  the  court  in  which  the  action  is  pending  ;  the  court 
of  common  pleas  has  no  power  to  order  the  cancellation  of  a 
lis  petidens  filed  in  a  district  court,  where  no  judgment  has 
been  rendered  nor  transcript  filed,  so  as  to  make  the  district 
court  judgment  a  judgment  of  the  court  of  common  pleas.* 
The  question  whether  an  action  is  sustainable  can  not  be 
considered  on  a  motion  to  cancel  a  lis  pendens* 


»  See  Sheridan  v.  Andrews,  49  N.  253,  259  (1880),  and  note ;  Pratt  v. 

Y.  478  (1872) ;  Myrick  v.  Selden,  36  Hoag,  5  Duer  (N.  Y.)  631  (1856) ; 

Barb.  (N.  Y.)  15  (1861) ;  Kinsman  v.  s.  c.  12  How.  (N.  Y.)  Pr.  215. 

Kinsman,  1  Russ.  «&  Myl.  617  (1880).  *  N.  Y.  Code  Civ.   Proc.  §  1674  ; 

» Gossom    V.    Donaldson,    18  B.  Willis     v.     Bellamy,     53    N.     Y. 

Mon.  (Ky.)  230,  237  (1857) ;    3.  c.  Supr.   Ct.  (21   J.   &  S.)  94  (1886) ; 

68  Am.  Dec.  723.  Lyle  v.  Smith,  13  How.  (N.  Y.)  Pr. 

» Mills   V.    Bliss,   55    N.  Y.   139  104  (1856) ;  N.  Y.  Code  Civ.  Proc. 

(1873) ;  Parks  v.  Murray,  2  N.  Y.  §  1674. 

St.  Rep.  135  (1886) ;  Willis  v.  Bell-  '   » Matter  of  Barnum,  (N.  Y.  City 

amy,  53  N.  Y.  Supr.  Ct.  (21  J.  &  S.)  Com.  PI.  Sp.  T.)  N.  Y.  Daily  Reg. 

94  (1886) ;    Wilmont  v.  Meserole,  41  May  29,  (1884). 

N.   Y.   Supr.   Ct.   (9  J.  &  S.)  274  «  Mills    v.    Bliss,    55  N.   Y.   139 

(1876);  Niebuhr  v.  Schreyer,  10  N.  (1873).  See  Pratt  v.  Hoag,  5  Duer  (N. 

Y.  Civ.  Proc.  Rep.  72  (1886) ;  Little  Y.)  631  (1856);  s.  c.  12  How.  (N.  Y.) 

V.  Rawson,  8  Abb.  (N.  Y.)  N.  C.  Pr.  215. 


CHAPTER  XV. 


ANSWERS  AND  DEFENCES. 

AVHO  MAY  ANSWER— DEFECT  IN  PARTIES— ACTION  AT  LAW  ON  BOND— 

DEFECTIVE   EXECUTION    OP   MORTGAGE— INFANCY,  INSANITY, 

IGNORANCE,    ALTERATION. 


§  320.  Generally. 

321.  Right  of  prior  incumbrancers 

to  answer.        ' 

322.  Claimants  of  interest  in  equity 

of  redemption  may  answer. 

323.  When  action  ready  for  trial. 

324.  Insufficiency  of    service   on 

another  defendant. 

325.  Objection  of  defect  in  parties 

— How  made. 

326.  Parties  personally  liable  for 

debt  may  object  to  defect  in 
parties. 

327.  Objection   of    pendency    of 

action   at  law  on  note  or 
bond. 


328.  Objection    of     recovery    of 

judgment  on  note  or  bond. 

329.  Objection  under  the  codes. 

330.  Denial  of  execution  of  mort- 

gage. 

331.  Allegation  of  infancy. 

332.  Foreclosure  of  infants'  pur- 

chase money  mortgage. 

833.  Allegation    of    insanity    of 
mortgagor. 

334.  Defect     in     execution    and 

record  of  mortgage. 

335.  Allegation    of    alteration  of 

instrument. 

336.  Illiteracy  and  negligence. 


§  320.  Generally. — The  answer  of  a  defendant  in  an 
action  brought  to  foreclose  a  mortgage,  is  regulated  in  respect 
to  its  form  by  the  provisions  of  the  Code  of  Civil  Procedure, 
the  same  as  an  answer  in  any  other  civil  action.'  In  such  an 
action  a  defendant  may  plead  the  same  matters  in  defence 
against  the  mortgage,  except  only  the  statute  of  limitations, 
that  he  could  against  the  note  or  bond  which  the  mortgage 
was  given  to  secure."  A  defendant  should  not  serve  a 
general  answer,  merely  admitting  that  the  several  rights  and 
interests  alleged  in  the  complaint  are  correctly  set  forth, 
without  at  the  same  time  setting  up  new  matter  constituting 
a   defence,   counter-claim    or   set-off.     Where   the   defence 


'  N.  Y.  Code  Civ.  Proc.  §  500. 

» Vinton  v.  King,  86  Mass. (4  Allen), 
562  (1862).  See  Hannan  v.  Han- 
nan,  123  Mass.  441  (1877) ;  Freeland 


V.  Freeland,  102  Mass.  475  (1869) ; 
Holbrook  v.  Bliss,  91  Mass.  (9  Allen), 
69  (1864). 


380 


§  321.]         PfilOE   INCUMBKAlfCEES   ANSWEBINQ.  381 

consists  of  new  matters,  by  way  of  avoidance,  the  defendant 
must  set  forth  the  facts  of  his  defence  in  full  and  prove  them 
as  alleged.' 

Where  an  answer  setting  up  no  new  matter  constituting  a 
defence,  counter-claim  or  set-off  is  filed,  the  plaintiff  may 
move  at  a  special  term  of  the  court  to  strike  it  out  as  sham  or 
frivolous,  and  at  the  same  time  apply  for  judgment;  or  he 
may,  upon  previous  notice,  apply  to  the  court  for  judgment 
upon  the  pleadings  as  they  stand.* 

A  mortgagor  or  his  grantee  may  defend  a  foreclosure,  and 
is  entitled,  moreover,  to  reply  to  the  affirmative  matt«r  set  up 
in  the  respective  answers  of  his  co-defendants,  showing  liens  in 
their  favor  upon  the  mortgaged  property,  and  to  have  the 
validity  of  the  same  determined.  As  to  such  matter  his  co- 
defendants  are  to  be  deemed  plaintiffs  and  their  answers  as 
complaints.* 

§  321.  Right  of  prior  incumbrancers  to  answer. — Where 
the  rights  of  prior  incumbrancers  are  correctly  stated  in  the 
complaint,  it  is  not  necessary  for  them  to  appear  and  answer 
in  order  to  protect  their  rights;*  but  where  one  holds  a 
mortgage  upon  property  which  is  of  insufficient  value  to 
satisfy  all  the  liens  upon  it,  he  is  entitled  to  contest  the  exis- 
tence or  the  validity  of  prior  mortgage  liens  asserted  by 
others,  although  his  debt  may  not  be  due,  and  although  his 
mortgage  may  not  have  been  executed  until  after  the  prior 
mortgagees  had  instituted  suit  to  enforce  their  liens.*  Where 
prior  incumbrancers  are  made  parties  defendant,  it  is  not 
necessary  for  them  to  answer  and  to  set  up  the  priority  of 
their  respective  liens,  because  the  entry  of  the  usual  judg- 
ment of  foreclosure  and  sale  will  not  cut  off  nor  in  any  way 
affect  their  liens,  if  they  are  actually  prior  to  the  mortgage 
under  foreclosure.' 


>  Post  V.  Springsted,  49  Mich.  90  (1882).    See  N.  T.  Code  Civ.  Proa 

(1882).  §  521. 

*  Bowman  v.  Marshall,   9  Paige  *  Merchants'  Ins.  Co.  v,  Marvin,  1 

Ch.  (N.  Y.)  78  (1841) ;  N.  T.  Code  Paige  Ch.  (N.  Y.)  557  (1829). 

Civ.    Proc.    §§  537,    545;    N.  Y.  » Hart  v.  Hayden,  79  Ky.  346(1881). 

Supreme  Court  Rule  60.  •  Payn  v.  Grant,  23  Hun  (N.  Y.) 

•Ladd  V.   Mason,   10  Greg.   308  134(1880).     See  an<e  ^§  188-190. 


382  CLAEMANTS  OF  INTEREST  LN  EQUITY.  [§322. 

§  322.  Claimants  of  interest  in  equity  of  redemption 
may  answer. — Defendants  whose  claims  are  against  the 
equity  of  redemption  only,  can  not  file  answers  and  litigate 
their  claims  to  the  surplus  as  between  themselves,  until  it  is 
ascertained  that  there  will  be  a  surplus;  unless  their  liens 
are  upon  different  parcels  of  the  mortgaged  premises,  or 
their  rights  are  of  such  a  nature  as  to  require  them  to  be 
passed  upon  previous  to  the  entry  of  a  decree  of  sale.*  But 
such  defendants  will  always  be  permitted  to  set  out  their 
respective  rights  in  their  answers,  so  far  as  may  be  neces- 
sary to,  enable  the  court  to  make  a  proper  decree  for 
the  sale  of  the  mortgaged  premises  in  parcels,  so  as  to  pro- 
tect the  rights  of  the  several  defendants  upon  the  sale  and 
upon  the  reference  for  the  distribution  of  the  surplus  moneys.* 
And  they  may  also  set  up  in  their  answers  any  claims  they 
have  to  the  equity  of  redemption,  as  incumbrancers  or  other- 
wise, as  against  the  complainant.* 

Where  a  conveyance  of  mortgaged  premises  is  not  made 
by  its  terms  subject  to  a  mortgage,  but  purports  to  convey 
the  whole  title,  and  especially  if  it  contains  full  covenants  of 
warranty,  the  grantee,  not  having  assumed  the  payment 
of  the  mortgage  debt  and  the  amount  thereof  not  having 
been  deducted  from  the  purchase  money,  may  interpose  the 
same  defences  to  the  mortgage  that  the  mortgagor  might 
have  interposed.* 

A  defendant  who  is  entitled  to  relief  against  the  complainant 
or  a  co-defendant,  can  obtain  it  only  by  filing  a  cross-bill  for 


'  Union  Ins.  Co.  v.  VanRensselaer,  Renwick  v.  Macomb,  Hopk.  Ch.  (N. 

4  Paige  Ch.  (N.  Y.)  85  (1833).     See  Y.)  277  (1834) ;  Tower  v.  White,  10 

N.  Y.  Code  Civ.  Proc.  §  521 ;  Far-  Paige  Ch.  (N.  Y.)  395,  397  (1843). 

iners'  Loan  &  Trust  Co.  v.  Seymour,  *  Tower  v.  "White,  10  Paige  Ch. 

9    Paige    Ch.   (N.   Y.)  538  (1842).  (N.  Y.)  397  (1843). 

Prior  to  the  adoption  of  rules  132  »  Tower  v.  White,  10  Paige  Ch. 

and  136  by  the  Court  of  Chancery  in  (N.  Y.)  395  (1843). 

1830,  defendants  who  were  junior  *  Bennett  v.    Keehn,  57  Wis.  582 

incumbrancers  were  not  only  author-  (1883),    distinguishing    Bensley    v. 

ized  to  litigate  their  claims  with  the  Homier,  42  Wis.  631  (1877),  Crocker 

complainant,   but   also    with    their  v.  Bellangee,  6  Wis.  645  (1854),  and 

several  co-defendants  previous  to  a  Milwaukee  M.  &  M.   R.  R.   Co.  v. 

decree  of  sale.     And  as  a  general  Milwaukee  &W.  R.  R.  Co.,  20  Wia 

rule  they  were  required  to  do  so  ;  174  (1865). 


§  323.]  WHEN   ACTION   READY   FOR   TRIAL.  383 

that  purpose.*  As  a  general  rule  a  defendant  will  not  be 
allowed  by  his  answer  to  assail  the  subsequent  mortgage 
of  a  co-defendant,  although  he  alleges  in  his  answer  that  such 
mortgage  is  fraudulent  and  void ;  and  his  co-defendant,  to 
whom  such  subsequent  mortgage  belongs,  will  not  be  required 
to  reply  to  such  answer ;  nor  will  such  answer  be  taken  as 
confessed  by  him  because  of  his  failure  to  reply.  If  one 
defendant  wishes  to  assail  the  mortgage  of  another,  he  must 
file  a  cross-bill  for  that  purpose.' 

§  323-  When  action  ready  for  trial. — Where  a  defen- 
dant raises  substantial  objections  to  a  complaint  by 
demurrer,  or  where  his  answer  sets  up  any  matter  which 
raises  an  issue,  the  plaintiff  will  not  be  permitted  to  proceed 
against  the  other  defendants  until  the  issue  is  ready  for  trial. 
A  foreclosure  is  noticed  for  trial,  placed  upon  the  calendar  and 
brought  on  for  trial,  the  same  as  any  other  equity  cause.  To 
entitle  the  cause  to  be  placed  upon  the  calendar,  the  demurrer 
or  answer  to  the  complaint  must  have  been  interposed  in 
good  faith.  If  it  is  frivolous,  the  plaintiff  may  apply  for 
judgment  on  motion,  without  noticing  the  case  for  trial.* 
A  defendant  in  a  suit  to  foreclose  a  mortgage  can  defend 
only  on  the  grounds  set  up  in  his  answer.* 

Besides  special  defences  or  such  defences  as  arise  out  of  the 
circumstances  of  each  particular  case,  there  are  a  number  of 
general  defences  to  an  action  for  foreclosure  which  will 
be  considered  separately  in  this  and  in  the  following  four 
chapters. 

» BrinkerhofE  v.  Franklin,  21  N.  6  Johns.    (N.  T.)  548,   565  (1810) ; 

J.   Eq.   (6  C.   E.   Gr.)  334  (1871) ;  Beach  v.  Fulton,  8  Wend.   (N.  Y.) 

Vanderveer'3  Admrs.   v.  Holcomb,  573,  584  (1829) ;  Philbrooks  v.  Mc 

21  N.  J.   Eq.   (6  C.  E.   Gr. )  105  Ewen,  29  Ind.  347  (1868) ;  Matteson 

(1870).  V.  Morris,  40  Mich.  52  (1879) ;  Van 

«  BrinckerhofE  v.  Franklin,  21  N.  Dyke  v.  Davis,  2  Mich.  144  (1851) ; 

J.  Eq.  (6  C.  E.  Gr.)  334  (1871).  Hendrix  v.  Gore,  8  Oreg.  406  (1880); 

»  Bowman  v.   Marshall,   9  Paige  Imham  v.  Child,  1  Bro.  Ch.  92,  94 

Ch.  (N.  Y.)  78  (1841) ;  N.  Y.  Code  (1781) ;    Smith  v.   Clarke,   12  Ves. 

Civ.   Proc.  §  537 ;  N.  Y.  Supreme  477,  480  (1806) ;  Clarke  v.  Turton, 

Court  Rule  60.  11  Ves.  240  (1805) ;  GUbert's  Roman 

*  Higman   v.    Stewart,  38  Mich.  Forum,  218. 
513  (1878).    See  James  v.  McKernon, 


384  ANSWEK  OF  DEFECT  Uf   PARTIES.  [§§  32i-325. 

§  324.     Insufficiency  of  service  on  another  defendant. — 

While  a  defendant  may  take  advantage  of  a  want  of  service  or 
of  a  defective  service  of  the  summons  upon  himself,  by  a  special 
appearance  and  plea  in  the  suit,  or  while  he  may  in  such  a  case 
take  no  notice  of  the  suit,  because  he  will  not  be  bound  by 
the  decree  ;  yet,  as  a  general  rule,  he  can  not  object  to  a  want 
of  service  or  to  a  defective  service  of  the  summons  upon 
another  defendant,  who  is  not  a  necessary  party  to  the  suit.' 
But  the  rule  is  otherwise,  if  the  defendant  who  was  defec- 
tively served,  is  a  necessary  defendant."  And  a  junior 
incumbrancer,  who  is  a  co-defendant  with  the  mortgagor  in  a 
foreclosure,  can  not,  on  appeal,  complain  of  the  judgment 
against  such  mortgagor,  on  the  ground  that  it  was  rendered 
without  sufificient  notice  or  service  upon  him.* 

But  a  person,  who  stands  in  the  relation  of  a  surety  for  the 
mortgage  debt,  is  entitled  to  have  the  entire  equity  of  redemp- 
tion applied  in  the  first  place  to  the  payment  of  the  debt,  and 
may  require  all  persons  claiming  an  interest  in  the  mortgaged 
premises  to  be  made  parties  defendant,  in  order  to  make  the 
title  offered  at  the  sale  perfect  against  all  equities,  and  may 
therefore  object  to  a  want  of  service,  or  to  a  defective  or 
insufficient  service,  upon  any  of  such  parties.* 

§  325-    Objection  of  defect  in  parties— How  made.— It 

is  the  right  of  every  person,  who  is  liable  for  any  deficiency  that 
may  arise  upon  the  sale  of  the  premises  on  foreclosure,  to 
require  that  the  whole  equity  of  redemption  be  sold,  and 
to  demand  that  all  persons  necessary  to  be  joined  to  accom- 
plish that  object  be  made  parties  to  the  action,  because  his 
ultimate  liability  for  any  deficiency  makes  it  of  the  highest 
importance  to  him  that  the  whole  title  to  the  premises  be 
sold,  in  order  that  the  largest  sum  possible  may  be  realized.* 
And  the  objection  that  there  is  a  want  of  proper  parties 
defendant  is  available  to  the  mortgagor  who  is  liable  for  any 


'  Mims  V.  Mims,  35  Ala.  23  (1859);  *  Kortright  v.  Smith,  3  Edw.  Ch. 

Semple  v.  Lee,  13  Iowa,  304  (1862).  (N.  T.)  40a,  404  (1840). 

See  ante  §  128.  s  HaU  v.  Nelson,  28  Barb.  (N.T.; 

*  See  ante  §  128.  88,  91  (1856) ;  s.  c.  14  How.  (N.  Y.) 

«  Semple   v.  Lee,   13   Iowa,  804  Pr.  32.    See  ante  §8  128,  160. 

(1862). 


§  326.] 


OBJECTIOI^    OF   DEFECT   m   PARTIES. 


385 


deficiency  that  may  arise  on  the  sale  of  the  premises,  even 
though  he  may  have  parted  with  his  interest  in  the  equity  of 
redemption.* 

Where  there  is  a  defect  of  parties  apparent  upon  the  face 
of  the  complaint,  the  objection  may  be  taken  by  demurrer, 
but  where  the  defect  does  not  appear  upon  the  face  of  the 
complaint,  the  objection  must  be  taken  by  answer."  In 
those  cases  where  the  objection  of  a  want  of  parties  is  made 
out  of  season,'  the  want  of  parties  may  be  supplied  by  a 
supplemental  bill.* 

§  326.  Parties  personally  liable  for  debt  may  object  to 
defect  in  parties. — Every  party  personally  liable  for  a  debt  is 
entitled  to  have  all  persons  who  have,  or  claim,  an  interest  in 
the  mortgage,  made  parties  to  the  suit.  In  those  cases 
where  the  ownership  appears  doubtful,  the  court  will  order 
all  parties  appearing  to  be  interested,  to  be  brought  within 
its  jurisdiction.'  And  where  a  complaint  makes  a  mere 
surety  of  the  mortgagor  for  the  payment  of  the  debt,  a 


»  HaU  V.  Nelson,  23  Barb.  (N.  Y.) 
88  (1856) ;  B.  c.  14  How.  (N.  Y.)  Pr. 
32. 

«  N.  Y.  Code  Civ.  Proc.  §  498  ; 
Dawley  v.  Brown.  79  N.  Y.  397 
(1880) ;  Fox  v.  Moyer,  54  K  Y.  125 
(1873) ;  Morris  v.  Wheeler,  45  N.  Y. 
708  (1871) ;  Fulton  Ins.  Co.  v.  Bald- 
win, 37  N.  Y.  648  (1868) ;  Pittman 
V.  Johnson,  15  Abb.  (N.  Y.)  N.  C.  477 
(1885) ;  Dillaye  v.  Parks,  31  Barb. 
(N.  Y.)  132  (1860) ;  Scofield  v.  Van 
Syckle,  23  How.  (N.  Y.)  Pr.  97 
(1862) ;  Browning  v.  Marvin,  22 
Hun  (N.  Y.)  547,  551  (1880);  Hall  v. 
Richardson,  22  Hun  (N.  Y.)  446 
(1880);  Remington  v.  Walker,  21 
Hun  (N.Y.)  326(1880) ;  Holbrook  v. 
Baker,  16  Hun  (N.  Y.)  176  (1878) ; 
Marshall  v.  Lippman,  16  Hun  (N. 
Y.)  Ill  (1879) ;  Barclay  v.  Quick- 
silver Mining  Co.,  6  Lans.  (N.  Y.) 
25  (1872);  Kittle  v.  VanDyck,  1 
Sandf.  Ch.  (N.  Y.)  76  (1843) ;  Zim- 


merman V.  Schoenfeldt,  6  T.  &  C. 
(N.  Y.)  142  (1875) ;  8.  c.  3  Hun  (N. 
Y.)  692 ;  Hees  v.  Nellis,  1  T.  &  C. 
(N.  Y.)  118  (1873)  ;  Biden  v.  James, 
25  Week.  Dig.  (N.  Y.)  141  (1886) ; 
Hamburger  v.  Baker,  21  Week.  Dig. 
(N.  Y.)  213  (1885).     See  ante  %  128. 

*  As  in  Jones  v.  Jones,  3  Atk.  110, 
217  (1744),  where  the  case  had  been 
once  heard,  and  was  brought  on  again 
upon  the  equity  reserved,  when  the 
objection  was  raised.  See  also  Holds- 
worth  v.  Holdsworth,  2  Dick.  799 
(1783),  where  parties  appeared  to  be 
wanting  on  an  appeal  from  the 
decree  at  the  Rolls,  and  the  case  was 
ordered  to  stand  over  with  liberty 
for  the  plaintiffs  to  file  a  supple- 
mental bill,  merely  to  add  parties. 

*  Ensworth  v.  Lambert,  4  Johns. 
Ch.  (N.  Y.)  605  (1820). 

»  See  Kortright  v.  Smith,  3  Edw 
Ch.  (N.  Y.)  402,  404  (1840). 

&5) 


386  OBJECTION    OF   PENDENCY    OF   ACTION.         [§  327. 

party  to  the  bill  to  foreclose,  for  the  purpose  of  obtaining 
a  decree  against  such  surety  or  his  property,  in  the  event  the 
proceeds  of  the  mortgaged  premises  are  found  to  be 
insufficient  to  satisfy  the  debt  and  costs,  such  surety  will 
have  a  rjght  to  insist  that  the  principal  debtor  shall  be 
made  a  party  to  the  suit,  if  he  is  within  the  jurisdiction  of 
the  court ;  but  where  the  principal  debtor  is  an  absentee, 
and  has  assigned  all  his  right  and  interest  in  the  equity  of 
redemption  in  the  mortgaged  premises,  such  facts  will  be 
a  sufficient  reason  for  not  making  him  a  party  to  the  fore- 
closure, even  where  the  surety  is  made  a  party  for  the 
purpose  of  obtaining  a  decree  over  against  him  for  any 
deficiency.'  Where  the  mortgagor  conveys  the  equity  of 
redemption  absolutely,  without  warranty,  the  mortgaged 
premises  thereby  become  the  primary  fund  for  the  payment 
of  the  mortgage  debt,  and  the  grantee  thereof  will  have  no 
right  to  object  that  the  mortgagor  is  not  made  a  party  to  a 
bill  to  foreclose." 

The  real  party  in  interest  must  be  plaintiff  in  an  action 
to  foreclose  a  mortgage.  Where  the  mortgagee  has  parted 
with  his  title  to  the  mortgage  before  suit,  or  disposed  of 
his  interest  therein  after  suit  is  instituted,  the  defendant 
will  have  a  right  to  object  that  the  proper  party  in  interest  is 
not  before  the  court,  and  if  this  objection  is  sustained,  it 
will  be  a  bar  to  the  action.* 

§  327.  Objection  of  pendency  of  action  at  law  on  note 
or  bond. — The  pendency  of  an  action  at  law  for  the  recovery 
of  a  debt  secured  by  a  mortgage,  if  no  judgment  has  been 
recovered  in  such  action,  will  not  prevent  the  filing  of  a 
complaint  to  foreclose  the  mortgage.*      But  the  filing  of 


>  Bigelow  V.  Bush,  6  Paige  Ch.  (1844) ;  Smith  v.  Bartholomew,  42 

(N.  Y.)  343  (1837).  Vt.  356  (1869). 

»  Bigelow  V.  Bush,  6  Paige  Ch.  ■•  Williamson  v.  Champlin,  Clarke 

(N.  Y.)  343  (1837).  Ch.    (N.  Y.)    9    (1839) ;    Suydam 

'  See  MiUs  v.  Hoag,  7  Paige  Ch.  v.  Bartle,  9  Paige  Ch.  (N.  Y.)  294 

(N.  Y.)  18  (1837) ;  8.  c.  31  Am.  Dec.  (1841) ;  Guest  v.  Byington,  14  Iowa, 

271 ;  Field  v.  Maghee,  5  Paige  Ch.  30  (1862) ;  Tappan  v.  Evans,  11  N. 

(N.    Y.)    539    (1836) ;    Wallace   v.  H.  311  (1840). 
Dunning,   Walk.    Ch.    (Mich.)  416 


§  328.J   OBJECTION  OF  JUDGMENT  AT  LAW  ON  NOTE.  387 

such  complaint  for  foreclosure  will  prevent  the  plaintiff  from 
proceeding  in  his  action  at  law,  without  the  permission  of 
the  court.'  The  fact  that  a  suit  at  law  has  been  instituted 
by  another  party  on  the  note,  will  not  be  a  bar  to  the  filing 
of  a  complaint  in  foreclosure  by  the  holder  of  the  mortgage. 
Thus,  where  a  respondent  answered  among  other  things, 
that  an  action  at  law  was  pending  in  the  name  of  the 
original  payee  of  the  notes  mentioned  in  the  mortgage, 
which  the  complainant,  as  the  assignee  thereof  and  the 
holder  of  the  legal  title,  was  seeking  to  foreclose,  a  demurrer 
to  the  answer  was  sustained.  The  court  said  :  "  The  simple 
pendency  of  an  action  in  the  name  of  another  plaintiff  was 
no  bar  to  the  complainant's  recovery.'" 

§  328.  Objection  of  recovery  of  judgment  on  note  or 
bond.— The  recovery  of  a  judgment  on  a  note  secured  by 
mortgage  can  not  be  set  up  as  a  defence  to  an  action  of  fore- 
closure, if  the  judgment  has  not  been  satisfied,'  because 
the  merger  of  a  note  in  a  judgment  does  not  extinguish  the 
debt  ;*  the  land  is  liable,  and  the  lien  of  the  mortgage  will 
continue  until  the  debt  is  paid,  or  the  judgment  is  barred  by 
the  statute  of  limitations.'  And  this  is  true,  whether  the  note 
upon   which  the  judgment  was  obtained,   is  secured  by  a 

'  Suydam  v.  Bartle,  9  Paige  Ch.  Haines,  18Ind.  496(1862);  Jenkinson 

(N.  Y.)  294(1841).  V.    Ewing,    17    Ind.    505    (1861); 

»  Guest  V.  Byington,  14  Iowa,  30,  O'Leary  v.   Snediker,    16  Ind.  404 

32  (1862).  (1861) ;   Hensicker   v.   Lamborn,  13 

3  Vansant  v.   Allmon,    23  111.  30  Ind.  468  (1859);  Applegate  v.  Mason, 

(1859) ;  Severson  v.  Moore,  17  Ind.  13  Ind.  75  (1859) ;    ]Markle  v.  Rapp, 

231  (1861) ;  Jenkinson  v.  Ewing,  17  2  Blackf.  (Ind.)  26'^  (1829) ;  Morrison 

Ind.  505(1861);  Goenenv.Schroeder,  v.   Morrison,   38   Iowa,   73    (1874); 

18  Minn.  66  (1871).  Shearer  v.  Mills,  35  Iowa,  499  (1872); 

*  Priest  V.  Wheelock,  58  111.  114  Jordan    v.    Smith,    30    Iowa,    500 

(1871).  (1870);     Hendershott    v.    Ping,    24 

"  See  Butler  v.  Miller,  1  N.  Y.  490  Iowa,  134  (1867) ;  State  v.  Lake,  17 

(1848),  questioning  s.  c.  1  Den.  (N.  Iowa,  215  (1864) ;'  Wahl  v.  Phillips, 

Y.)  407 ;    Peck's  Appeal,  31  Conn.  12  Iowa,  81  (1861) ;  Jewett  v.  Ham- 

215  (1862) ;    Darst  v.  Bates,  51  111.  lim,  68  Me.  172  (1878) ;  Torrey  v. 

439  (1869) ;  Hewitt  v.  Templeton,  48  Cook,  116  Mass.  163  (1874)  ;  Ely  v. 

111.  367(1868);  Hamilton  v.  Quimby,  Ely,  72  Mass.  (6  Gray),  439  (1856) ; 

46  III.  90  (1867) ;  Wayman  v.  Coch-  Thornton  v.  Pigg,  24  Mo.  249  (1857); 

rane,  35  lU.  152  (1864);  Vansant  v.  Eiley  v.  McCord,  21  Mo.  2S5  (,1855); 

AUmon,  23  111.  30  (1859) ;  Cissna  v.  Lewis  v.  Conover,  21  N.  J.  Eq.  (6 


objectio:n^  of  judgment  at  law  on  note.  [§328. 


mortgage  or  a  trust  deed,'  and  whether  the  judgment  be  for 
the  whole  or  only  a  part  of  the  mortgage  debt.* 

It  has  been  held  in  New  York,  that  a  decree  for  the  fore- 
closure of  a  mortgage  extinguishes  the  lien  of  the  mortgage, 
although  such  decree  is  merely  enrolled  and  not  docketed  ;* 
but  the  prevailing  doctrine  is  that  the  mortgage  lien  is  not 
impaired  either  by  a  decree  in  foreclosure/  a  judgment  on 
scire  facias*  or  the  taking  of  a  recognizance  in  the  place  of 
the  sum  due  on  the  mortgage  note,"  for  even  after  the  taking 
of  such  recognizance  the  mortgagee  may  foreclose  his  mort- 
gage/ Where  a  judgment  has  been  taken  on  a  note,  its  only 
effect  is  to  establish  the  validity  of  the  note,  and  that  of  the 
mortgage  securing  it.*  But  satisfaction  of  the  judgment 
may  be  set  up  as  a  defence  ;*  the  fact  that  the  premises  have 
been  taken  on  execution,'*  and  sold  in  satisfaction  of  the 
judgment,  will  also  be  a  good  defence." 

The  effect  of  the  commencement  of  a  foreclosure  is  to 
work  the  discontinuance  of  every  other  action  or  proceeding 
on  the  note,  except  by  leave  of  the  court  in  which  the  fore- 
closure is  pending.''     Under  the  former  New  York  practice, 


C.  E.  Gr.)  230  (18 TO);  Flanagan  v. 
Westxjott,  11  N.  J.  Eq.  (3  Stockt.) 
264  (1856). 

'  Hamilton  v.  Quimby,  46  HI.  90 
(1867). 

"^  Applegate  v.  Mason,  18  Ind.  75 
(18.59). 

3  People  V.  Beebe,  1  Barb.  (N.  Y.) 
879  (1847).  See  Gage  v.  Brewster, 
31  N.  Y.  218  (1865). 

'' Peck's  Appeal,  81  Conn.  215 
(1862) ;  Priest  v.  Wheelock,  58  111. 
114  (1871);  Evansville  Gas  Light 
Co.  V.  State,  73  Ind.  219  (1881); 
s.  c.  38  Am.  Rep.  129;  Teal  v. 
Hinchman,  69  Ind.  379  (1879); 
Lapping  v.  Duffy,  47  Ind.  51  (1874); 
Stahl  V.  Roost,  34  Iowa,  475  (1872) ; 
Hendershott  v.  Ping,  24  Iowa.  134 
(1867) ;  Riley  v.  McCord,  21  Mo.  285 
(1855) ;  Helrabold  v.  Man,  4  Whart. 
(Pa.)  410  (1839). 

»  Rockwell  V.  Servant.  63  111.  424 


(1872) ;  Helmbold  v.  Man,  4  Whart. 
(Pa.)  410  (1839). 

*  Davis  V.  Maynard,  9  Mass.  242 
(1812). 

'  Thornton  v.  Pigg,  24  Mo.  249 
(1857). 

8 'Morris  t.  Floyd,  5  Barb.  (N.  Y.) 
130  (1849);  Hosford  v.  Nichols,  1 
Paige  Ch.  (N.  Y.)  220  (1828);  Clarke 
V.  Bancroft,  13  Iowa,  320  (1862). 

*  Farmers'  Loan  and  Trust  Co.  v. 
Reid,  3  Edw.  Ch.  (N.  Y.)  414  (1840). 

'"  Applegate  v.  Mason,  13  Ind.  75 
(1859). 

"  People  V.  Beebe,  1  Barb,  (N.  Y.) 
379,  388  (1847). 

"  Williamson  v,  Champlin,  Clarke 
Ch.  (X.  Y.)  9  (1839);  s.  c.  aff'd 
8  Paige  Ch.  (N.  Y.)  70 ;  Suydam 
v.  Bartle,  9  Paige  Ch.  (N.  Y.)  294 
(1841).  See  N.  Y.  Code  Civ.  Proc. 
§§  1628-1630. 


§  329.]   OBJECTION  OF  JUDGMENT  AT  LAW  ON  NOTE.  3S9 

however,  where  an  action  at  law  was  brought  for  the  collec- 
tion of  a  debt  secured  b}'  mortgage,  whether  against  a 
party  to  the  action  for  foreclosure  or  against  a  third  party, 
all  proceedings  in  the  foreclosure  suit  were  stayed  until  the 
remedy  in  the  action  at  law  had  been  exhausted.* 

§  329.  Objection  under  the  codes.  —  Under  the  New 
York  Code,  and  under  all  codes  modeled  after  it,  the  pen- 
dency of  proceedings  on  a  note  or  bond  for  the  recovery  of 
a  mortgage  debt,  will  constitute  no  objection  and  can  not  be 
set  up  as  a  defence  to  the  prosecution  of  a  foreclosure,  pro- 
viding a  judgment  has  not  been  obtained  ;  but  if  a  judgment 
on  the  note  has  been  obtained,  the  remedy  upon  such  judg- 
ment must  be  first  exhausted  by  execution,'  An  action  on 
the  note  will  be  suspended  by  the  proceedings  to  foreclose," 
andean  not  be  proceeded  with  further,  without  leave  first 
obtained  from  the  court  in  which  the  foreclosure  proceedings 
are  pending.* 

If  it  appears  from  the  complaint  to  foreclose  a  mortgage, 
that  the  plaintiff  has  recovered  a  judgment  for  the  mortgage 
debt,  or  that  the  mortgage  was  given  as  a  collateral  security 
for  a  demand  which  was  already  in  judgment,  it  must  also 
appear  that  an  execution  has  been  issued  upon  the  judgment 
and  returned  unsatisfied,  or  it  will  be  defective  ;  the  objec- 
tion that  such  fact  does  not  appear  may  be  taken  by  answer 
or  demurrer ;  or  the  defendant,  without  answering,  may 
oppose  the  application  for  judgment.'  If  the  defect  does 
not  appear  upon  the  face  of  the  complaint,  it  may  be  set  up 
by  answer.* 

»  Pattison  v.  Powers,  4  Paige  Ch.  Champlin,   Clarke  Ch.    (N.   Y.)    9 

(N.  Y.)  549  (1834).  (1839) ;  8.  c.  aff'd  8  Paige  Ch.    (N. 

2  Shufelt  V.  Shufelt,  9  Paige  Ch.  Y.)  70  ;   N.   Y.    Code    Civ.   Proc. 

(N.  Y.)  137  (1841) ;  s.  c.  37  Am.  Dec.  §  1628. 

381  ;  North  River  Bank  v.  Rogers,  *  Grosvenor  v.   Day,    Clarke  Ch. 

8  Paige  Ch.  (N.  Y.)  648  (1841) ;  N.  (N.Y.)  109(1839);  Shufelt  v.  Shufelt, 

Y.  Code  Civ.  Proc.  §§  1628,  1629,  9  Paige  Ch.  (N.  Y.)  137  (1841) ;  s.  c. 

1630.  37  Am.  Dec.   381  ;  N.  Y.  Code  Civ. 

*  Williamson  v.  Champlin,  Clarke  §§  488,  1630. 

Ch.  (N.  Y.)  9  (1839)  ;  s.  c.  aff'd  8  «  North  River  Bank  v.  Rogers.  S 

Paige  Ch.  (N.  Y.)  70.  Paige  Ch.  (N.  Y.)  648  (1841) ;  N.  Y. 

♦  Suydam  v.  Bartle,  9  Paige  Ch.  Code  Civ.  Proc.  g  498. 
(N.   Y.)  294  (1841) ;  Williamson  v. 


390 


DENYING   EXECUTION.  [§§  330-331. 


§  330.  Denial  of  execution  of  mortgage.— In  his  answer 
to  a  bill  filed  to  foreclose  a  mortgage,  the  defendant  may 
deny  the  execution  and  delivery  of  the  mortgage.  But  the 
answer  of  a  mortgagor,  denying  the  execution  and  delivery 
of  the  mortgage,  will  not  be  sufificient  to  overcome  the  pre- 
sumption of  delivery,  arising  from  the  mortgagee's  possession 
of  the  mortgage  duly  executed,  acknowledged  and  recorded.' 
Where  a  mortgage  has  not  been  acknowledged,  that  fact 
must  be  set  up  affirmatively  as  a  defence,  if  the  party 
wishes  to  avail  himself  of  the  defect.*  In  an  action  to 
enforce  a  written  instrument,  in  the  form  of  a  real  estate 
mortgage  purporting  to  have  been  executed  and  acknowl- 
edged as  required  by  statute,  an  answer  alleging  that  the 
defendant  never  acknowledged  the  execution  of  such  instru- 
ment, will  plead  a  good  defence.* 

§  331,  Allegation  of  infancy. — A  mortgage  executed  by 
an  infant  is  not  void,*  but  merely  voidable  at  his  election.* 
If  the  infant  has  committed  some  act,  within  a  reasonable  time 


»  Long  V.  Kinkel,  36  N.  J.  Eq.  (9 
Stew.)  359  (1883)  ;  Commercial  Bank 
of  N.  J.  V.  Reckless,  5  N.  J.  Eq.  (1 
Halst.)  650  (1847). 

*  Sturgeon  v.  Board  of  Commis- 
sioners, 65  Ind.  302  (1879). 

*  Williamson  v.  Carskadden,  36 
Ohio  St.  664  (1881).  In  this  case  the 
court  say  :  "If  it  is  true,  as  alleged 
by  the  defendants  joining  in  the 
answer,  that  they  never  appeared 
before  the  officer  or  acknowledged 
the  execution  of  such  mortgage,  the 
certificate  of  acknowledgment  is, 
as  to  them,  fraudulent ;  and  in  avail- 
ing themselves  of  that  defence,  it  is 
not  necessary  to  show  tliat  the  mort- 
gagee had  notice  of  such  fraud.  In 
fact  the  governing  principle  is  very 
broad.  Thus  it  has  been  held  that 
in  an  action  on  the  recognizance, 
which  is  regarded  as  a  record,  a  plea 
in  bar  that  the  defendant  did  not 
acknowledge  the  recognizance  is 
sufficient."    State  v.  Daily,  14  Ohio, 


91  (1846) ;  and  see  Callen  v.  Ellison, 
13  Ohio  St.  446,  454  (1862). 

♦  Chapin  v.  Shafer,  49  N.  Y.  407 
(1872).  See  Randall  v.  Sweet,  1  Den. 
(N.  Y.)  460(1845) ;  Flynn  v.  Powers, 
86  How.  (N.  Y.)  Pr.  289  (1868); 
Green  v.  Wilding,  59  Iowa,  679 
(1882);  s.  c.  44  Am.  Rep.  696; 
Roberts  v,  Wiggin,  1  N.  H.  73 
(1817)  ;  s.  c.  8  Am.  Dec.  38  ;  Harner 
V.  Dipple,  31  Ohio  St.  72  (1876)  ;  s. 
c.  27  Am.  Rep.  496  ;  Callis  v.  Day, 
38  Wis.  643  (1875).  As  to  the  ratifi- 
cation of  contracts  by  infants,  see 
Tobey  v.  Wood,  123  Mass.  88  (1877); 
s.  c.  25  Am.  Rep.  27,  and  notes  30  to 
32. 

*  Walsh  V.  Powers,  43  N.  Y.  23, 
26  (1870)  ;  s.  c.  3  Am.  Rep.  654  ; 
Henry  v.  Root,  33  N.  Y.  526  (1865). 
See  Loomer  v.  Wheelwright,  3 
Sandf.  Ch.  (N.  Y.)  135  (1845) ;  Flynn 
V.  Powers,  35  How.  (N.  Y.)  Pr.  279 
(1868) ;  aff'd  36  How.  (N.  Y.)  Pr. 
2«9. 


§  331.] 


allegij^g  defeisxe  of  ii^fancy. 


391 


after  attaining  his  majority,  clearly  showing  his  intention 
not  to  be  bound  by  the  mortgage,  it  will  be  held  void/  and 
the  plea  of  infancy  will  constitute  a  good  defence  to  the  fore- 
closure of  the  mortgage.'  But  where  an  infant  allows  a 
mortgage  to  be  foreclosed  against  him  after  attaining  his 
majority,  without  pleading  his  infancy  at  the  time  of  the 
execution  of  the  mortgage,  he  will  thereby  waive  his  right  to 
that  defence,  and  will  not  be  permitted  to  interpose  it  against 
a  supplemental  bill  to  enforce  the  decree.'  The  option  which 
an  infant  has  of  disaffirming  his  contracts  should  be  promptly 
exercised  upon  his  attaining  his  majority  *  but  the  burden  of 
proving  that  a  contract  entered  into  by  an  infant,  has  been 
ratified  by  him  since  attaining  his  majority,  rests  upon  the 
party  seeking  to  enforce  it. 

What  acts  amount  to  the  confirmation  of  a  contract  is 
always  a  question  of  law  for  the  court. ^  It  has  been  said, 
where  an  infant  purchases  land  and  subsequently,  but  before 


'  State  V.  Plaisted.  43  N.  H.  413 
(1861);  Campbell  v.  Cooper,  34 N.  H. 
49,  67  (1856).  See  Carr  v.  Clough, 
26  N.  H.  (6  Fost.)  280,  293  (1853)  ; 
s.  c.  59  Am.  Dec.  345  ;  Lufkin  v. 
Mayall,  25  N.  H.  (5  Fost.)  82  (1852); 
State  V.  Howard,  88  N.  C.  650  (1883). 

«  Willis  V.  Twambly,  13  Mass.  204 
(1816).  See  Ljnde  v.  Budd,  2  Paige 
Ch.  (N.  Y.)  191  (1830) ;  s.  c.  21  Am. 
Dec.  84  ;  Flj'iin  v.  Powers,  35  How. 
(X.  Y.)  Pr.  279  (1868)  ;  s.  c.  aff'd  36 
How.  (N.  Y.)  Pr.  289  ;  Roberts  v. 
Wiggin,  1  N.  H.  74  (1817)  ;  s.  c.  8 
Am.  Dec.  38. 

3  Terry  v.  McClintock,  41  Mich. 
492  (1879). 

■*  Flynn  v.  Powers,  36  How.  (N. 
Y.)  Pr.  289  (1868),  aff'g  35  How.  (N. 
Y.)  Pr.  279.  See  Walsh  v.  Powers, 
43  N.  Y.  23,  26  (1870)  ;  s.  c.  3  Am. 
Rep.  654  ;  Loomer  v. Wheelwright 
Sandf.  Ch.  (N.  Y.)  135  (1845); 
Kline  v.  Beebe.  6  Conn.  494  (1827)  ; 
Baker  v.  Kennett,  54  Mo.  91  (1873)  ; 
Richardson  v.   Boright,    9  Vt.   371 


(1837)  ;  Cecil  v.   Salisbury,  2  Vern. 
224  (1691). 

'  See  Beardsley  v.  Hotchkiss,  96 
N.  Y.  211  (1884);  Green  v.  Green,  69 
N.  Y.  553  (1877) ;  Walsh  v.  Powers, 
43  N.  Y.  23,  26  (1870) ;  s.  c.  3  Am. 
Rep.  654  ;  Henry  v.  Root,  33  N.  Y. 
526  (1865)  ;  Roof  v.  Stafford,  7  Cow. 
(N.  Y.)  179,  183  (1827);  Lynde  v. 
Budd,  2  Paige  Ch.  (N.  Y.)  191 
(1830) ;  s.  c.  21  Am.  Dec.  84  ;  Bool 
V.  Mix,  17  Wend.  (N.  Y.)  120(1837); 
Hastings  v.  DoUarhide,  24  Cal.  195 
(1864) ;  Benham  v.  Bishop,  9  Conn. 
330  (1832) ;  s.  c.  23  Am.  Dec.  358  ; 
Rogers  v.  Hurd,  4  Day  (Conn.)  57 
(1809) ;  8.  c.  4  Am.  Dec.  182  ;  Harris 
V.  Cannon,  6  Ga.  382  (1849) ;  Illinois 
L.  &  L.  Co.  V.  Bonner,  75  111.  315 
(1874)  ;  Scranton  v.  Stewart,  52  Ind. 
69  (1875) ;  Philips  v.  Green,  3  A. 
Iv.  Marsh.  (Ky.)  7  (1820)  ;  s.  c. 
13  Am.  Dec.  124  ;  Lawson  v.  Love- 
joy.  8  Me.  (8  Greenl.)  405  (1832)  ;  s. 
c.  23  Am.  Dec.  526  ;  Dana  v. 
Coombs,  6  Me.  (6  Greenl.)  89  (1839); 


ALLEGING  DEFENCE  OF  INFANCY. 


[§331. 


his  majority,  sells  it,  that  his  retention  of  the  proceeds 
of  such  sale  after  he  becomes  of  age  is  not  such  an  affirm- 
ance of  the  contract  as  will  bind  him  personally  upon  an 
obligation  given  as  a  consideration  for  the  land.*  And  where 
an  infant  bought  land  subject  to  a  mortgage  thereon,  cove- 
nanting in  the  deed  to  pay  such  mortgage  as  a  part  of  the 
consideration  of  the  conveyance,  and  subsequently,  but 
before  coming  of  age,  conveyed  the  land  for  a  larger  price 
and  retained  and  enjoyed  the  proceeds  of  such  sale  for  several 
years  after  attaining  his  majority,  the  court  held  that  there 
was  no  personal  liability  on  the  covenant  of  assumption,* 
and  that  an  appearance  by  an  attorney  for  the  infant  in  an 
action  to  foreclose  such  mortgage  and  to  obtain  a  personal 
judgment  against  him,  would  not  be  a  bar  to  the  plea  of  infancy 
as  a  defence  in  an  action  against  such  infant  by  his  grantor 
to  recover  the  amount  of  the  judgment  for  deficiency,  which 
he  had  been  obliged  to  pay.' 

Where  aainfant  has  purchased  real  property  and  continued 
in  possession  thereof  and  exercised  acts  of  ownership,  after 


s.  c.  19  Am,  Dec.  194  ;  Hubbard  v. 
Cummings,  1  Me.  (1  Greenl.)  11 
(1820)  ;  Thompson  v.  Lay.  21  JMass. 
(4  Pick.)  48  (1826)  ;  8.  c.  16  Am. 
Dec.  325 ;  Whitney  v.  Dutch,  14 
Mass.  457  (1817)  ;  s.  c.  7  Am.  Dec. 
229  ;  Martin  v.  Mayo,  10  Mass.  137 
(1813) ;  s.  c.  6  Am.  Dec.  103  ;  Smith 
V.  Mayo,  9  Mass.  62  (1812) ;  s.  c.  6 
Am.  Dec.  28  ;  Dixon  v.  Merritt,  21 
Minn.  196  (1875) ;  Allen  v.  Poole,  54 
Miss.  323  (1877) ;  Norcum  v.  Shea- 
hau,  21  Mo.  25  (1855);  Roberts  v.  Wig- 
gin,  1  N.  H.  73  (1817) ;  s.  c.  8  Am. 
Dec.  38  ;  Cresinger,  v.  Welch,  15 
Ohio,  156(1846);  Drake  v.  Ramsay,  5 
Ohio,  251  (1831) ;  Cheshire  v.  Bar- 
rett, 4  McC.  (S.  C.)  241  (1827)  ;  s.  c. 
17  Am.  Dec.  735  ;  Scott  v.  Buchacau, 
11  Hump.  (Tenn.)469  (1850)  ;  Bige- 
low  V.  Kinney,  3  Vt.  353  (1830)  ;  s, 
0.  21  Am.  Dec.  589  ;  Mustard  v. 
Wohlford,  15Gratt.  (Va.)  329  (1859); 
Irvine  v.  Irvine,  76  U.  S.  (9  Wall.) 


617(1869);  bk.  19  L.  ed.  800  ;  Tucker 
V.  Moreland,  35  U.  S.  (10  Pet.)  58 
(1830) ;  bk.  9  L.  ed.  346.  To  con- 
stitute a  ratification,  there  must  be 
something  more  than  a  mere  acknowl- 
edgment ;  Benham  v.  Bishop,  9 
Conn.  330(1832) ;  Thompson  v.  Lay, 
21  Mass.  (4  Pick.)  48  (1826) ;  s.  c.  16 
Am.  Dec.  325.  Anything  from 
which  assent  may  fairly  be  deduced 
may  be  regarded  as  an  affirmance  ; 
Cheshire  v.  Barrett,  4  ]\IcC.  (S.  C.) 
L.  241  (1827);  s.  c.  17  Am.  Dec.  735; 
Wheaton  v.  East,  5.  Yerg.  (Tenn.) 
41  (1833) ;  s.  c.  26  Am.  Dec.  251. 
>  Walsh  V.  Powers,  43  N.  T. 
(1870) ;  s.  c.  3  Am.  Rep.  654. 

2  Walsh  V.  Powers,  43  N.  Y, 
(1870)  ;  s.  c.  3  Am.  Rep.  654. 

3  Walsh  V.  Powers,  43  N.  Y.  23 
(1870)  ;  s.  c.  3  Am.  Rep.  654,  revers- 
ing Flynn  v.  Powers,  35  How.  (N. 
Y.)  Pr.  279  (1868),  on  this  point; 
s.  c.  36  How.  (N.  Y.)  Pr.  289. 


23 


23 


§  331.] 


ALLEGING  DEFENCE  OF  INFANOT. 


393 


becoming  of  full  age,  the  retention  of  the  property  and  the 
failure  to  disaffirm  the  contract,  within  a  reasonable  time 
after  attaining  his  majority,  will  operate  as  a  ratification  of 
the  contract  and  bar  the  defence  of  Infancy.'  It  is  a  well 
established  principle,  that  an  infant  will  not  be  permitted  to 
retain  property  purchased  by  him,  and  at  the  same  time 
to  repudiate  the  contract  of  purchase  ;'  he  must  either  con- 
firm or  abandon  the  contract  as  a  whole.* 

A  continuance  in  the  possession  of  the  property  purchased 
by  an  infant,  after  he  attains  his  majority,  is  in  all  instances 
regarded  as  an  affirmance  of  the  transaction  by  which  title 
CO  the  property  was  acquired,  and  entitles  the  vendor  to 
a  recovery  in  an  action  therefor.* 


»  Beardsley  v.  Hotchkiss,  96  N. 
IT.  211  (1884).  See  Walsli  v.  Powers, 
43  N.  Y.  23,  26  (1870) ;  3  Am.  Rep. 
•64 ;  Heury  v.  Root,  33  N.  Y.  526 
(i865) ;  Lynde  v.  Budd,  2  Paige  Ch. 
(K  Y.)  191  (1830) ;  s.  c.  21  Am.  Dec. 
84 ;  Kline  v.  Beebee,  6  Conn.  494 
(18il7);  Hubbard  v.  Cummings,  1 
Me.  (1  Greenl.)  11  (1820)  ;  Cecil  v. 
Salisbury,  2  Vern.  225  (1691) ;  Ket- 
ley's  Case,  1  Brownl.  120  (1675). 

« Henry  v.  Root,  33  N.  Y.  526 
(1865) ;  Flynn  v.  Powers,  54  Barb. 
(N.  Y.)  554  (1868) ;  s.  c.  35  How. 
(N.  Y.)  Pr.  279  :  Gray  v.  Lessington, 
2  Bosw.  (N.  Y.)  263  (1857) ;  Kitchen 
V.  Lee,  11  Paige,  Ch.  (N.  Y.)  107 
(1844) ;  Lynde  v.  Budd,  2  Paige  Ch. 
(N.Y.)  191  (1830) ;  Deason  v.  Boyd, 
1  Dana  (Ky.)  45  (1833) ;  Cheshire  v. 
Barrett,  4  McC.  (S.C.)  241  (1827) ;  8. 
c.  17  Am.  Dec.  735. 

3  Overbach  v.  Heermance,  Hopk. 
Ch.  (N.  Y.)  837  (1824) ;  s.  c.  14  Am. 
Dec.  546.  See  Walsh  v.  Powers,  48 
N.  Y.  23,  26  (1870) ;  s.  c.  3  Am. 
Rep.  654  ;  Henry  v.  Root,  33  N.  Y. 
526,  553  (1865) ;  Flynn  v.  Powers, 
54  Barb.  (N.  Y.)  554  (18CS) ;  s.  c.  35 
How.  (N.  Y.)Pr.  279  ;  Bartholomew 
V.  Finnemore,  17  Barb.  (N.  Y.)  428 


(1854) ;  Coutant  v.  Servoss,  3  Barb. 
(N.  Y.)  128  (1848) ;  Gray  v.  Lessing- 
ton, 2  Bosw.  ( N.  Y. )  263  (1857) ; 
Kitchen  v.  Lee,  11  Paige  Ch,  (N.Y.) 
107  (1844) ;  B.  c.  43  Am.  Dec.  101 ; 
Lynde  v.  Budd,  2  Paige  Ch.  (N.  Y.) 
191  (1830) ;  8.  0.  21  Am.  Dec.  84 ; 
Kline  v.  Beebe,  6  Conn.  494  (1827) ; 
Carpenter  v.  Carpenter,  45  Ind.  146 
(1873) ;  Deason  v.  Boyd,  1  Dana 
(Ky.)  45  (1833)  ;  Hubbard  v.  Cum- 
mings, 1  Me.  (1  Greenl.)  11,  13 
(1820) ;  Badger  v.  Pliinney,  15  Mass. 
359  (1819) ;  8.  c.  8  Am.  Dec.  105  ; 
Young  V,  McKee,  13  Mich.  552 
(1865)  ;  Ladd  v.  Wiggin,  35  N.  H. 
428  (1857) ;  Cheshire  v.  Barrett,  4 
McC.  (S.  C.)  L.  241  (1827) ;  8.  c.  17 
Am.  Dec.  735  ;  Morrill  v.  Aden,  19 
Vt.  505  (1847) ;  Farr  v.  Sumner,  18 
Vt.  28  (1840) ;  s.  c.  36  Am.  Dec.  327  ; 
Irish  V.  Clayes,  10  Vt.  85  (1838) ; 
Bigelow  V.  Kinney,  3  Vt.  353(1830); 
8.  c.  21  Am.  Dec.  589. 

*  Henry  v.  Root,  33  N.  Y.  526 
(1865).  See  Walsh  v.  Powers,  43  N. 
Y.  23  (1870);  Coutant  v.  Servoss,  3 
Barb.  (N.  Y.)  128  (1848);  Kitchen  v. 
Lee.  11  Paige  Ch.  (N.  Y. )  107 
(1844);  8.  c.  43  Am.  Dec.  101; 
Lynde  v.  Budd,  2  Paige  Ch.  (N.  Y.) 


394         lntai^t's  puechase  mokey  mortgage.     [§332. 

§  332.  Foreclosure  of  infant's  purchase  money  mort- 
gage.— Where  an  infant  executes  a  mortgage  to  secure  the 
purchase  money,  or  a  portion  thereof,  for  premises  purchased 
by  him,  and  ratifies  the  same  on  attaining  his  majority,  the 
mortgage  will  become  vahd  and  binding.*  A  retention  of 
possession  and  the  continued  use  of«the  property,  or  a  sale 
of  the  whole  or  of  a  part  of  the  premises  after  attaining  his 
majority,  is  to  be  regarded  as  an  affirmance  of  the  contract 
of  purchase,  and  will  bind  the  infant  for  the  payment  of  the 
agreed  consideration."  Where  infancy  is  set  up  as  a  defence 
on  coming  of  age,  the  infant  can  relinquish  the  land  to  his 
grantor  and  demand  the  return  of  the  purchase  money  which 
was  paid  at  the  time  the  contract  was  entered  into,'  but  he  can 
not  affirm  the  contract  in  part  and  avoid  it  in  part.  The 
mortgage  can  not  be  avoided  without  making  the  deed  void 
also.*  He  can  not  retain  possession  of  the  property,  thereby 
affirming  the  purchase,  and  plead  his  infancy  at  the  time  of 
making  the  contract,  to  avoid  the  payment  of  the  purchase 
money.' 

If  an  infant  wishes  to  avoid  the  payment  of  his  purchase 
money  mortgage,  he  must  surrender  and  reconvey  the 
property;    for,   as  we  have   seen,  an  infant  can  not  retain 


191   (1830) ;  s.  c.  21  Am.  Dec.  84 ;  Hubbard  v.    Cummings,   1   Me.   (1 

Boyden  V.  Boyden,  50  Mass.  (9  Mete).  Greenl.)  11  (1820);  Boyden  v.  Boy- 

519  (1845);  Badger  v.  Phinney,  15  den,  50  Mass.  (9  Mete.)  519  (1845); 

Mass.  359  (1819) ;  s.  c.  26  Am.  Dec.  Bobbins    v.    Eaton,    10  N.  H.   563 

611  ;  Boody  v.  McKenny,  23  Me.  517  (1840) ;  Callis  v.   Day,  38  Wis.  643 

(1844);    Hubbard  v.    Cummings,    1  (1875). 

Me.  (1  Greenl.)  11  (1820) ;  Roberts  v.  »  See  Lynde  v.  Budd,  2  Paige  Ch. 

Wiggin,  1  N.  H.  73  (1817)  ;  s.  c.  8  (N.  Y.)  191  (1830);  s.  c.  21  Am.  Dec. 

Am.  Dee.  38.  84 ;  Willis  v.   Twambly,   13  Mass. 

'  Eagle  Fire  Ins.   Co.   v.  Lent,   1  204  (1816). 

Edw.  Ch.  (X.  Y.)  304  (1832)  ;  Lynde  "  Wood  v.  Gosling,  1  N.  Y.  Leg. 

V.  Budd,  2  Paige  Ch.  (N.  Y.)  191  Obs.  74  (1841) ;  Coutant  v.  Servoss, 

(1830) ;  s.  c.  21  Am.  Dee.  84.  3  Barb.  (N.  Y.)  128  (1848) ;  Roberts 

«  See  Lynde  v.  Budd,  2  Paige  Ch.  v.  Wiggin,  1  N.  H.  73  (1817) ;  s.  c.  8 

(N.  Y.)  191  (1830) ;  s.  c.21  Am.  Dec.  Am.  Dec.  38. 

84 ;  Flynn  v.  Powers,  54  Barb.  (N.  *  See  Henry  v.  Root,  33  N.  Y.  526 

Y.)  554  (1868) ;  s.  0.   35  How.  (N.  (1865) ;    Kitchen  v.   Lee,    11   Paige 

Y.)    Pr.    282  ;    Boody    v.    McKen-  Ch.  (N.  Y.)  109  (1844)  ;  s.  c.  42  Am. 

ney,    23  Me.    517  (1844) ;    Dana  v.  Dec.  102  ;  Kline  v.  Beebe,  6  Conn. 

Coombs,  6  Me.  (6  Greenl.)  89  (1829);  494    (1827) ;    Deason    v.    Boyd,    1 


§  333.]    infant's  purchase  moxey  mortgage.  305 

the  property  and  at  the  same  time  avoid  his  obligation  on  the 
mortgage.'  The  deed  and  the  purchase  money  mortgage, 
being  presumptively  executed  at  the  same  time  and  forming 
parts  of  the  same  contract,  are  to  be  considered  together 
and  regarded  as  forming  but  one  instrument.'  They  must 
stand  or  fall  together,  and  for  that  reason  the  defence  of 
infancy  can  not  be  pleaded  to  the  foreclosure  of  such  a 
mortgage,  where  the  infant  still  retains  possession  of  the 
property.* 

§  333'    Allegation    of   insanity    of   mortg-agor.  —  The 

insanity  of  the  mortgagor,  at  the  time  of  the  execution  of 
a  bond  and  mortgage,  may  be  set  up  as  a  defence  in  an  action 
for  the  foreclosure  of  the  mortgage,  the  same  as  in  an 
action  on  any  other  kind  of  a  contract.  But  where  a  mort- 
gage is  executed  under  the  direction  and  by  the  authority 
of  a  court,  the  sanity  or  insanity  of  the  mortgagor  is  not 
material  ;*  and  in  an  equitable  proceeding  it  will  be  imma- 
terial whether  a  mortgagee  was  sane  or  not  at  the  date  of  the 
execution  of  a  mortgage  to  him,  where  it  was  executed  in 
strict  pursuance  of  a  written  agreement  entered  into  by  such 
mortgagee  when  sane.'  It  would  seem,  where  a  mortgage  is 
given  to  secure  the  repayment  of  money  previously  loaned, 
that   the   insanity   of   the    mortgagor  at  the  time    of   the 


Dana  (Ky.)  46  (1833) ;    Cheshire  v.  *  Rawson  v.  Lampman,  5  N.  Y. 

Barrett,  4  McC.  (S.  C.)  241   (1827);  461  (1851) ;  Lynde  v.  Budd,  2  Paige 

B.  c.  17  Am.  Dec.  735;  Bigelow  v.  Ch.  (N.  Y.)  191  (1830);  s.  c.  21  Am. 

Kinney,  3  Vt.  353  (1830).  Dec.  84. 

1  Henry  v.  Root,  33  N.  Y.  526,  »  Coutant  v.  Servoss,  3  Barb.  (N. 
553  (1865).  See  Chapin  v.  Shafer,  49  Y.)  128  (1848) ;  Lynde  v.  Budd,  2 
N.  Y.  407(1872) ;  Kitchen  v.  Lee,  11  Paige  Ch.  191  (1830) ;  s.  c.  21  Am. 
Paige  Ch.  (N.  Y.)  107  (1844) ;  s.  c.  Dec.  84 ;  Stow  v.  Tifft,  15  Johns. 
42  Am.  Dec.  101 ;  Lynde  v.  Budd,  (N.  Y.)  458  (1818) ;  s.  c.  8  Am. 
3  Paige  Ch.  (N.  Y.)  191  (1830) ;  s.  c.  Dec.  266  ;  VanHorne  v.  Crain,  1 
21  Am.  Dec.  84  ;  Kline  v.  Beebe,  6  Paige  Ch.  (N.  Y.)  455  (1829);  Hub- 
Conn.  494  (1827) ;  Deason  v.  Boyd,  bard  v.  Cummings,  1  Me.  (1  Greenl.) 
1  Dana  (Ky.)  45  (1833);  Dana  v.  11(1820);  Roberts  v.  Wiggiu,  1  N. 
Coombs,  6  Me.  (6  Greenl.)  89  (1829);  H.  73  (1817) ;  s.  c.  8  Am.  Dec.  38. 
8.  c.  19  Am.  Dec.  194 ;  Badger  v.  *  Grier's  Appeal,  101  Pa.  St.  413 
Phlnney,  15  Mass.  359  (1819) ;  a.  c.  (1882). 

8  Am.  Dec.  105  ;  Heath  v.  West,  28  *  Bevin    v.    Powell,    83    Mo.    385 

N.  H.  (8  Post.)  101  (1853).  (1884). 


396  ALLEGING    INSANITY    OF   MORTGAGOR.         [§333. 

execution  of  the  mortgage  will  not  be  material.*  It  is  an 
unsettled  question  what  degree  of  unsoundness  of  mind 
must  be  shown  to  enable  a  defendant  to  avoid  his  contracts ; 
but  the  rules  which  apply  to  contracts  generally  will  govern 
mortgages  also. 

Where  the  insanity  is  such  as  to  apprise  all  persons 
dealing  with  the  party  of  his  mental  condition,  there  is  no 
question  regarding  the  non-liability  of  the  mortgagor  upon 
any  contract  entered  into  by  him  ;'  but  where  his  mental 
disorder  is  of  such  a  character  as  not  to  apprise  a  man  of 
ordinary  discernment  of  his  mental  condition,  there  is  more 
difficulty  and  uncertainty.  A  contract,  though  fair,  entered 
into  by  a  man  under  such  circumstances,  will  sometimes  be 
held  void.  Thus,  where  a  man,  who  had  been  insane  for 
some  time,  but  who  had  only  periodical  recurrences  of 
insanity,  was  insane  at  the  time  of  the  execution  of  a  mort- 
gage, the  mortgage  was  set  aside  as  being  made  while  the 
mortgagor  was  non  compos  mentis,  although  he  managed  his 
own  affairs  with  average  correctness  and  was  treated  by 
his  neighbors  as  competent  to  do  business,  even  while  they 
considered  him  of  unsound  mind,  and  although  he  was  not  so 
manifestly  insane  as  to  make  the  conduct  of  the  mortgagee 
fraudulent  in  accepting  the  mortgage  security.* 

Where  the  sanity  of  the  mortgagor  is  in  question,  the  bur- 
den of  proof   is  upon   the  party  who  seeks  to  avoid  the 


^  See  Copenrath  v,  Kienby,  83  Ind.  believed  him    to  be  sober,   in    his 

18  (1882).     In  this  case  the  answer  right  mind,  and  capable  of  entering 

set  up  the  mortgagor's  unsoundness  into  a  contract,   and   also  that  the 

of  mind  and  incapacity  to  contract  transaction  between  them  was  bona 

at  the  time  he  executed  the  mort-  fide.     On  demurrer  to  such  reply, 

gage,  in  bar  of  the  action  to  fore-  for  want  of  facts,  the  court  held  it 

close.     The    mortgagee    replied    to  to  be  good. 

such  answer  by  showing  that  the  *  There  are  exceptions  to  the  gen- 
mortgage  was  given  to  secure  the  re-  eral  rule  of  the  non-liability  of  a 
payment  of  money  borrowed  by  the  person  unmistakably  insane  upon 
mortgagor  to  enable  him  to  pay  his  his  contracts,  such  as  contracts  which 
lonafide  debt  to  a  third  person,  and  are  fair  and  beneficial  to  him  or  his 
that,  when  the  mortgage  was  exe-  estate.  But  it  is  not  the  province  of 
cuted,  the  mortgagee  had  no  knowl-  this  work  to  consider  these  distinc- 
edge  whatever  of  any  disability  of  tions,  which  are  fully  treated  in  all 
the    mortgagor    to    contract,     but  standard  works  on  contracts. 


§  334.]         ALLEGING    LNSAI^ITY    OF    MORTGAGOR.  S9T 

mortgage ;'  and  he  must  show  not  merely  an  incapacity  to 
make  a  vaHd  contract  at  the  time  of  the  execution  of  the 
mortgage,  but  also  that  the  mortgagee  knew,  and  took 
advantage  of,  the  mortgagor's  state  of  mind.'  Where  the  con- 
sideration has  been  paid  and  the  conveyance  was  perfectly  fair, 
no  undue  advantage  having  been  taken,  the  security  will  be 
held  good  for  its  amount,  although  the  insanity  may  be 
admitted  or  proved,  if  it  has  not  been  judicially  established.' 
If  the  insanity  of  the  mortgagor  has  once  been  established, 
however,  it  will  devolve  upon  the  party  claiming  under 
the  mortgage  to  establish  by  clear  and  satisfactory  evidence 
that  it  was  executed  during  a  lucid  interval,*  because  a  person, 
once  proved  to  have  been  insane,  will  be  presumed  to  remain 
so  until  the  contrary  is  shown.* 

§  334.  Defect  in  execution  and  record  of  mortgage. — 
If  a  mortgage  was  defectively  executed,  and  not  properly 
recorded,  these  facts  may  be  shown  in  defence  by  any  party 
not  absolutely  estopped  by  concurrence  in  the  transaction, 
such  as  a  subsequent  incumbrancer  who  was  not  chargeable 
with  notice  of  the  lien.'  Where  the  record  of  a  mortgage  is 
made  out  of  the  order  required  by  law,  it  will  not  be  sufficient 
to  give  notice  to  any  one  dealing  with  the  title  to  the  land, 
and  will  be  invalid  as  to  bona  fide  purchasers  and  incumbran- 
cers, without  actual  notice  ;*  and  the  same  is  true  where  the 
record  is  made  in  the  wrong  register,  or  in  the  wrong  book 


»  Curtis  V.  BrowneU,  42  Mich.  165  407  (1875) ;  s.  c.  21  Am.  Rep.  24,  and 

(1879).  notes  29  to  35. 

•  Fay   V.    Burditt,    81    Ind.    433  <  Ripley  v.  Babcock,  13  Wis,  425 

(1862) ;  8.  c.  43  Am.  Rep.  142  ;  Day  (1861).     See  Schuff  v.  Ransoa,   79 

V.  Seely,  17  Yt.  542  (1845) ;  Jacobs  Ind.  458  (1881) ;  Beviu  v.  Powell,  11 

V.  Richards,  18  Beav.  300  (1854).  Mo.  App.  216  (1882). 

»  VanHorn  v.  Keenan,  28  Bl.  445  »  Saxon  v.  Whittaker,  30  Ala.  237 

(1862);Copenrath  V.  Kienley,83Ind.  (1857).       See     Sprague     v.     Duel, 

18  (1882) ;  Fay  v.  Burditt,  81  Ind.  Clarke  Ch.  (N.  Y.)  90  (1839) ;  Breed 

443  (1862) ;  s.    c.  43  Am.  Rep.   142  ;  v.Pratt,  35  Mass.(18  Pick.)  115  (1836); 

Marmon  v.  Marmon,  47  Iowa,  121  Ballew  v.  Clark,  2  Ired.  (N.  C.)  L. 

(1877).  23  (1841) ;  Titlow  v.  Titlow,  54  Pa. 

»  Schuflf  V.  Ransom,  79  Ind.  458  St.  216  (1867) ;  Ripley  v.  Babcock, 

(1881);  Hardenbrook  v.    Sherwood,  13  Wis.  245  (1861). 

72  Ind.  403(1880);  Lancaster  Co.  Na-  «  New  York  Life  Ins.  and  Trust 

tional  Bank  v.  Moore,  78  Pa.   St.  Co.  v.  Staats,  21  Barb.  (N.  Y.)  570 


398   ALLEGING  DEFECT  IN  RECORD  OF  MORTGAGE.  [^  334. 

of  the  right  register.  Thus,  where  a  mortgage  deed  was 
recorded  by  the  officer  entrusted  with  the  duty  of  recording 
deeds,  on  the  last  page  of  a  former  volume  of  records  in  which 
no  mortgages  had  been  recorded  for  upwards  of  twelve  years, 
and  the  names  of  the  parties  were  not  entered  in  the  index 
of  mortgages,  it  was  held  that  the  mortgage  was  not  duly 
recorded  and  that  a  subsequent  lienor  had  a  priority  over 
the  mortgagee.'  In  an  action  to  foreclose  a  mortgage,  the 
fact  that  such  mortgage  was  not  recorded  within  the  time 
prescribed  by  statute,  is  not  a  defence  that  can  be  pleaded 
by  the  administrator  or  heirs  of  the  deceased  mortgagor." 

It  has  been  held  in  New  York,'  that  the  index  of  a  mort- 
gage is  no  part  of  the  record  thereof,  that  the  neglect  of  the 
county  clerk  to  index  it  in  the  proper  book  will  not  deprive 
the  mortgagee  of  his  right  of  priority,  and  that  the  mortgage 
is  notice  to  all  subsequent  purchasers  from  the  time  it  is  left 
for  record.*  A  mortgage  is  considered  as  recorded  from  the 
time  of  its  dehvery  to  the  county  clerk.  After  such  delivery 
nothing  more  is  required  to  be  done  to  perfect  the  record, 
except  at  the  proper  time  to  copy  the  mortgage  in  its  proper 
order  in  the  proper  book ;  and  yet,  if  the  mortgage  should 
be  mislaid,  or  lost  or  purloined  before  it  is  copied,  the  record 
thereof  would  still  remain  complete.* 

Where  an  essential  part  of  the  mortgage  is  omitted  from 
the  record,  it  will  be  constructive  notice  to  subsequent  mort- 
gagees and  purchasers  in  good  faith  only  of  what  appears 
on  the  record.'  Thus,  where  a  mortgage  was  given  to 
secure  three  thousand  dollars,  but,  by  mistake  of  the  clerk, 


(1854) ;  aS'd  subnom.  New  York  Life  '  The  Mut.  Life  Ins.  Co.  v.  Dake, 

Ins.  Co.  V.White  17  N.  Y.  469  (1858).  87  N.  Y.  257  (1881),  afi'g  1  Abb.  (N. 

'  New   York   Life    Ins.    Co.     v.  Y.)  N.  C.  381  (1876). 

White,  17  N.  Y.  469  (1858) ;  Sawyer  *  Wadsworth  v.  Wendell,  5  Johns. 

V.  Adams,  8  Vt.  172  (1836) ;  8.  c.  30  Ch.  (N.  Y.)  224,  230  (1821). 

Am.  Dec.  459.  *  Mut.  Life  Ins.  Co.  v.  Dake,  87 

»  Sawyer   v.    Adams,   8   Vt.   173  N.  Y.  257,  264  (1881). 

(1836) ;  s.  c.  30  Am.  Dec.  459.     See  «  Frost  v.  Beekman,  1  Johns.  Ch. 

Gillig  V.  Maas,  28  N.  Y.  191,   214  (N.  Y.)  288  (1814).     See  Mut.  Life 

(1853).  Ins.  Co.  v.  Dake,  87  N.  Y.  357,  263 

*  Evans  V.  Pence,    78    Ind.    439  (1881). 
(1881). 


§  335.]        ALLEGING    ALTERATIO:^    OF    MORTGAGE.  399 

was  registered  for  only  three  hundred  dollars,  it  was  held  to 
be  notice  to  subsequent  bona  fide  purchasers,  only  to  the 
extent  of  the  sum  described  in  the  registry.' 

§  335.  Allegation  of  alteration  of  instrument. — The 
material  alteration  of  a  mortgage  by  the  mortgagee,  or  by 
any  other  person  at  his  instance  or  with  his  knowledge  and 
consent,  after  it  has  been  executed  and  delivered  to  him, 
and  while  it  is  in  his  possession  or  custody,  by  changing 
the  description  of  the  premises,"  by  increasing  the  stated 
consideration  of  the  mortgage,  or  by  inserting  therein  an 
additional  obligation,*  without  the  knowledge  or  consent 
of  the  mortgagor,  will  have  the  effect  of  destroying  and 
annulling  the  instrument  as  between  the  parties,  and  the 
mortgage  will  not  be  enforceable  as  a  security  for  the  payment 
of  any  portion  of  the  indebtedness  therein  described.*  The 
rule  is  different,  however,  where  the  instrument  is  altered 
by  a  mere  stranger,  without  the  privity  or  consent  of  the 
mortgagee  or  of  other  parties  interested,  if  the  contents  of 
the  instrument,  as  it  originally  existed,  can  be  ascertained.* 

Thus,  it  has  been  held  that  the  validity  of  a  mortgage  will 
not  be  impaired  by  the  accidental  detachment  of  the  seal  after 
the  mortgage  has  been  left  at  the  proper  office  for  record  j 
and  where  the  preponderance  of  evidence  shows  that  the 
mortgage  was  signed  and  sealed  at  the  time  of  its  acknowl- 
edgment, the  absence  of  the  seal  afterwards  will  not  render 
the  mortgage  void.' 


» Frost  V.  Beekman,  1  Johns.  Cb.  (1872).     See  Pigot's  Case,  11  Coke, 

(N.  Y.)  288  (1814).  26  (1580);  Shep.  Touch.  69. 

'  Pereau  v.   Frederick,    17  Neb.  *  Waring  v.   Smyth,  2  Barb.  Ch. 

117  (1885).  (N.  Y.  )  119  (1874) ;  Lewis  v.  Payn, 

8  Johnson  v.  Moore,   33  Kan.  90  8  Cow.  (N.  Y.)  71  (1827);  s.  c.  18 

(1885).  Am.  Dec.  427  ;  Rees  v.  Overbaugh, 

*  Johnson  v.  Moore,  88  Kan.  90  6  Cow.  (N.  Y.)  746  (1827) ;  Jackson 

(1885).     See  Smith  v.  Fellows,  41  N.  v.  Malin,  15  Johns.  (N.  Y.)  293,  297 

Y.  Supr.  Ct.  (9  J.  &  S.)  86,  51  (1876);  (1818)  ;  Marcy   v.   Dunlap,  5  Lans. 

Waring  v.  Smyth,   2  Barb.  Ch.  (N.  (N.  Y.)  865  (1872) ;  United  States  v. 

Y.)  119  (1847) ;  Lewis  v.   Payn,   8  Linn,  42  U.  S.  (1  How.)  104  (1848) ; 

Cow.  (N.  Y.)  71  (1827)  ;  s.  c.  18  Am.  bk.  11  L.  ed.  64. 

Dec.  427  ;    Jackson    v.    Malin,   15  '  VanRiswick  v.  Goodhue,  50  Md. 

Johns.    (N.  Y.)  -293,    297,    (1818);  57(1878). 
Marcy  v.  Dunlap,  5  Lans.  (N.  Y.)  365 


400  ALLEGES'G    ALTERATION    OF    MORTGAGE.       [§335. 

As  early  as  Pigot's  Case,'  it  was  decided  that  "  when  a 
deed  is  altered  in  a  point  material,  by  the  plaintiff  himself, 
or  by  any  stranger,  without  the  privity  of  the  obligee,  be  it 
by  interlineation,  addition,  raising,  or  by  drawing  of  a  pen 
through  a  line,  or  through  the  midst  of  any  material  word, 
the  deed  thereby  becomes  void."  "  So,  if  the  obligee  him- 
self alters  the  deed  by  any  of  the  said  ways,  although  it  is  in 
words  not  material,  yet  the  deed  is  void  ;  if  a  stranger  with- 
out his  privity  alters  the  deed  by  any  of  the  said  ways,  in 
any  point  not  material,  it  shall  not  avoid  the  deed."*  But  in 
an  early  New  York  case,'  a  doubt  was  expressed  whether  the 
act  of  a  stranger  should  be  allowed  to  prejudice  a  party, 
although  the  alteration  might  be  in  a  material  part  of  the 
instrument ;  and  in  a  later  case^  it  was  held  that  it  should 
not.* 

It  is  now  the  well  settled  doctrine  in  this  country,  that  an 
immaterial  alteration  of  a  mortgage,  made  by  a  person  who 
stands  in  the  position  of  a  stranger  to  the  party  claiming 
under  it,  will  not  render  the  instrument  invalid,  and  that  it 
may  be  enforced  according  to  its  original  terms.*  The  doctrine 
announced  in  Pigot's  Case  was  recently  considered  and 
doubted  by  the  English  Court  of  Queen's  Bench  in  the  case 
of  Aldous  V.  Cornwall,'  where  it  was  held  that  the  addition 


>  11   Coke,  26  (1615).      The  doc-  «  Jackson  v.  Malin,  15  Johns.  (N. 

trine  of  Pigot's  Case  is  doubted  in  T.)  293,  297  (1818). 

Bigelow  V.  Stilphens,  35  Vt.   321,  *  Rees  v.  Overbaugh,  6  Cow.  (N. 

525  (1863) ;  Miller  v.  Stewart,  22  U.  Y.)  746  (1827). 

S.  (9  Wheat.)  681,  718  (1824) ;  bk.  6  »  See  Lewis  v.  Payn,  8  Cow.  (N. 

L.  ed.  189.  T.)  71,  73  (1827) ;  a.  c.  18  Am.  Dec. 

*  See  Lewis  v.  Payn,  8  Cow,  (N.  427. 

Y.)  71,  73  (1827)  ;  s.  c.  18  Am.  Dec.  «  Casoni  v.  Jerome,  58  N.  Y.  315, 

427  ;  Jackson  v.  Malin,    15  Johns.  321(1874);  Waring  v.  Smyth,  2  Barb. 

(N.  Y.)  293,  297  (1818).  Ch.  (N.  Y.)  119  (1847);  Rees  v.  Over- 

In  Sheppard's  Touchstone,  p.  69,  baugh,  6  Cow.  (N.  Y.)  746  (1827) ; 

it  is  said:     "If  the  alteration  be  Malin  v.  Malin,  1  Wend.  (N.  Y.)  625 

made   by    the    party    himself  that  (1828);   United  States  v.   Hatch,  1 

owneth  the  deed  albeit  it  be  in  a  Paine  C.  C.  336  (1824). 

place  not  material  and  it  tend  to  the  '  L.  R.  3  Q.  B.  573  (1868) ;  8.  c.  37 

advantage  of  the  other  party  and  L.  J.  Q.  B.  201.    Lush,  J.,  speaking 

his  own  disadvantage,  yet  the  deed  for  the  court,  says:    "We  are  not 

is  hereby  become  void."  boundby  the  doctrine  of  Pigot's  Case, 


§  336.]    ALLEGIN^G    ILLITEEACY    JlKD    KEGLIGEIS^OE.  401 

to  a  note  of  words  which  could  not  prejudice  any  person, 
would  not  destroy  its  validity. 

§  336.  Allegation  of  illiteracy  and  negligence.-Illitcracy 
or  ignorance  can  not  be  set  up  as  a  defence  to  a  suit  on  a 
contract,  where  there  was  no  fraud  on  the  part  of  the 
plaintiff,  nor  any  for  which  he  was  responsible.  Conse- 
quently, where  a  person,  who  is  illiterate,  executes  a 
mortgage  without  knowing  its  contents,  he  can  not  plead 
his  ignorance  as  a  valid  defence,  if  no  fraud  is  shown  ;' 
neither  can  his  grantee,  who  purchased  with  knowledge  of 
the  mortgage,  avail  himself  of  such  defence,'  unless  such 
mortgagor  was  prevented  from  knowing  the  contents  of  the 
mortgage  by  artifice  or  trickery  for  which  the  mortgagee 
was  responsible.'  But  where  fraud,  artifice  or  deceit  is 
used,  the  rule  is  different.  Thus,  it  has  been  held  that  the 
employment  of  a  trusted  kinsman  and  friend,  as  an  agent  of 
the  mortgagee,  to  misrepresent  the  contents  of  the  mortgage, 
whereby  its  execution  is  obtained  without  its  being  read,  is 
a  fraud  from  which  relief  will  be  granted,*  because,  where  a 
known  trust  and  confidence  is  reposed  in  the  person  making 
the  representations  and  there  is  a  relationship  justifying 
such  trust  and  confidence,  the  person  to  whom  the  represen- 
tations are  made  may  rely  upon  them  without  being  guilty 
of  negligence.* 

or  the  authority  cited  for  it ;  and,  not  'Leslie  v.    Merrick,   99  Ind.  180 

being  bound,  we  are  certainly  not  (1884). 

disposed  to  lay  down  as  a  rule  of  »  See  Leslie  v.  Merrick,  99  Ind. 

law, that  the  addition  of  words  which  180  (1884);   Eobinson  v.   Glass,    94 

can  not  possibly  prejudice  auy  one,  Ind.  211  (1883). 

destroys  the  validity  of    the  note.  ■*  Robinson  v.  Glass,  94  Ind.  211 

It  seems  to  us  repugnant  to  justice  (1883). 

and    common    sense    to    hold    that  »  Albany  Savings  Inst.  v.  Burdick, 

the  maker    of    a   promissory  note  87  N.   Y.   40  (1881);    Robinson  v.' 

is  discharged  from  his  obligation  to  Glass,  94  Ind.  211  (1883) ;  Worley  v. 

pay  it,  because  the  holder  has  put  Moore,  77  Ind.  567  (1881) ;  Matlock 

in  writing  on  the  note  what  the  law  v.  Todd,  19  Ind.  130  (1863)  ;  Peter 

■would  have  supplied  if  the  words  v.  Wright,  6  Ind.  183  (1855) ;  Bischof 

had  not  been  written."  v.  Coffelt,  6  Ind.  23  (1854) ;  Shaeffer 

»  Leslie  v.  Merrick,   99  Ind.  180  v.    Sleade,    7    Blackf ,    ( Ind. )   178 

(1884);  Robinson  v.  Glass,  94  Ind.  (1844). 
211  (1883). 

(2Si 


402  ALLEGING   ILLITERACY    AXD    NEGLIGENCE.     [§336. 

In  an  action  by  a  mortgagor  for  equitable  relief  from  a 
bond  and  mortgage,  which  he  had  been  fraudulently  induced 
to  execute,  which  bond  and  mortgage  had  been  assigned  to 
a  bona  fide  purchaser,  it  is  not  enough  for  him  to  show  that 
the  execution  of  such  instruments  was  induced  by  the  false 
and  fraudulent  representations  of  the  mortgagee ;  the  mort- 
gagor must  also  show  that  the  execution  of  the  papers  was 
without  negligence  on  his  part,  and  this  although  he  was  old, 
infirm  and  illiterate.' 

Negligence  in  the  execution  of  an  instrument  furnishes  no 
defence  to  a  suit  founded  thereon.  Thus,  where  one  who 
can  read,  depending  upon  the  representations  of  another 
as  to  the  contents  of  a  mortgage,  neglects  to  read  it 
before  he  executes  it,  he  will  be  bound  thereby,  although 
he  may  sign  what  he  would  not  have  executed  had  he  known 
its  contents."  A  person  who  executes  a  mortgage  without  a 
knowledge  of  its  contents,  will  not  be  relieved  therefrom, 
because  of  the  fact  that  its  contents  were  not  as  the  mort- 
gagee represented  them,  in  the  absence  of  any  relation  of 
trust  or  confidence  between  the  parties,  and  of  any  artifice 
or  trick  for  which  the  mortgagee  was  responsible,  by  which 
the  signature  to  the  mortgage  was  procured.* 


'  Montgomery  v.  Scott,  9  S.  C.  30  SuUivan,  4  Mass.  45  (1808) ;  8.  0.  8 

(1877) ;  s.  c.  30  Am.  Rep.  1.  Am.  Dec.  206 ;  Mackey  v.  Peterson, 

*  See  Chapman  v.  Rose,  56  N.  T.  29  Minn.  298,  305  (1882) ;  Shirts  v. 

137  (1874) ;  s.  c.  15  Am.  Rep.  401 ;  Overjohn,  60  Mo.  305  (1875) ;  Foster 

American  Ins.  Co.  v.   McWhorter,  v.  Mackinnon,  L.  R.  4  C.  P.  704 

78  Ind.  13G  (1881) ;  Nebeker  v.  Cut-  (1869). 

singer,  48  Ind.  436  (1874) ;  Douglass  »  Robinson  v.  Glass,  94  Ind.  811 

V.   Matting,   29    Iowa,   498  (1870);  (1883). 
a.  c.  4  Am.  Rep.  238 ;  Putnam  v. 


CHAPTER  XVI. 


ANSWERS  AND  DEFENCES. 

CONSIDERATION-USirRY— DEFENCES  AGAINST  ASSIGNEE  OP  MOBT- 

GAGE,  AND  AGAINST  PURCHASER  OF  NEGOTIABLE 

PAPER  SECURED  BY  MORTGAGE. 


837.  Want  of  consideration. 

338.  Partial   failure  of  consider- 
ation. 

839.  What  is  not  a  sufficient  con- 

sideration. 

840.  Mortgage     securing    future 

advances — Actual  consider- 
ation. 

841.  Mortgage     as    security    for 

goods    to    be    furnished — 
Actual  consideration. 

842.  Defence  of  illegal   or   void 

consideration. 

843.  Dlegal  or  void  consideration 

— When  no  defence  to  ac- 
tion  on   note   secured   by 
mortgage. 
844  Usury  as  a  defence. 

845.  How  to  allege  usury — What 

law  governs. 

846.  Who  may  avail  themselves 

of  the  defence  of  usury. 


§  347.  Defences  against  assignee  of 
mortgage. 

348.  Defence    against    voluntary 

assignee  in  bankruptcy. 

349.  Defence  against  a  fraudulent 

assignment. 

850.  Defence  against  transferred 
mortgage  payable  to  mort- 
gagee alone. 

351.  Defences  against  foreclosure 
by  bona  fide  purchaser  of 
negotiable  paper  secured  by 
mortgage. 

353.  Purchaser  of  negotiable  pa- 
per secured  by  mortgage 
takes  subject  to  equities 
against  it. 

353.  Same  rule  in  Illinois. 

354.  Defences  against  assignee  of 

mortgage  securing   a  non- 
negotiable  instrument. 

355.  Other  defences  against  such 

an  assignee. 


§  337'  Want  of  consideration. — It  is  common  informa- 
tion that  want  of  consideration  may  be  shown  in  answer  to  an 
action  on  a  contract,  and  that  when  established,  it  furnishes  a 
complete  defence.  It  follows,  necessarily,  that  want  of  consid- 
eration for  a  mortgage  may  be  set  up  as  a  defence  in  an 
action  to  foreclose  such  mortgage.*     Where  the  answer,  in 


>  See  Bridges  v.  Blake,  106  Ind. 
333  (1885);  Dugan  v.  Trisler,  69 
Ind.  553  (1880) ;  Gilchrist  v.  Man- 
ning, 54  Mich.  210  (1884) ;  Hughes 
V.  Thweatt,  57  Miss.  376  (1879); 
Blanchard  v.  Morey,  56  Vt.  170 
(1888). 


As  to  when  the  defence  of  a  want 
of  consideration  will  not  be  suffi- 
cient, see  Long  v.  Kinkel,  36  N.  J. 
Eq.  (9  Stew.)  359  (1883);  Best  v. 
Thiel,  79  N.  Y.  15  (1879). 


403 


404  WANT  OF  CONSIDEEATIO]^  AS  A  DEFENCE.      [§  337. 

an  action  to  foreclose  a  mortgage,  admits  the  execution  of 
the  mortgage  as  a  security  for  the  debt,  it  substantially 
admits  the  cause  of  action  ;  the  mere  denial  of  the  remaining 
allegations  of  a  complaint,  being  aimed  at  a  legal  conclu- 
sion, raises  no  issue,  and  is,  therefore,  insufficient.* 

Want  of  consideration  will  constitute  a  good  defence  to  a 
suit  for  foreclosure  brought  by  a  mortgagee's  administrator, 
even  though  the  mortgage  may  have  been  given  to  defraud 
creditors  ;"  because,  as  regards  such  fraudulent  purpose,  the 
mortgagee  is  in  no  better  condition  than  the  mortgagor,  as 
he  must  have  participated  in  it.'  It  is  said  that  the  meaning 
of  the  familiar  maxim,  in  pari  delicto  potior  est  conditio  defen- 
dentis,  is  simply  that  the  law  leaves  the  parties  exactly  where 
they  stood, — not  that  it  prefers  the  defendant  to  the  plaintiff, 
but  it  will  not  recognize  a  right  of  action  founded  on  an 
illegal  contract  in  favor  of  either  party  as  against  the  other.* 

A  want  of  consideration  for  a  note  secured  by  a  mortgage 
is  a  good  defence  to  a  suit  for  foreclosure  of  the  mortgage,* 
parol  evidence  being  admissible  to  show  that  no  debt  ever 
existed  between  the  parties  to  the  mortgage.*  And  upon  a 
motion  for  judgment  in  the  foreclosure  of  such  a  mort- 
gage, evidence  will  be  admissible  of  the  amount  of  liabilities, 
actual  and  contingent,  which  the  mortgage  was  given  to 
secure.'     Want  of  consideration  may  be  set  up  by  the  owner 


»  Kay  V.  Chiirchill,  10  Abb.  (N.Y.)  «  Conwell  v.  Clifford.  45  Tud.  392 

N.  C.  83  (1881).      See  Fosdick  v.  (1873);    Hannan    v.    Hannan,    123 

Groff,   23    How.   (N-.   Y.)    Pr.   158  Mass.  441  (1877) ;  Freeland  v.  Free- 

(1861) ;   Edson  v.  Dillaye,  8  How.  land,  102  Mass.  475  (1869) ;  Wearse 

(N.  Y.)  Pr.  273  (1853) ;  McMurray  v    Peirce,  41  Mass.  (24  Pick.)  141 

V.  Gifford,  5  How.  (K  Y.)  Pr.    14  (1837);  Matteson  v.  Morris,  40  Mich. 

(1850);  Cooley  v.  Hobart,  8  Iowa,  358  52  (1879).     See  Boiling  v.  Munchus, 

(1859).  65  Ala.  558  (1882) ;  Mell  v,  Mooney, 

2  Hannan  v.  Hannan,   123  Mass.  30  Ga.  413  (1860) ;  Coleman  v.  With- 

441    (1877);    Wearse  v.  Peirce,    41  erspoon,  76  Ind.  285(1881) ;  Price  v. 

Mass.  (24  Pick.)  141  (1837) ;  Goudy  Pollock  47  Ind.  362  (1874). 

V.  Gebhart,   1  Ohio  St.  262  (1853).  «  Hannan  v.    Hannan,  123  Mass. 

See  Hughes  v.  Thweatt,   57  Miss.  441  (1877);   Wearse  v.   Peirce,   41 

376  (1879).  Mass.  (24  Pick.)  141  (1837). 

«  Wearse  v.  Peirce,  41  Mass.  (24  •"  Freeland  v.  Freeland,  102  Mass. 

Pick.)  141  (1837).  475  (1869), 

"  Atwood  V   Fisk,  101   Mass.   363 
^1869). 


§§  338-339.]     FAILURE    OF   CONSIDERATION.  405 

of  the  equity  of  redemption,  or  by  any  one  entitled  to  or 
interested  in  the  surplus  arising  on  the  sale  of  the  premises. 
Thus,  a  junior  mortgagee  has  a  right  to  defeat  the  lien  of  a 
senior  mortgage,  by  showing  that  it  was  executed  without 
consideration.' 

§  338.  Partial  failure  of  consideration. — Where  the 
actual  consideration  for  a  mortgage  was  less  than  the  amount 
for  which  it  was  executed  as  a  security,  the  decree  on  a  fore- 
closure should  be  entered  only  for  the  actual  amount  due  on 
the  mortgage  ;"  the  amount  of  the  consideration  may  be 
proved  by  the  admissions  of  the  mortgagee.'  A  partial 
failure  of  consideration  is  always  a  defence  pro  tanto.  But 
such  failure  of  consideration  must  be  distinctly  pleaded,*  for, 
where  the  real  debt  owing  to  the  mortgagees  is  in  fact  less 
than  the  sum  named  in  the  mortgage,  neither  they  nor  their 
assignees  can  enforce  it  for  more  than  the  actual  amount 
due.*  The  burden  of  proof  is  always  on  the  defendant 
to  show  that  the  actual  consideration  was  less  than  the 
amount  secured  by  the  mortgage,  if  the  plaintiff  claims 
the  full  amount,*  for  it  is  a  presumption  of  fact  that  the 
sum  mentioned  in  a  mortgage  as  the  consideration  therefor, 
is  the  actual  amount  secured  ;  and  very  convincing  proof  is 
required  to  rebut  this  presumption.'' 

§  339.  What  is  not  a  sufficient  consideration. — Where 
a  claim  is  without  foundation,  a  release  therefrom  will  not 
constitute  a  valid  consideration  for  a  mortgage  ;*  but  an 
extension  of  time  for  the  payment  of  an  existing  obligation 


'  Coleman  v.Witherspoon,  76  Ind.  *  Rood  v.  Winslow,   Walk.    Ch. 

285(1880).  (Mich.)  340  (1844);    a    c.  2  Doug. 

«  Dunham  v.  Cudlipp,  94  K  Y.  129  (Mich.)  68  (1845).     See  Philbrook  v. 

(1883) ;  Laylin  v.  Knox,  41  Mich.  40  McEwen,  29  Ind.  347  (1868). 

(1879).  *  Wiswall  v.  Ayres,  51  Mich.  324 

»  Mackay  v.  Browufleld,  13  Serg.  (1883). 

&  R.  (Pa.)  239  (1825).     See  Abbe  v.  '  Wiswall  v.  Ayres,  51  Mich.  324 

Newton,  19  Conn.  20  (1848) ;   Rood  (1883). 

V.  Winslow,  Walk.  Ch.  (Mich.)  340  «  Harris  v.  Cassady,  107  Ind.  158 

(1844)  8.  c.  2 Doug.  (Mich.)  68  (1845).  (1886). 

«  Dunham  v.  Cudlipp,  94  N.  Y. 
129  (1883). 


406      nfSUTFICIENT  CONSIDERATION  AS  A  DEFENCE.  [§  339. 

will  be  a  sufficient  consideration  to  support  a  mortgage  •/  so 
also  will  an  existing  promissory  note,'  or  an  existing  indebt- 
edness of  any  kind,  be  a  sufficient  consideration.*  But  a  mort- 
gage given  to  secure  the  pre-existing  debt  of  another,  there 
being  no  extension  of  time  for  payment  nor  any  new  consider- 
ation, will  not  be  founded  upon  a  sufficient  consideration  to 
support  a  foreclosure  ;*  neither  will  a  promise  to  pay  the  debt 
of  another,  for  which  the  mortgagor  is  already  liable  as 
surety,  be  a  sufficient  consideration  to  sustain  a  mortgage.* 
It  has  been  held  in  Indiana  that  a  mortgage  executed  by  a 
husband  and  wife,  upon  the  separate  property  of  the  latter 
to  secure  an  overdue  note,  on  which  the  husband  was  liable 
as  surety,  and  without  any  other  or  further  consideration,  is 
invalid,  although  under  the  statute  a  married  woman  is 
empowered  to  incumber  her  separate  property  for  the  debt 
of  a  third  person.* 

Where  a  mortgage,  which  was  given  to  secure  the  payment 
of  judgments  confessed  by  the  mortgagor,  is  sought  to  be 
foreclosed,  the  fact  that  the  judgments  were  void  for  want 
of  compliance  with  the  statute,  may  be  set  up  as  a  defence 
to  show  a  want  of  consideration.*  But  it  has  been  held  that 
where  there  was  any  consideration  whatever  for  the  mort- 
gage, inquiry  could  not  be  made  upon  the  trial  whether  the 
consideration  was  full  and  adequate.*  Where  a  mortgage 
is  executed  and  entrusted  to  an  agent  for  the  purpose  of 
procuring  a  loan,  and  the  agent,  instead  of  procuring  the 
loan,  uses  it  for  another  purpose  and  misappropriates  the 
proceeds,  the  mortgage  will  be  void,  there  being  no  consider- 
ation therefor,*  except  in  a  case  where  the  assignee  thereof 


'  Farmers'  Bank  of  Mooresville  v.  *  Harris  v.  Cassady,  107  Ind.  158 

Butterfield,    100    Ind.    229    (1884);  (1886). 

Port  V.  Embree,  54  Iowa,  14  (1880).  «  Bridges  v.  Blake,  106  lud.  332 

^  Ayers    v.    Adams,    82  Ind.    109  (1885). 

(1882) ;  Rowell  v.  Williams,  54  Wis.  '  Austin  v.    Grant,   1  IVIich.    490 

636  (1882).  (1850). 

»  Buck  V.  Axt,  85  Ind.  512  (1882);  s  Norton  v.  Pattee,  68  N.  T.  144 

Evans     v.     Pence,     78     Ind.     439  (1877). 

(1881).  »  Davis  v.  Bechstein,  69  N.  Y.  440 

♦  Kansas  Manuf.  Co.  v.  Gandy,  11  (1877) ;  Graver  v.  Wilson,  14  Abb. 

Neb.  461  (1881).  (N.  Y.)  Pr.  N.  S.  374  (1872). 


§§  340-341.]  MORTGAGE  EOK  FUTUKE  ADVANCES.      407 

might  be  entitled  to  the  protection  accorded  to  a  bona  fide 
holder  of  negotiable  paper. 

§340.  Mortgage  securing  future  advances-Actual 
consideration.-A  mortgage  to  secure  indefinite  future 
advances  is  valid  not  only  between  the  parties,  but  also  as  to 
third  persons-/  so  also  is  a  mortgage  given  to  secure  a  pre- 
existing debt  and  future  advances.'  As  between  the  parties 
whatever  may  be  its  effect  as  to  third  persons,  it  is  not 
essential  to  the  validity  of  a  mortgage  Hen  to  secure  future 
advances  and  also  a  pre-existing  debt,  that  the  instrument 
should  recite  fully  the  character  of  the  indebtedness  which 
it  was  given  to  secure.' 

Where  it  appears  that  a  mortgage  was  given  to  secure 
future  advances  which  were  never  made,  a  complamt  to  fore- 
close will  of  course  be  dismissed;*  because,  if  no  advances 
were  made  upon  the  mortgage  and  no  credit  was  given  it 
is  absolutely  without  consideration.   A  mortgage  executed  toi 
the  purpose  of  securing  future  advances  can  not  be  enforced 
for  a  different  liability  or  purpose.^     When  the  mortgage  m 
terms  secures  future  advances,  the  sum  named  as  the  con- 
sideration is  of  no  importance,'  because  it  will  be  security 
for  the  money  actually  advanced  upon  it,  and  for  nothing 
more.^     And  in  an  action  for  the  foreclosure  of  a  mortgage 
o-iven  to  secure, future  advances,  a  failure  to  advance  the 
entire   amount    desired   to  be   secured  by  such  executory 
mortgage,  can  not  be  set  up  as  a  defence  against  advances 
actually  made.' 

§  341.    Mortgage  as  security  for  goods  to  be  furnished 
—Actual  consideration.— A  mortgage  taken  in  good  faith, 

1  Jarratt  v.  McDaniel.  32  Ark.  598  «  Miller  v.  Lockwood,   33  N.  Y. 

,,o««.)  293,  299  (1865). 

»  Sanders  v.   Farrell.   83  Ind.  28  ^  The  mortgage  may  also  stand  as 

^jTo^  security  for  the  accomplishment  m 

^»  Forsyth  v.  Freer.  Illges  &  Co..  G2  the  future  of  definite  plans  or  pur- 

Ala.  443  (1878).  POses.     See  Bell  v.  Radchff .  32  Ark. 

*  McDowell  V.Fisher,  25  N.J.  Eq.  645(1878).                     „^  t,    ,    m 

(10  C  E.  Gr.)  93  (1874).  «  Dart  v.  McAdam,  27  Barb.  (N. 

s  Mizner  v.  Kussell,  29  Mich.  229  Y.)  187  (1858). 
(1874). 


408  MORTGAGE   FOE   FUTUBE   ADVAlfCES.  [§  342. 

the  consideration  for  which  is  a  present  debt  and  the  promise 
of  the  mortgagee  to  furnish  in  the  future  a  stated  amount  of 
goods,  is  valid  as  between  the  parties,  is  not  a  fraud  upon 
creditors  of  the  mortgagor,  and  will  be  upheld  by  the  courts.' 
Thus,  where  a  deed  of  trust  recited  that  it  was  executed  to 
secure  a  given  sum  for  supplies  already  furnished,  and  supplies 
to  be  furnished  and  cash  to  be  advanced  during  the  year  to 
enable  the  grantors  to  accomplish  a  specified  purpose,  the 
court  held  that,  while  the  amount  was  limited  in  terms,  the 
controlling  purpose  of  the  deed  was  to  secure  a  sufficient 
amount  of  supplies  to  enable  the  grantors  to  accomplish  a 
specified  purpose,  and  that  a  court  of  equity,  if  necessary,  in 
order  to  carry  out  the  purpose  of  the  trust,  will  uphold  and 
protect  additional  advances  over  and  above  the  limitations 
stated  in  the  deed." 

A  mortgage  given  to  secure  the  value  of  goods  to  be  pur- 
chased, is  valid  to  the  extent  of  the  goods  sold,  although  the 
mortgagor  may  in  fact  be  insolvent  at  the  time,  and  becomes 
a  bankrupt  shortly  afterwards.'  A  mortgage  given  to  secure 
a  note  for  a  fixed  sum,  payable  absolutely,  but  with  no 
actual  consideration  other  than  an  undertaking  to  furnish 
goods,  which  the  mortgagees  fail  to  carry  out,  can  not  be 
enforced,  except  where  the  action  is  brought  by  a  bona  fide 
assignee  thereof.* 

§  342.     Defence  of  illegal  or  void  consideration. — A 

mortgage  executed  upon  an  illegal  consideration  is  void  ab 
initio,  because  the  nullity  of  the  principal  debt  destroys  all 
securities  accompanying  it ;'  and  the  actual  facts  of  the  trans- 
action may  be  shown  in  defence,  though  they  contradict  the 
terms  of  the  instrument.*  In  an  action  to  foreclose  a  mortgage, 
where  the  defence  set  up  was  that  the  mortgage  was  given 


'Sanders  v.  Farrell,   83  Ind.  28  '  Chatenond  v.  Herbert,  30  La.  An. 

(1882).  404  (1878). 

» Bell  V.   Radcliff,    33    Ark.   645  « Norris  v.  Norrls,  9  Dana  (Ky.) 

(1878).  317  (1840) ;  s.  c.  35  Am.  Dec.  138  ; 

»  Marvin  v.  Chambers,  13  Blatchf .  McQuade  v.  Rosecrans,  36  Ohio  St. 

C.  C.  495  (1875).  443  (1881) ;    Goudy  v.   Gebhart,   1 

*  Fisher  v.  Meister,  24  Mich.  447  Ohio  St.  263  (1853) ;  Raguet  v.  Roll, 

(1872J,  7  Ohio  77  (1835). 


§  342.]        DEFENCE    OF    ILLEGAL    CONSIDERATION.  4.00 

to  secure  twice  the  amount  of  money  loaned  thereon  by  the 
mortgagee,  with  the  intention  of  defrauding  the  creditors  of 
the  mortgagor,  the  court  held  that  the  consideration  of  the 
mortgage  being  entire  and  illegal,  a  court  of  equity  could  not 
aid  in  its  foreclosure ;  and  that  the  defence  of  illegality  of 
consideration  in  such  a  case  may  be  made  by  the  mortgagor 
or  by  any  person  succeeding  to  his  rights  and  interests.' 

Every  contract  or  agreement,  the  consideration  for  which 
is  immoral,  criminal  or  unlawful,  is  absolutely  void,  and  no 
action  can  be  sustained  for  its  enforcement.  Thus,  a  promis- 
sory note,  the  consideration  for  which  is  an  agreement  not  to 
prosecute  the  maker  for  a  felony,  is  a  contract  against 
public  policy,'  and  therefore  void ;  and  a  mortgage  given  to 
secure  such  a  note  can  not  be  enforced.'  In  an  action  to 
foreclose  a  mortgage  executed  upon  the  consideration,  that 
the  son  of  the  mortgagor  who  was  then  under  arrest  for 
embezzlement  should  not  be  prosecuted,  it  was  held  that 
the  mortgage  was  based  upon  an  illegal  consideration  and 
was  therefore  void."  A  mortgage,  the  consideration  of 
which  is  in  whole  or  in  part  the  withdrawing  of  a  prosecution 
for  conspiracy  to  defraud  and  for  embezzlement  as  a  bank 
officer,  is  likewise  void.' 

In  an  action  to  foreclose  a  mortgage,  a  subsequent  incum- 
brancer by  attachment  and  judgment  against  the  mortgagor, 


'  McQuade  v.  Rosecrans,  36  Ohio  Spalding  v.  Bank  of  Muskingum,  12 

St.  442  (1881).  Ohio,    544,    548   (1841) ;    Moore    v. 

« See  Vanover    v.    Thompson,    4  Adams,   8  Ohio,    372,   375  (1838) ; 

Jones  (N.  C.)  L.  485  (1857) ;  Thomp-  Goudy  v.  Gebhart,   1  Ohio  St.  265 

son  V.  Whitman,  4  Jones  (N.  C.)  L.  (1853). 

47  (1856) ;  Bostick  v.  McLarren,  2  4  pggd  v.  McKee,  42  Iowa,   689 

Brev.  (S.  C.)  L.  275  (1809) ;  Badger  (1876) ;    s.  c.    20    Am.    Rep.    631  ; 

V.  Williams,  1  D.   Chip.   (Vt.)  137  Raguet  v.  Roll,   7  Ohio,  77  (1885) ; 

(1797) ;  Rourke  v.  Mealy,   Ir.  L.  R.  Roll  v.  Raguet,  4  Ohio,  400  (1829) ; 

4  Ch.  Div.  166,  175  (1879).     See  also  e.  c.  22  Am.  Dec.  759. 

Hoyt  V.  Macon,  2  Colo.  502  (1875) ;  s  Pearce  v.  Wilson,  111  Pa.  St.  14 

Bierbauer  v.  Worth,  10  Biss.  C.  C.  (1885) ;  Ormerod  v.    Dearman,    100 

60  (1880);  8.  c.  5  Fed.  Rep.  336.  Pa.  St.  561  (1882) ;  s.  c.  45  Am.  Rep. 

2  Cameron  v.  McFarland,  2  Car.  391  ;  Riddle  v.  Hall,  99  Pa.  St.  116 

L.  R.  (K  C.)  415  (1815) ;  s.  c.  6  Am.  (1881) ;  Bredin's  Appeal,  92  Pa.  St, 

Dec.  566  ;  Roll  v.  Raguet,  4  Ohio  400  241  (1879). 
(1829) ;  8.  c.  22  Am.  Dec.  759.     See 


410  DEFJEINCE    OF   ILLEGAL    CONSLDEKATION.        [§343. 

claimed  that  the  mortgage,  upon  which  the  suit  was 
founded,  was  void,  because  it  was  intended  to  hinder,  delay 
and  defraud  the  creditors  of  the  mortgagor,  and  because 
it  was  against  public  policy  as  being  an  attempt  to  escape 
taxation.  The  court  held  that  neither  of  these  defences 
could  be  set  up  by  such  subsequent  incumbrancer,  after  the 
mortgagor  had  waived  them  by  making  a  default,  and  that 
it  was  questionable  whether  even  the  mortgagor  could  have 
availed  himself  of  them.* 

§  343.  Illegal  or  void  consideration — When  no  defence 
to  action  on  note  secured  by  mortgage. — Where  a  nego- 
tiable instrument  secured  by  a  mortgage  has  been  transferred 
to  a  bona  fide  purchaser,  it  has  been  said  that  even  duress 
in  its  execution  will  not  be  available  as  a  defence  against 
such  assignee  in  an  action  on  the  note."  And  the  fact  that 
the  consideration  of  a  promissory  note  secured  by  a  mort- 
gage was  illegal  or  void,  can  not  be  set  up  as  a  defence  in 
an  action  by  an  assignee  who  purchased  the  note  and  mort- 
gage in  good  faith  for  a  valuable  consideration  and  without 
notice.* 

It  has  been  said  by  the  supreme  court  of  Iowa  that  while 
it  is  true,  that  a  bona  fide  "^xyxz^xzstx  oi  a  note  before  maturity 
takes  the  mortgage  securing  it,  as  he  takes  the  note,  free 
from  the  defences  to  which  it  is  subject  in  the  hands  of  the 
mortgagee,  yet  that  this  doctrine  will  not  be  extended  to  a 
case  where  the  mortgage  is  upon  the  homestead  of  a  woman 
who  did  not  sign  the  note  and  whose  signature  to  the  mort- 
gage was  obtained  by  duress.* 

An  exception  to  the  general  rule  laid  down  above,  exists 
vhere  the  assignment  of  the  note  and  mortgage  is  made  sub- 
ject by  its  terms  to  the  rights  of  the  mortgagor  ;  for  in  such  a 
case,  the  assignee  acquires  no  greater  rights  than  the  mort- 
gagee himself  possessed.' 


>  Nichols  V.   "Weed   Sewing   Ma-  Dec.  (N.  Y.)  253  (1866) ;  Taylor  v. 

chine    Co.,    27  Hun    (N.   Y.)    200  Page,  88  Mass.  (6  Allen),  86  (1863). 

(1882).  4  First  National  Bank  of  Nevada 

«  Beals  V.  Neddo.  1  Mc  Cr.  C.  C.  v.  Bryan,  62  Iowa,  42  (1883). 

206  (1880).  «  Fisher  v.  Otis,  3  Chand.  (Wis.) 

•  Smart  v.  Bement,  4  Abb,  App.  83  (1852). 


USURY    AS    A    DEFENCE. 


411 


§  344.] 

§  344.  Usury  as  a  defence.— It  is  well  settled  that  usury 
may  be  set  up  as  a  defence  to  a  bill  to  foreclose  a  mortgage, 
and  that  the  mortgage  will  be  declared  void,  if  such  defence 
is  established.'  This  is  especially  true  when  the  evidence 
shows  that  the  mortgage  was  executed  in  pursuance  of  an 
usurious   agreement.'     But    where   a   valid    and   subsistmg 


1  See  Freeman  v.  Auld,  44  N.  T. 
50  (1870);   Mumford  v.    American 
Life  Ins.  and  Trust  Co.,  4  N.  Y.  463 
(1851);  Brooks  v.  Avery,  4  N.  Y. 
225  (1850) ;  McCraney  v.  Alden,  46 
Barb.   (N.  Y.)  372  (1866) ;  Soule  v. 
The  Union  Bank,  45  Barb.    (N.  Y.) 
Ill  (1865) ;  Vickery  v.  Dickson,  35 
Barb.   (N.   Y.)  96  (1861)  ;  Lane  v. 
Losee,   2  Barb.   (K  Y.)  56  (1847); 
Warner  v.  Gouverneur,  1  Barb.  (N. 
Y.)  36  (1847)  ;  Bush  v.  Livingston,  2 
Cai.  Cas.  (N.  Y.)  66  (1805) ;  8.  c.  2 
Am.  Dec.  316 ;  Jackson  v.  Golden, 
4  Cow.  (N.  Y.)  266  (1825) ;  Miller  v. 
Hull,   4  Den.    (N.  Y.)    104  (1847) ; 
Pearsall  v.  Kingsland,  3  Edw.  Gh. 
(N.  Y.)  195  (1838) ;  Wheaton  v.  Voor- 
his,  53  How.  (N.  Y.)  Pr.  319  (1877); 
Stoney  v.  American  L.  Ins.  Co.,  11 
PaiseCh.  (N.Y.)  635(1845) ;  Rigliter 
V.  Stall,  3  Sandf.  Ch.  (N.  Y.)  608 
(1846) ;    Neefus    v.    Vanderveer,    3 
Sandf.  Gh.  (N.  Y.)  268  (1846);  New 
York  Dry  Dock  Go.  v.  American  L. 
Ins.  &T.  Co.,  3  Sandf. Ch.  (KY.)215 
(1846);  Fox  v.  Lipe,  24  Wend.  (N. 
Y.)  164  (1840) ;  Jackson  v.  Packard, 
6  Wend.  (N.  Y.)  415  (1831) ;  Munter 
V.  Linn,  61  Ala.  492  (1878)  ;  Mitchell 
T.  Preston,  5  Day  (Conn.)  100  (1811); 
Nichols  V.  Cosset,   1  Root  (Conn.) 
294  (1791) ;  Sherman  v.  Gassett,   9 
ni.   (4  Gilm.)  521  (1847)  ;  Gambril 
V.  Doe,  8  Blackf.  (Ind.)  14  (1846); 
fl.    c.    44    Am.    Dec.    760 ;    Tyson 
V.  Rickard,  3  Har.  &  J.  (Md.)  109 
(1810);    8.    c.     5    Am.    Dec.     424 ; 
Drury  v.  Morse,  85  Mass.   (3  Allen), 
445  (1862) ;  Hart  v.  Goldsmith,  83 


Mass.  (1  Allen),  145  (1861) ;  Baxter 
V.  Mclntire,  79  Mass.  (13  Gray),  168 
(1859) ;  Thomes  v.  Cleaves,  7  Mass. 
361  (1811)  ;  Donnington  v.  Meeker, 
11  N.  J.  Eq.  (3  Stockt.)  362  (1857) ; 
Gotheal  v.  Blydenburgh,   5    N.   J. 
Eq.  (1   Halst.)  17  (1845);   Cunning- 
ham V.  Davis,  7  Ired.  (N.  C.)  Eq.  5 
(1850) ;  Ballinger  v.  Edwards,  4  Ired. 
(N.  C.)  Eq.  449  (1847) ;  Union  Bank 
V.   Bell,    14  Ohio   St.    200    (1862)  ; 
Lockwood  V.  Mitchell,  7  Ohio  St. 
387  (1857) ;  s.  c.  70  Am.  Dec.  78  ; 
Morris     V.     Way,    16    Ohio,    469 
(1847) ;  Heath   v.  Page,  48  Pa.  St. 
130    (1864);    Greene    v.    Tyler,  39 
Pa.  St.  361  (1861);  Dyer  v.  Lincoln, 
11  Vt.    300   (1839) ;    Robertson   v. 
Campbell,    2    Call    (Va.)   354,    421 
(1800) ;  Fay  v.  Lovejoy,  20  Wis.  407 
(1866) ;    Richards    v.    Worthley,    5 
Wis.  73  (1856) ;  DeButts  v.  Bacon, 
10  U.  S.  (6  Gr.)  252  (1810);  bk.  3  L. 
ed.  215  ;  Morgan  v.  Tipton,  3  McL. 
C.  G.  339  (1844);  Hodgkison  v.Wyatt, 
4  Ad.  &  E.  N.  S.  749  (1843) ;  Black- 
burn V.  Warwick,   2  Y.   &  C.  93 
(1836). 

«  See  Walch  v.  Cook,  65  Barb. 
(N.  Y.)  30  (1873) ;  Vickery  v.  Dick- 
son,  35  Barb.  (N.  Y.)  96  (1861); 
Andrews  v.  Poe,  30  Md.  485  (1869); 
Aldrich  V.Wood,  26  Wis.  168(1870). 
But  see  Patterson  v.  Birdsall,  64  N.Y. 
294  (1876) ;  8.  c.  21  Am.  Rep.  609  ; 
Spencer  v.  Ayrault,  10  N.  Y.  202 
(1854) ;  Abrahams  v.  Claussen,  52 
How.  (N.  Y.)  Pr.  241  (1876) ;  White 
V.  Lucas,  46  Iowa,  319  (1877). 


412  HOW    TO    PLEAD     USURY.  [§345 

debt  is  included  in  a  security,  or  made  the  subject  of  a  con- 
tract, which  is  void  for  usury  or  for  any  other  reason,  it  will 
not  be  destroyed.  Although  a  valid  mortgage  may  be  satis- 
fied and  canceled  of  record  upon  being  made  a  part  of  a 
new  usurious  mortgage,  it  can  nevertheless  be  revived  and 
enforced  in  case  the  new  security  is  declared  to  be  void.' 
Thus,  where  a  plaintiff  advanced  money  to  pay  a  mortgage, 
taking  another  mortgage  to  secure  such  advance,  and  the 
second  mortgage  was  declared  void  for  usury,  it  was  held 
that  the  usury  of  the  second  mortgage  did  not  affect  the 
validity  of  the  first  mortgage  and  that,  the  latter  mortgage 
being  void,  the  prior  mortgage  survived  and  could  be  enforced 
by  the  plaintiff,"  because  by  paying  the  first  mortgage  the 
plaintiff  became  equitably  subrogated  to  all  the  rights  of 
the  mortgagee  whom  he  paid,  and  the  mortgage  must  be 
regarded  as  still  subsisting  and  unextinguished,  as  against 
the  mortgagors.* 

§  345.    How  to  allege  usury  —  What  law  governs. — 

While  full  effect  will  be  given  to  the  statute  against  usury, 
yet  nice  distin'^ions  will  not  be  favored  for  the  purpose  of 
extending  its  penalties  to  cases  not  within  the  spirit  of  the 
statute.*  Where  usury  is  set  up  as  a  defence  to  a  bill  to  fore- 
close a  mortgage,  the  defendant  will  be  held  strictly  to  j^roof 
of  the  usurious  contract  as  alleged  in  his  answer  ;*  and  a 
variance  between  the  usurious  contract  set  up  in  the  answer 
and  that  established  by  the  evidence  at  the  hearing,  will  be 
fatal  to  the  defence.*     If  the  defendant  pleads  generally  that 


»  Patterson  v.  Birdsall,  64  N.  Y.  294  (1876) ;  s.  c.  21  Am.  Rep.  609. 

394  (1876).     See  Gerwig  v.  Bitterly,  See  Elsworth  v.  Lockwood,  42  N.  Y. 

:.6  N.  Y.  214  (1874),  aff'g  64  Barb.  89  (1870);  Averill  v.  Taylor,   8  N. 

(N.Y.)630  :  Winsted  Bank  v.  Webb,  Y.  44  (1853) ;  Pardee  v.  VanAnken, 

39  N.  Y.  325  (1868) ;    Farmers    &  3  Barb.  (N.  Y.)  534  (1848) ;  Jenkins 

Mechanics'  Banlt  of  Genesee  v.  Jos*  v.  Continental  Ins.  Co.,  12  How.  (N, 

]yn,  37  N.  Y.    353  (1867)  ;  Cook  v.  Y.)  Pr.  67  (1855). 

Barnes,  36  N.  Y.  520  (1867) ;  Rice  *  See  Patterson  v.  Birdsall,  64  N. 

V.  Welling,  5  Wend.   (N.  Y.)  595  Y.  294,  298  (1876) ;  s.  c.  21  Am.  Rep. 

(1830).  609. 

«  Patterson  v.  Birdsall,  64  N.  Y.  "  Richards  v.  Worthley,  5  Wis.  73 

294  (1876)  ;  s.  c.  21  Am.  Rep.  609.  (1856).  See  Atwater  v.  Walker,  16  N. 

«  Patterson  v.  Birdsall,  64  N.  Y.  J.  Eq.  (1  C.  E.  Gr.)  42  (1863). 


§  345.]  HOW    TO   PLEAD    USURY.  413 

the  mortgage  contract  is  usurious  without  a  specific  alle- 
gation as  to  where  the  contract  was  made,  the  defence 
will  be  limited  to  the  statute  regarding  usury  in  the  state 
in  which  the  suit  is  pending,  and  its  usurious  character 
under  any  other  statute  can  not  be  shown.' 

The  law  governing  a  contract  is  that  of  the  state  where  it 
was  made,  if  it  was  entered  into  in  a  state  other  than  that  in 
which  the  mortgaged  property  is  situated.'  Where  both 
parties  reside  in  the  same  state  which  is  also  the  place  of 
contract,  but  the  land  is  situated  in  another  state,  if  nothing 
is  said  about  the  place  of  payment,  the  debt  is  presumably 
payable  in  the  state  where  the  parties  reside  and  where  the 
contract  was  made  ;  and  the  validity  of  the  contract  will  be 
determined  by  the  laws  of  such  state  ;'  but  if  the  note  and 
mortgage  are  made  payable  in  the  state  where  the  land  is 
situated,  the  laws  of  that  state  will  govern  the  construction 
and  the  legal  effect  of  the  contract.* 

In  cases  where  the  defence  relied  on  is  that  the  contract 
is  usurious  by  the  laws  of  the  state  where  it  was  made,  the 
defendant  must  plead  this  fact,  and  show  in  what  state 
the  contract  was  made,  and  allege  that  it  is  in  viola- 
tion of  the  usury  laws  of  such  state."  It  is  not  within  the 
scope  of  this  work  to  deal  with  the  vexed  question  of  what 


•  Wheaton  v.  Voorhis,   53  How,  (1867) ;  McCraney  v.  Alden,  46  Barb. 

(N,  Y.)  Pr.  319  (1877).     See  Cloyes  (N.  Y.)  272  (1866)  ;  Dolman  v.  Cook, 

V.  Thayer,  3  Hill  (N.  Y.)  564  (1842) ;  14  N.  J.  Eq.  (1  McCart.)  56  (1861) ; 

Vroom  V.  Ditmas,  4  Paige  Ch.  (N.  Kennedy  v.    Knight,   21   Wis.    340 

Y.)  526  (1834) ;  Munter  v.  Linn,  61  (1867) ;     Newman    v.   Kershaw,    10 

Ala.  492  (1878) ;  8.  c.  2  South.  L.  J.  Wis.  338  (1860). 

205  ;  Baldwin  v.  Norton,  2  Conn.  ^  gee  Cope  v.  Wheeler,  41  N.   Y. 

161  (1817)  ;  Maher  v.   Lanfrom,  86  303,  309  (1869),  aff'g  53  Barb.  (N.  Y.) 

111.  513  (1877) ;  Richards  v.  Worth-  350  (1867) ;    Williams  v.  Fitzhugh, 

ley,  5  Wis.  73  (1856).  37  N.  Y.  444  (1868) ;   Williams  v. 

1  Atwater  v.  Walker,  16  N.  J.  Eq.  Ayrault,  31  Barb.  (N.  Y.)  364  (1860); 

(1  C.   E.    Gr.)  42  (1863).     See  also  Dobbin  v.  Hewett,   19  La.  An.  513 

Hosier  v.  Norton,  83  111.  519  (1876) ;  (1867) ;  Blydenburgh  v.  Cotheal,  5 

Bennington  Iron  Co.  v.  Rutherford,  N.  J.  Eq.  (1  Ilalst.)  (1847). 

9  N.    J.   L.   (3  Harr.)  467  (1842);  *  Nichols  v.  Cosset,  1  Root  (Conn.) 

Dolman  v.  Cook,  14  N.  J.  Eq.  (1  294  (1791) ;  Duncan  v.  Helm,  22  La. 

McCart.)  56  (1861).  An.  418  (1870). 

*  Cope  V.  Wheeler,  41  N.  Y.   303,  ^  Curtis  v.  Mastin,   11  Paige  Ch. 
309  (1869),  aff'g  53  Barb.  (N.  Y.)  350  (N.  Y.)  15  (1844) ;  Dolman  v.  Cook, 


414 


WHO    MAY   MAKE   DEFENCE    OF   USURY.        [§346. 


is  and  what  is  not  usury ;  the  reader  is  referred  to  the  stan- 
dard text-books  dealing  with  that  subject. 

§  346.  Who  may  avail  themselves  of  the  defence  of 
usury. — The  defence  of  usury  may  be  set  up  not  only  by 
the  mortgagor  himself,  but  by  any  person  claiming  under 
or  in  privity  with  him  ;'  but  it  can  not  be  set  up  by  a 
stranger  to  the  original  transaction."  Some  of  the  cases 
hold  that  any  person  who  has  become  interested  in  the 
property  subject  to  the  mortgage,  may  set  up  the  defence 
of  usury,  unless  he  purchased  the  property  expressly  subject 
to  such  mortgage,  or  assumed  the  payment  of  it.' 

Thus,  it  has  been  held  that  the  defence  of  usury  is  available 
to  a  wife  for  the  protection  of  her  homestead  or  her  dower 
interest,  although  her  husband  may  be  estopped  by  his  acts 
from  pleading  it  as  a  defence.*  Jt  may  also  be  set  up  by  the 
heirs  or  devisees  of  the  mortgagor;  by  a  judgment  creditor  ;' 
by  a  person  holding  a  subsequent  mechanic's  lien  upon  tha 
premises  ;'  by  an  assignee  of  the  mortgagor's  property  foi 


14  N.  J.  Eq.  (1  McCart.)  56  (1861) ; 
Cotheal  v.  Blydenburgh,  5  N.  J.  Eq. 
(1  Halst.)  17  (1845). 

'  Brooks  V.  Avery,  4  N.  Y,  225 
(1850) ;  Carow  v.  Kelly,  59  Barb. 
(N.  Y.)  239  (1871) ;  Maher  v.  Lan- 
from,  86  111.  513  (1877) ;  Westerfield 
V.  Bried,  26  N.  J.  Eq.  (11  C.  E.  Gr.) 
357  (1857);  Brolasky  v.  MDler,  9 
N.  J.  Eq.  (1  Stockt.)  807  (1852) ;  s. 
c.  8  N.  J.  Eq.  (4  Halst.)  789  (1852) ; 
Greene  v.  Tyler,  39  Pa.  St.  361 
(1861). 

«  Ohio  &  M.  R.  R.  Co.  v.  Kasson, 
37  N.  Y.  218  (1867) ;  Williams  v. 
Birch,  2  Trans.  App.  (N.  Y.)  133 
(1867);  8.  c.  sub  nom.  Williams  v. 
Tilt,  36  N.  Y.  319  ;  Stoney  v.  Amer- 
ican Life  Ins.  Co.,  11  Paige  Ch. 
(N.  Y.)  635  (1845),  rev'g  4Edw.  Ch. 
(N.  Y.)  332  (1843) ;  Brolasky  v.  Mil- 
ler, 9  N.  J.  Eq.  (1  Stockt.)  814  (1852). 

'  See  Brooks  v.  Avery,  4  N.  Y. 
225  (1850) ;  Post  v.  Dart,  8  Paige 


Ch.  (N.  Y.)  640  (1841);  Banks  v. 
McClellan,  24  Md.  62  (1865) ;  Mc- 
Alister  v.  Jerman,  32  Miss.  143 
(1856);  Gunnison  v.  Gregg,  20  N. 
H;  100  (1849) ;  Cummins  v.  Wire,  6 
N.  J.  Eq.  (2  Halst.)  73  (1846) ;  Union 
Bank  V.  Bell,  14  Ohio  St.  200(1862). 

<  Campbell  v.  Babcock,  27  Wis. 
512  (1871). 

*  Merchants'  Ex.  Bank  v.  Commer- 
cial Warehouse  Co.,  49  N.Y.  636,  643 
(1872),  note;  Mason  v.  Xord,  40  N.Y. 
476  (1869) ;  Thompson  v.  VanVech 
ten,  27  N.  Y.  568,  585  (1863) ;  Carow 
V.  Kelly,  59  Barb.  (N.  Y.)  239 
(1871);  Jackson  v.  Tuttle,  9  Cow. 
(N.  Y.)  233  (1828);  Schroeppel  v. 
Corning,  5  Den.  (N.  Y.)  236  (1848) ; 
Dix  V.  VanWyck,  2  HiU  (N.  Y.) 
622  (1842) ;  Knickerbocker  Life  Ins. 
Co.  V.  Hill,  6  T.  «fe.  C.  (N.  Y.)  285 
(1875) ;  B.  c.  8  Hun  (N.  Y.)  577 ; 
Post  V.  Dart,  8  Paige  Ch.  (N.  Y.) 
639  (1841). 


'd-m.^        WHO    ]MAY   MAKE   DEFENCE    OF    USUEY.  415 


the  benefit  of  his  creditors  ;'  by  creditors  for  whose  benefit  the 
land  has  been  conveyed  in  trust,  where  the  trustee  has 
neglected  to  set  up  such  defence  ;'  by  subsequent  incum- 
brancers,* or  by  a  purchaser  from  the  mortgagor/ 

But  where  the  purchaser  of  the  equity  of  redemption, 
covered  by  an  usurious  mortgage,  takes  the  land  subject  to 
the  lien  of  the  mortgage,  he  can  not  plead  usury  as  a  defence 
to  the  foreclosure  of  such  mortgage."  And  this  is  particu- 
larly true  where  he  assumes  and  agrees  to  pay  the  mortgage 
debt.*  There  is  also  a  line  of  cases  holding  that  the  defence 
of  usury  is  a  personal  privilege  of  the  debtor,  and  that  where 
he  himself  is  willing  to  abide  by  the  terms  of  his  contract, 
no  one  can  interfere  and  plead  it  as  a  defence/ 


•  Knickerbocker  Life  Ins.  Co.  v. 
Hill,  6  T.  «fe  C.  (N.  Y.)  285  (1875) ; 
s.  C.  3  Hun  (N.  Y.)  577. 

'  Pearsall  v.  Kingsland,  3  Edw. 
Ch.  (N.  Y.)  195  (1838). 

"  Union  Bank  of  Masillon  v.  Bell, 
14  Ohio  St.  200  (1863).  Contra, 
Sands  v.  Church,  6  N.  Y.  847  (1852). 

«  Mutual  Life  Ins.  Co.  v.  Bowen, 
47  Barb.  (N.  Y.)  618  (1866) ;  Brooke 
V.  Morris,  2  Cin.  (O.)  Supr.  Ct.  Rep. 
528  (1873). 

4  Brooks  V.  Avery,  4  N.  Y.  225 
(1850).  See  Bullard  v.  Raynor,  30 
N.  Y.  197  (1864);  Matthews  v.  Coe, 
.56  Barb.  (N.  Y.)  430(1870) ;  Shufelt 
V.  Shufelt,  9  Paige  Ch.  (N.  Y.)  137 
(1841) ;  8.  c.  37  Am.  Dec.  381  ;  Post 
V.  Dart,  8  Paige  Ch.  (N.  Y.)  639 
(1841). 

»  Hartley  v.  Harrison,  24  N.  Y. 
170  (1861)  ;  Sands  v.  Church,  6  N. 
Y.  347  (1852) ;  Morris  v.  Floyd,  5 
Barb.  (N.  Y.)  130  (1849) ;  Vroom  v. 
Ditmas,  4  Paige  Ch.  (K  Y.)  527 
(1834) ;  Dolman  v.  Cook,  14  N.  J. 
Eq.  (1  McCart.)  56,  61  (1861) ;  Bro- 
lasky  V.  Miller,  9  N.  J.  Eq.  (1 
Stockt.)  814  (1852). 

•  Parkinson  v.  Sherman,  74  N.  Y. 
88  (1878) ;  8.  o.  80  Am.  Rep.  268 ; 


Sands  v.  Church,  6  N.  Y.  347(1852); 
Burlington  Mut.  Assoc,  v.  Heider, 
55  Iowa,  424  (1880);  Hough  v. 
Horsey,  36  Md.  181  (1872) ;  s.  c.  11 
Am.  Rep.  484  ;  Conover  v.  Hobart, 
24  N.  J.  Eq.  ( 9  a  E.  Gr. )  120 
(1873) ;  Cramer  v.  Lepper,  26  Ohio 
St.  59  (1875)  ;  s.  c.  20  Am.  Rep.  756. 
'  See  McGuire  v.  VanPelt,  55  Ala. 
344  (1876);  Fielder  v.  Varner,  45 
Ala.  429  (1871) ;  Cain  v.  Gimon,  36 
Ala.  168  (1860) ;  Fenno  v.  Sayre,  3 
Ala.  458  (1842);  Loomis  v.  Eaton, 
32  Conn.  550  (1865)  ;  Adams  v. 
Robertson,  37  LI.  45  (1865) ;  Studa- 
baker  v.  Marquardt,  55  Ind.  341 
(1876);  Carmichael  v.  Bodfish,  32 
Iowa,  418  (1871) ;  Huston  v.  String- 
ham,  21  Iowa,  36  (1866) ;  Powell  v. 
Hunt,  11  Iowa,  430  (1860);  Prit- 
chett  V.  Mitchell,  17  Kan.  355(1876); 
s.  c.  22  Am.  Rep.  287  ;  Campbell  v. 
Johnson,  4  Dana  (Ky.)  178  (1836) ; 
Green  v.  Kemp,  13  Mass.  515  (1816); 
8.  c.  7  Am.  Dec.  169 ;  Farmers'  & 
Mechanics'  Bank  v.  Kimmel,  1  Mich. 
84  (1848) ;  Ransom  v.  Hays,  39  Mo. 
445  (1867) ;  Miners'  Trust  Bank  v. 
Roseberry,  81  Pa.  St.  309  (1876); 
Lamoille  County  Bank  v.  Bingham, 
50  Vt.  105  (1877) ;  s.  c.  28Am.Itep. 


416         DEFENCE  AGAINST  ASSIGNEE  OF  MORTGAGE.    [§347. 

§  347.  Defences  against  assignee  of  mortgage.  —  In 
those  states  where  the  transfer  of  a  note  carries  with  it  the 
security  collateral  thereto,  in  an  action  by  an  assignee  to 
foreclose  the  mortgage  securing  a  note  transferred  to  him, 
the  defendant  can  not  set  up  as  a  defence  the  want  of  a  formal 
assignment  of  the  mortgage,*  nor  a  denial  of  knowledge  of 
the  assignment,"  nor  the  fact  that  the  note  secured  was  pur- 
chased at  a  discount,'  nor  that  the  plaintiff  purchased  the 
note  from  motives  of  malice,  nor  that  the  assignor  and  his 
assignee  acted  in  concert  with  a  view  unnecessarily  to  harass 
and  oppress  the  mortgagor,  or  with  the  intention  of  prevent- 
ing his  paying  the  note,  so  that  the  equity  of  redemption  might 
be  foreclosed  and  that  they  might  become  the  purchasers  of 
the  mortgaged  premises  for  a  sum  less  than  their  value  ;*  nor 
that  he  has  been  evicted  from  the  premises,  where  the  mort- 
gage sought  to  be  foreclosed  was  given  for  part  of  the  pur- 
chase price ;"  nor  defects  in  the  title  to  the  land  conveyed 
and  damages  awarded  against  him  therefor  ;*  nor  merger,^ 
it  being  sufficient  to  sustain  the  action,  that  the  mortgage 
debt  is  due  and  that  it  has  been  transferred  to,  and  is  owned 
by,  the  plaintiff/  But,  in  an  action  by  the  assignee  of  a  note 
and  mortgage  for  foreclosure,  the  defendant  may  show  a 
mistake  in  drawing  the  instrument  and  have  it  reformed  ;* 


490 ;   Austin  v,  Chittenden,  33  Vt.  *  Grissler  v.  Powers,  53  How.  (N. 

553  (1861) ;  Ready  v.  Huebner,  46  Y.)  Pr.  194  (1877) ;  Knox  v.  Galli- 

Wis.  692  (1879) ;  s.  c.  33  Am.  Rep.  gan,  31  Wis.  470  (1867) ;   Croft  v. 

749  ;  DeWolf  v.  Johnson,  33  U.  S.  Bunster,  9  Wis.  503  (1859). 

(10  Wheat.)  867  (1835) ;  bk.  6  L.  ed.  *  Morris  v.  Tuthill,  73  N.  T.  575 

343.  (1878). 

'  Jackson  v.  Blodget,  5  Cow.  (N.  b  National  Fire  Ins.  Co.  v.  McKay, 

T.)  303,    305    (1835) ;    Jackson   v.  31  n.  Y.   191    (1860).    See  Hill  v. 

WUlard,  4  Johns.  (N.  Y.)  41,   43  Butler,  6  Ohio  St.  307  (1856). 

(1809) ;  Rice  v.  Cribb,  12  Wis.'  179  » Hill  v.  Butler,   6  Ohio   St.  207 

(I860).  (1856). 

*  Brown  v.  Woodbury,  5  Ind.  254  n  See    Reed   v.   Latson,  15  Barb. 

(1854).     The  oath  of  affirmation  or  (]jq"^  y.)  9  (1853). 

denial  of  an  assignment  under  the  «  Morris  v.  TuthiU,  72  N.  Y.  575 

Indiana    Rev.    Stat,    of    1843   was  (1878). 

required  to  be  to  the  effect  that  the  »  Andrews  v.  Gillespie,  47  N.  Y. 

party  had  reason  to  believe  and  did  437  (1872). 
believe  that  no  assignment  had  been 
made.    Brown  v.  Woodbury,  supra. 


§  3i7.]  DEFENCE  AGAINST  ASSIGNEE  OF  MOKTGAGE.  417 

or  that  the  assignee  could  not  make  a  valid  assign- 
ment.* 

In  an  action  for  the  foreclosure  of  a  mortgage  by  the 
assignee  thereof,  the  defendant  may  allege  in  his  answer 
that  the  mortgage  was  assigned  without  authority  of  law,* 
or  that  it  was  assigned  to  procure  the  performance  of  an 
agreement  void  for  illegality.'  And  where  a  mortgagor  has 
made  bona  fide  payments  to  an  indorsee  upon  a  note  secured 
by  a  mortgage,  without  notice  that  the  indorsee's  title  is 
invalid,  such  payments  will  be  valid  as  against  the  rightful 
owner  of  the  mortgage  debt.* 

The  fact  that  a  complainant,  after  having  commenced  an 
action  to  foreclose  a  mortgage,  borrowed  money  of  a  third 
person  on  such  mortgage,  with  the  understanding  that  the 
plaintiff  was  to  continue  the  prosecution  of  the  suit,  and,  in 
the  event  of  success,  to  repay  the  money  so  borrowed  with 
interest,  can  not  be  set  up  as  a  defence  to  the  foreclosure.* 

But  an  answer  is  insufficient  which  alleges  that  the  assignee 
took  his  assignment  of  the  mortgage  from  motives  of  malice, 
and  solely  for  the  purpose  of  bringing  a  foreclosure,  and  that 
the  assignor  transferred  the  mortgage  with  a  like  motive  and 
without  consideration.* 

It  has  been  said  that  any  defendant  to  a  mortgage  fore- 
closure suit,  who  is  personally  liable  for  the  debt,  or  whose 
land  is  affected  by  the  lien  of  the  mortgage,  may  introduce 
a  set-off  to  reduce  or  extinguish  the  plaintiff's  claim,  and 
may  show  that  the  plaintiff  has  taken  only  a  colorable  or  a 


»  Kenaud  v.  Conselyea,  7  Abb.  (N.  Y.  19  (1849)  ;  s.  c.  51  Am.  Dec.  333; 

T.)    Pr.    105    (1858),    reconsidering  Green  v.  Seymour,  3  Sandf.  Ch.  (N. 

and  reversing  s.  c.  5  Abb.  (N.  Y.)  Y.)  285  (1846);  Adams  v.  Rowan.  16 

Pr.  346  ;  4  Abb.  (N".  Y.)  Pr.  280.  Miss.   (8  Smed.    &  M.)  624  (1847). 

2  Leavitt  v.  Palmer,  3  K  Y.  19  See  Wyeth  v.  Braniff,  84  N.  Y.  627, 

(1849);    8.    c.   51    Am.    Dec.    333;  633    (1881);    Fish    v.    DeWolf,    4 

Jolinson  V.  Bush,  3  Barb.  Ch.  (N.  Bosw.  (K  Y.)  573  (1859). 

Y.)  207  (1848) ;  N.  Y.  Trust  &  Loan  •*  Vanarsdall  v.  State,  65  Ind.  176 

Co.  V.  Helmer,  12  Hun  (N.  Y  ^  35,  (1879). 

44   (1877);    Green  v.  Seymour,   3  "Chase  v.  Brown,   32  Mich.  235 

Sandf.  Ch.  (N.  Y.)  285  (1846).  (1875). 

»  Dewitt  V.   Brisbane,   16  N.   Y.  « Morris  v.  Tuthill,  72  N.  Y.  575 

608  (1858) ;  Talmage  v.  Pell,  7  N.  Y.  (1878) ;  Davis  v.  Flagg,  35  N.  J.  Eq. 

828  (1852) ;  Leavitt  v.  Palmer,  8  N.  (8  Stew.)  491  (1883). 

(27) 


418  DEFElSrCES  AGAITv'ST  ASSIGNEE.    [§§348-349. 

fraudulent  assignment  of  the  mortgage  and  holds  it  for  the 
benefit  of  one  against  whom  such  a  right  of  set-off  exists.* 

§  348.  Defence  against  voluntary  assignee  in  bank- 
ruptcy.— The  assignee  of  an  insolvent  mortgagee  for  the 
benefit  of  creditors,  is  not  entitled  to  the  same  favor  in  equity 
that  is  accorded  to  the  purchaser  of  a  mortgage  for  a  valuable 
consideration.  He  is  not  a  bona  fide  holder  nor  a  purchaser 
for  value,  but  takes  the  property  simply  as  a  trustee,  subject 
to  all  equities  which  may  exist  between  the  debtor  and  his 
creditors.  He  is  in  no  sense  a  purchaser,  because  the  assign- 
ment is  simply  an  appropriation  by  the  debtor  of  his  property, 
in  trust  for  the  payment  of  his  debts  in  the  order  and  manner 
specified  ;  an  act  by  which  he  divests  himself  of  such  property 
for  the  time  being,  without  altering  or  parting  with  his 
interest  in  it,  for  should  any  property  or  its  proceeds  remain 
after  the  trust  has  been  executed,  it  must  be  returned  to 
the  assignor.  For  these  reasons  a  voluntary  assignee  in  bank- 
ruptcy is  in  no  better  position,  and  acquires  no  better  title, 
than  his  assignor  held.* 

Where  a  debtor  executed  a  mortgage  and  before  its 
maturity  made  a  valid  assignment  of  all  his  property  for  the 
benefit  of  his  creditors,  in  an  action  to  foreclose  such  mortgage, 
the  assignee  alone  can  attack  its  validity,  if  none  of  the  cred- 
itors had  a  specific  lien  upon  the  property  by  judgment  prior 
to  the  execution  of  the  assignment.  The  creditors  of  the 
mortgagor  are  not  necessary  parties  to  the  action,  and  the  fact 
that  they  are  made  parties  will  not  entitle  them  to  interpose 
a  defence.' 

§  349,     Defence    against   a  fraudulent    assignment. — 

Fraud  voids  all  contracts  and  transfers  into  which  it  enters, 
at  the  election  of  the  party  defrauded  ;  ex  dolo  malo  non  oritur 


'  Lathrop  v.  Godfrey,  3  Hun  (N.  2     Barb.    ( N.    T, )    475    ( 1848 ) ; 

T.)  739  (1875).  In  re  Howe,  1  Paige  Ch.  (K  T.)  125 

*  Schieffelin  v.  Hawkins,  1  Daly  (1828) ;  a  c.  19  Am.  Dec.  395  ;  Mead 

(N.  Y.)  289  (1863) ;  s.  c.  14  Abb.  (N.  v.  Phillips,  1  Sandf.  Ch.  (N.  Y.)  83 

T.)Pr.  112.   See  VanHeuson  V.  Rad-  (1843). 

cliff,  17  N.Y.  580(1858);  S.C.  72  Am.  »  Sprmg  v.   Short,   90  KY.  538 

Dec.  480;  Warren  v.  Fenn,  28  Barb,  (1882).     See   Geery  v,  Geery,    63  N. 

(N.Y.)  333  (1858);  Legerv.  Bonnaffe,  Y.  252  (1876). 


§  850.]  DEFEIfCES  AGAINST  ASSIGIOIE  OF  MOETGAGE.         419 

actio  is  a  maxim  of  very  wide,  if  not  universal,  application. 
It  applys  even  to  the  holder  of  commercial  paper,  and  more 
strongly  to  assignees  of  choses  in  action.'  Thus,  where  a 
party  obtains  an  assignment  of  a  bond  and  mortgage  by 
means  of  fraud  and  with  the  ostensible  purpose  of  selling  the 
same  for  the  owner,  the  equitable  ownership  thereof  still 
remains  in  the  assignor,  and  in  an  action  brought  by  the 
assignee  for  foreclosure,  the  defendant  may  show  payment 
to  the  mortgagee."  And  where  a  mortgage  is  assigned 
immediately  before  the  right  of  redemption  would  expire,  for 
the  purpose  of  preventing  the  redemption,  it  will  have  the 
effect  of  keeping  the  equity  open  until  a  tender  can  be 
made,' 

§  350.  Defence  against  transferred  mortgage  payable  to 
mortgagee  alone.— A  mortgage,  like  a  note  which  is  pay- 
able to  the  payee  alone,  is  not  negotiable,  and  is  always  sub- 
ject  to  all  equities  existing  between  the  original  parties.* 
And  where  a  mortgage,  which  was  the  only  evidence  of  the 
indebtedness  secured,  was  by  its  terms,  "to  be  paid  by  the 
mortgagor  to  the  mortgagee  when  called  on  by  said  mortgagee, 
and  the  mortgagor  does  not  agree  to  pay  the  above  sur^  to 
anyone  else  except  the  said  mortgagee,"  on  suit  brought  by 
the  administrator  of  the  deceased  mortgagee,  it  not  appearing 
that  the  mortgagee  had  in  his  life-time,  either  personally  or 
by  agent,  made  a  demand  upon  the  mortgagor  for  payment 
of  the  sum  secured,  the  court  held,  that  an  action  to  foreclose 
the  mortgage  could  not  be  maintained  by  such  administrator ; 
that  on  the  death  of  such  mortgagee,  without  having 
demanded  payment  of  such  debt  of  the  mortgagor,  the  con- 
sideration  for  the  debt  became  a  gift  to  the  mortgagor ;  and 


'  Hall  V.  Erwin.  60  Barb.  (N.  Y.)  ards  v.  Waring,  1-Keyes  (N  Y  )  576 

349  (1871) ;  8.  c.  57  N.  Y.  643.  (1864) ;  James  v.  Morey  2  Cow  (N 

«  HaU  V.    Erwin,   66  N.  Y.   649  Y.)  246 (1823) ;  s.  c.  14  Am.  Dec.  475'- 

^'^'^^)-  Clute  V.  Robinson,  2  Johns.  (N   Y  > 

^  Deming  v.  Comings,  11  K  H.  595  (1807) ;  Livingstone  v.  Dean,  a 

474(1841).  Johns.     Ch.    (N.   Y.)   479    (1817)  > 

*  iDgrahara  v.  Disborough,  47  N.  Murray  v.  Lylburn,  2  Johns    ClJ 

Y.   421,  423  (1872).     See  Bush   v.  (N.  Y.)  441  (1817). 
Lathrop,  22  N.  Y.  535  (1860) ;  Rich- 


420         NEGOTIABLE  PAPER  SECURED  BY  MORTGxVGE.  [§  351. 

that  a  demand  by  the  administrator  would  not  be  suffi- 
cient,' 

§  351.  Defences  against  foreclosure  by  bona  fide  pur- 
chaser of  negotiable  paper  secured  by  mortgage. — The 

assignee,  before  maturity,  of  a  negotiable  promissory  note 
secured  by  mortgage,  takes  it  free  from  all  equities  which 
existed  between  the  original  parties  thereto  ;'  but  he  takes  it 
subject  to  such,  equities  as  appear  from  stipulations  or  recitals 
contained  in  any  recorded  instrument  which  forms  a  link 
in  his  chain  of  title.'  In  a  case,  however,  where  a  mortgage, 
purporting  to  secure  a  promissory  note  of  the  mortgagor,  was 
executed  to  a  party  who  knew  that  it  was  without  considera- 
tion, and  that  no  note  was  ever  delivered,  it  was  held  that 
an  assignee  of  the  mortgage  took  it  subject  to  all  equities 
existing  between  the  original  parties  and  that  it  could  not 
be  enforced.* 

The  assignee  of  a  rnortgage,  securing  a  negotiable  promis- 
sory note,  who  takes  jt  in  good  faith  before  maturity  for 
value,  takes  it  as  he  does,the  note  free  from  equities  between 


»  Sebrell  v.  Couch.  55  Ind.  129, 124  (1877) ;  Jones  v.  Smith,  22  ]Mich.  360 

(1876).     The  court  said :     "  The  de-  (1871);    Bloomer    v.   Henderson,   8 

maud  was  not  only  tc  be  made,  but  Mich.  395  (1860) ;  s.  c.  77  Am.  Dec. 

it  was  to  be  made  by  the  mortgagee  453  ;  Cicotte  v.  Gaguier,  2  Mich.  381 

himself  ;  implying,   when  taken  in  (1852) ;  Reeves  v.  Scully,  Walk.  Ch. 

connection  with  what  follows  in  the  (Mich.)  248  (1843) ;  Logan  v.  Smith, 

mortgage,  that,  if  he  did  not  choose  62  Mo,  455  (1876),  overruling  Lin- 

to  make  it,  the  debt  was  not  to  be  ville  v.  Savage,  58  Mo.  248  (1874); 

paid  at  all."  Sawyer  v.  Prickett,  86  U.   S.   (19 

«  Gould  V.  Marsh,  4  T.  &  C.  (N.  Y.)  Wall.)  146,  166  (1872) ;  bk.  22  L.  ed. 

128  (1874) ;  a  c.  1  Hun  (N.  Y.)  566 ;  80  ;    Kenicott    v.     Supervisors    of 

Updegraft  v.  Edwards.  45  Iowa,  513  Wayne  County,  83  U.  S.  (16  Wall.) 

(1877);  Farmers'National  Bank  of  Sa-  453(1872);  bk.  21  L.  ed.  319;  Car- 

!em  V.  Fletcher,  44  Iowa,  252  (1876);  penter  v.  Longan,  83  U.  S.  (16  Wall.) 

Preston  v.    Morrig,   42   Iowa,    549  271  (1872) ;  bk.  21  L.  ed.  313;  Beals 

(1876) ;    Duncan    v.   Louisville,    13  v.  Neddo,  1  McCr.  C.  C.  206  (1880). 

Bush  (Ky.)  378  (1877) ;  s.  c.  26  Am.  See  Trustees  of  Union  College  v. 

Rep.  201 ;  Billgerry  v.  Ferguson,  30  Wheeler,  61  N.  Y.  88,  107  (1874). 

La.  An.  84  (1878);  Pierce  v.  Faunce,  »  Orrick  v.  Durham,  79  Mo.  175 

47  Me.  507  (1859) ;  Sprague  v.  Gra-  (1883). 

ham,  29  Me.  160  (1848) ;  Taylor  v.  *  Burbank  v.  Waiwlck,  53  Iowa, 

Vage,  88  Mass.  (6  Allen),  86  (1863) ;  493  (1879). 
Helmer  v.    Krolick,   36    Mich.  371 


§  351.]  NEGOTIABLE  PAPER  SECURED  BY  MORTGAGE.         421 

the  original  parties  ;'  but  it  will  be  otherwise,  where  the  mort- 
gage is  taken  after  maturity  and  without  inquiry,  although 
in  good  faith  and  for  full  value.'  And  where  a  note,  and  a 
mortgage  given  to  secure  it,  are  transferred  before  maturity 
to  a  bona  fide  purchaser,  the  mortgagor,  although  having  no 
notice  whatever  of  such  assignment  and  transfer,  can  not 
thereafter  pay  the  note  or  mortgage  to  the  mortgagee  so  as 
to  defeat  the  real  owner  and  holder  thereof  from  recover- 
ing.' It  seems  that  a  purchaser  in  good  faith  and  for  value 
from  the  one  of  a  number  of  contemporaneous  mortgagees, 
who  first  recorded  his  mortgage,  will  take  the  same  free 
from  a  parol  agreement  between  the  mortgagees  of  which  he 
was  ignorant,  that  the  mortgages  should  be  equal  liens.*  But 
the  rule  that  the  assignee  of  a  rriortgage  before  maturity, 
takes  it  free  from  the  equities  existing  between  the  original 
parties  to  the  instrument,  applies  only  to  such  mortgages  as 
are  collateral  to  and  secure  nesotiable  instruments.' 


'  Mundy  v.  Whittemore,  15  Neb. 
647  (1884).  See  Burhan«  v.  Hutche- 
son,  25  Kan.  625  (1881);  8.  c.  37 
Am.  Rep.  274. 

2  Osborn  v.  McClelland,  43  Ohio 
St.  284  (1885).  In  this  case  O.,  for 
value  received,  made  and  delivered 
to  F.  her  negotiable  note,  secured 
by  mortgage,  payable  to  the  order  of 
F.  in  five  j'ears.  Two  years  before 
the  same  became  due  F., without  con- 
sideration, and  solely  for  the  accom- 
modation of  B.  &  S.,  bankers,  loaned  ' 
the  same  temporarily  to  them,  to 
enable  them  to  use  the  same  as  col- 
lateral for  a  loan  to  meet  a  present 
emergency,  B.  &  S.  promising  to 
keep  and  return  them  safely.  B.  & 
S.  did  not  use  them,  but  they  were 
suffered  to  remain  in  their  custody 
until  after  the  note  became  due, 
when  S.,  survivor  of  B.  &  S.,  with- 
out the  knowledge  of  F.,  or  without 
authority  from  her,  hypothecated 
them  to  M.  by  deliverj',  merely  say- 
ing the  note  would  be    paid.     M. 


took  the  same  in  good  faith,  and  for 
full  value,  without  inquiry,  guar- 
anty, or  indorsement  by  S. ,  relying 
solely  on  his  possession  and  the 
blank  indorsement  of  F.,  that  S.  was 
the  owner.  It  was  held  that  M. ,  hav- 
ing received  the  note  after  maturity 
and  without  inquiry,  acquired  no  bet- 
ter title  than  S.  had,  and,  as  S.  had 
neither  title  nor  interest,  which  was 
good  against  F.,  he  could  not  transfer 
a  title  to  M.  which  would  give  him 
the  right  to  foreclose  the  mortgage 
as  against  the  real  owner. 

*  Burhans  v.  Hutch  eson,  25  Kan, 
625  (1881);  s.  c.  37  Am.  Rep. 
274. 

*  Decker  v.  Boice,  19  Hun  (N.  T.) 
152  (1879). 

"  Crane  v.  Turner,  67  N.  Y.  437 
(1876) ;  Trustees  of  Union  College  v. 
Wheeler,  61  N.  Y.  88,  107  (1874) ; 
Ingraham  v.  Disborough,  47  N.  Y. 
421  (1872) ;  Rice  v.  Dewey,  54  Barb. 
(N.  Y.)  455  (1862) ;  Hartley  v.  Tat- 
bam,  10  Bosw.  (N.  Y.)  273  (1863) ; 


422         NEGOTIABLE  PAPEli  SECURED  BY  MORTGAGE.  [§  352. 


In  an  action  to  foreclose  a  mortgage,  brought  by  an 
assignee  thereof,  where  a  defence  which  would  be  valid  as 
against  the  assignor  is  made,  the  plaintiff  will  be  required  to 
show  that  his  purchase  was  bona  fide  in  all  respects.*  The 
rule  in  this  regard  is  the  same  in  a  majority  of  the  states, 
whether  the  note  transferred  is,  or  is  not,  secured  by  a 
mortgage.' 

§  352.  Purchaser  of  negotiable  paper  secured  by  mort- 
gage takes  subject  to  equities  against  it. — On  the  other 
hand,  it  has  been  held  that  while  the  purchaser  of  a  negoti- 
able instrument  before  maturity,  without  notice,  will  be 
protected  against  all  defences  to  such  negotial^le  instrument, 
yet  that  when  the  negotiable  instrument  is  secured  by  a  mort- 
gage or  other  collateral  security,  such  security  will  not  for  that 
reason  be  invested  with  any  of  the  privileges  or  immunities 
belonging  to  negotiable  paper ;  and,  not  being  assignable  sepa- 
rately and  apart  from  the  debt,  either  at  common-law*  or  by  the 
law  merchant*  or  by  statute,*  the  mortgagor  may  successfully 


e.  c.  24  How.  (N.  Y.)  Pr.  505  ;  Nia- 
gara Bank  v.  Roosevelt,  9  Cow.  (N. 
Y.)  409  (1827) ;  s.  c.  Hopk.  Cli.  (N. 
Y.)  579  ;  James  v.  Morey,   3  Cow. 
(K  Y.)  246  (1823);  s.  c.  16  Am.  Dec. 
465  ;  Clute  v.   Robinson,  2  Johns. 
(N.  Y.)  595  (1807) ;  Ellis  v.  Messer- 
vie.  11  Paige  CIi.  (N.  Y.)  467  (1844); 
s.  c.  5  Den.  (N.  Y.)  640 ;  Pendleton 
V.   Fay,   2  Paige  Ch.  (N.  Y.)  202 
(1803);  Nichols    v.    Lee,    10    Mich. 
526  (1862) ;  Reeves  v.  Scully,  Walk. 
Ch.  (Mich.)  248  (1843) ;  Russell  v. 
Waite,  Walk.  Ch.  (Mich.)  31  (1842); 
Kamena  v.  Huelbig,  23   N.  J.  Eq. 
(8  C.  E.  Gr.)  75  (1872) ;  Andrews  v. 
Torrey,    14  N.  J.  Eq.  (1  McCait.) 
355  (1862) ;  Losey  v.  Simpson,  11  N. 
J.  Eq.  (3  Stockt.)  246  (1856) ;  Dunn 
V.  Seymour,  11  N.  J.  Eq.  (3  Stockt.) 
278  (1856)  ;  Cornish  v.  Bryan,  10  N. 
J.    Eq.     (3     Stockt.)     146     (1856)  ; 
Twitchell  v.  McMurtrie,  77  Pa.  St. 
383  (1875)  ;  Horstman  v.  Gerker,  49 
I'a.   St.   2S2,   289  (1865)  ;    Pryor  v. 


Wood,  31  Pa.  St.  143  (1858) ;  Mott 
V.  Clark,  9  Pa.  St.  399  (1848) ;  8.  O. 
49  Am.  Dec.  566 ;  Goulding  v,  Bun- 
ster,  9  Wis.  513  (1859);  Croft  v. 
Bunster,  9  Wis.  503  (1859). 

'  Getzlaff  V.  Seliger,  43  Wis.  297 
(1877).  See  Matterson  v.  Morris,  40 
Mich.  52  (1879). 

*  See  Carpenter  v.  Longan,  83  TJ. 
S.  (16  Wall.)  271 ;  bk.  21  L.  ed. 
313  (1872);  Bennett  v.  Taylor,  5 
Cal.  502  (1855) ;  Potts  v.  Blackwell, 
4  Jones  (N.  C.)  Eq.  58  (1858) ;  Mar- 
tineau  v.  McCoUum,  4  Chand.(Wis.) 
153  (1852). 

3  Medley  v.  Elliott,  62  111.  533 
(1872) ;  Sumner  v.  Waugh,  56  HI. 
531  (1869). 

*  In  re  Kansas  City  Marble  and 
Stone  Manufacturing  Co.,  9  Bankr. 
Reg.  76,83(1872);  Corbelt  v.  Wood- 
ward, 5  Sawy.  C.  C.  403  (1879). 

» Medley  v.  Elliott,  62  111.  533 
(1873);  Sumner  v.  Waugh,  56  HI. 
531  (1869). 


§  353.]  NEGOTIABLE  PAPEE  SEOUBED  BY  MORTGAGE.        423 

interpose  any  defence  in  an  action  brought  by  the  assignee  to 
foreclose  the  mortgage,  that  he  could  have  made  against  the 
mortgagee,*  even  though  the  assignee  may  have  purchased 
the  note  and  mortgage  in  good  faith  for  a  valuable  consider- 
ation  in  the  regular  course  of  business.'  This  doctrine  is  held 
in  Colorado,*  Illinois,*  Louisiana,'  Minnesota,'  New  Jersey,* 
Ohio'  and  Oregon,'  and  in  the  inferior  courts  of  the  United 
States." 

§  353.    Same  rule  in  Illinois.— It  has  been  held  in  Illinois 
that  the  same  doctrine  applies  to  a  trust  deed,  and  that  in 


J  White  V.  Sutherland,  64  HI.  181 
(1872);  Sumner  v.  Waugh,  56  111. 
531  (1869) ;  Walker  v.  Dement,  42 
m.  272  (1866);  Johnson  v.  Carpenter, 
7  Minn.  176  (1862). 

«  White  V,  Sutherland,  64  Dl.  181 
(1872)  ;  Olds  v.  Cummings,  31  111. 
188  (1868). 

» Longan  v.    Carpenter,   1    Colo. 
205  (1870).     This  case  was  reversed 
on  appeal  by  the  supreme  court  of 
the  United  States.     See  Carpenter  v. 
Longan,   83  U.  S.  (16  Wall.)  271  ; 
bk.    21    L.    ed.    313    (1872).     The 
supreme  court  hold  that  where  a 
mortgage  is  given  at  the  time  of  the 
execution  of  a  negotiable  note,  and 
to    secure    its   payment,    and    the 
mortgage  is   subsequently,  but  be- 
fore the  maturity  of  the  note,  trans- 
ferred bona  fide  with  the  note,  the 
holder  of  the  note,   when  obliged 
to  resort  to  the  mortgage,  will  be 
unaffected  by  any  equities  arising 
between  the  mortgagor  and  mort- 
gagee, subsequently/  to  the  transfer, 
and  of  which,  he,  the  assignee,  had 
no  notice  at  the  time  it  was  made. 

*  Ellis  V.  Sisson,  96  111.  105  (1880); 
United  States  Mortgage  Co.  v.  Gross, 
93  111.  483  (1879) ;  Chicago  D.  &  V. 
R.  Co.  V.  Lcewenthal,  93  111.  433 
(1879) ;  Colehour  v.  State  Savings 
Inst. ,  90  111.  152  (1878) ;  Brant  v.  Yix, 
83 111.11  (1876);  White  v.  Sutherland, 


64  ni.  181  (1872) ;  Medley  v.  Elliott, 
62111. 532  (1872) ;  Sumner  v.  Waugh, 
56  HI.  531  (1869) ;  Walker  v.  Dement 
42111.  272  (1866) ;  Olds  v.  Cummings, 
51  HI.  188,  192  (1863). 

*  Bouligny  v.  Frotier,  17  La.  An. 
121  (1865) ;  Schmidt  v.  Frey,  8  Eob. 
(La.)  435  (1844). 

6  Hostetter  v.  Alexander,  22  Minn. 
559  (1876) ;  Johnson  v.  Carpenter, 
7  Minn.  176  (1862). 

'  Woodruff  v.  Morristown  Institu- 
tion for  Savings,  34  N.  J.  Eq.  (7 
Stew.)  174  (1881) ;  Vredenburgh  v. 
Burnet,  31  N.  J.  Eq.  (4  Stew.)  229. 
231  (1879) ;  Putnam  v.  Clark,  29  N. 
J.  Eq.   (2  Stew.)  412,   415  (1878); 
Atwater  v.  Underbill,  22  N.  J.  Eq. 
(7C.  E.  Gr.)599,  606(1872);  Conover 
V.  VanMater,  18  N.  J.  Eq.  (3  C.  E. 
Gr.)  481,  484  (1867) ;  Woodruff  v. 
Depue,   14  N.   J.   Eq.    (1  McCart.) 
168,  175(1861);  Losey  v.  Simpson,  11 
N  J  Eq.  (3  Stockt.)  246,  254  (1856). 
« Baily  v.  Smith,  14  Ohio  St.  396 
(1863). 

»  Corbett  v.  Woodward,  5  Sawy. 
C.  C.  403  (1879). 

10  See  In  re  Kansas  City  Marble 
and  Stone  Manufacturing  Co.,  9 
Bankr.  Reg.  76,  82  (1872) ;  Fales  v. 
Mayberry,  2  Gall.  C.  C.  560  (1815) ; 
United  States  v.  Sturges,  1  Paine  0. 
C.  525,  534  (1826) ;  Corbett  v.  Wood- 
ward, 5  Sawy.  C.  C.  403  (1879). 


4 2  J:        NEGOTIABLE  PAPER  SECURED  BY  MORTGAGE.   [§354. 

an  action  for  its  foreclosure  by  an  assignee,  the  defendant 
may  interpose  any  equitable  defence  he  had  against  the 
mortgagee  arising  out  of  the  original  transaction ;  but  this 
rule  does  not  extend  to  the  set-off  of  a  debt  due  from 
the  assignor  to  the  defendant  arising  out  of  a  collateral 
transaction  or  a  subsequent  matter.'  The  principle  upon 
which  this  doctrine  is  founded,  is  that  while  the  notes 
are  made  negotiable  by  commercial  usage  or  by  statutory 
regulation,  there  is  no  such  usage  or  provision  as  to  the 
mortgages  securing  them,  and  that  for  this  reason  the  assignee 
of  the  mortgage  takes  it,  as  he  would  any  other  chose  in 
action,  subject  to  all  the  rights  which  existed  against  the 
mortgage  while  in  the  hands  of  the  mortgagee,  except  as  to 
the  latent  equities  of  third  persons,  whose  rights  he  could 
not  know.* 

§  354-  Defences  against  assignee  of  mortgage  secur- 
ing a  non-negotiable  instrument. — At  common-law,  a 
mortgage,  as  far  as  it  is  a  debt  or  merely  a  security  for 
a  debt,  is  simply  a  chose  in  action,  non-negotiable,  and 
therefore  can  not  be  transferred  by  delivery  or  indorse- 
ment. A  bond,  also,  is  a  non-negotiable  instrument,  and 
when  assigned  is  subject  to  the  equities  existing  between 
the  original  parties,'  and  subject  to  the  same  equities 
when  assigned  with  the  mortgage,  which  is  simply  collateral 


'  Colehour  v.  State  Savings  Insti-  over  v,  VanMater,  18  N.  J.  Eq.  (3 

tution,  90  111.  152  (1878).  C.  E.  Gr.)  482  (1867) ;  Andrews  v. 

«  Sumner  v.  Waugh,  56  111.  531  Torrey,   14  N.  J.  Eq.  (1   McCart.) 

(1869).    See  Fortier  v.  Darst,  31  111.  355  (1861) ;   Lee  v.  Kirkpatrick,  14 

212  (1863) ;    Olds  v.  Cummings,  31  N.   J.    Eq.  (1  McOart.)  264  (1861) ; 

111.    188,   192  (1863) ;    Woodruff  v.  Danbury  v.  Robinson,  14  N.  J.  Eq. 

Morrislown  Institution  for  Savings,  (1  McCart.)  213  (1861) ;  Woodruff  v. 

34  N.  J.  Eq.  (7  Stew.)  174  (1881) ;  Depue,  14  N.  J.  Eq.  (1  McCart.)  168, 

Vredeuburgh  v.    Burnet,  31  N.    J.  175  (1861) ;  Losey  v.    Simpson,    11 

Eq.  (4  Stew.)  229,  231  (1879) ;  Put-  N.  J.  Eq.  (3  Stockt.)  246,  254  (1856); 

nam  v.  Clark,  29  N.  J.  Eq.  (2  Stew.)  Jacques  v.  Elser,  4  N.  J.  Eq.  (3  H. 

412,   415    (1878);     DeWitt    v.   Van  W.    Gr.)    461    (1844);    Shannon  v. 

Sickle,  29  N.  J.  Eq.  (2  Stew.)  212  Marselis,    1  N.  J,   Eq.   (Saxt.)  413 

(1878);  Starr  v.  Haskins,  26  N.  J.  (1831). 

Eq.    (11     C.    E.    Gr.)    415    (1875);  ^  Ridjardson  v.  Woodruff,  20  Neb. 

Atwater  v.  Underbill,  22  N.  J.  Eq.  132  (18b6). 
(7  C.  E.  Gr.)  599,  606  (1872) ;  Con- 


§  354.] 


NON-NEGOTIABLE   PAPER   8ECUEED. 


425 


to  it.'  The  bond  being  a  mere  chose  in  action,  and  neither 
it  nor  the  mortgage  having  any  negotiable  character,  the 
mortgagor's  rights,  in  respect  to  the  obligation,  will  not  be 
changed  in  any  way  by  the  transfer  of  the  bond  and  mort- 
gage.' Where  a  non-negotiable  note  is  secured  by  mortgage, 
and  is  assigned,  it  will  be  subject  to  the  equities  existing 
between  the  original  parties  at  the  time  of  the  transfer,  the 
same  as  a  bond  or  other  chose  in  action.*  This  rule,  however, 
is  generally  understood  to  mean,  the  equity  residing  in  the 
original  obligor  or  debtor,  and  not  an  equity  residing  in  some 
third  person.* 

In  an  action  for  foreclosure  brought  by  the  assignee  of 
ji  bond  and  mortgage,  the  mortgagor  may  set  up  any  equi- 
table defence  he  would  have  had  in  a  suit  brought  by  the 
mortgagee,  on  the  well  established  principle  that  the  assignee 
of  a  chose  in  action  takes  it  subject  to  all  the  equities 
against  it  in  the  hands  of  the  assignor.*    A  mortgage  not 


'  Strong  V.  Jackson,  123  Mass.  60, 
6Z  (1877) ,  8.  c.  25  Am.  Rep.  19.  See 
Crane  v.  March,  21  Mass.  (4  Pick.) 
131  (1826) ;  s.  c.  16  Am.  Dec.  329. 

»  See  Davis  v.  Beckstein,  69  N.  Y. 
MO  (1877);  Moore  v.  Metropolitan 
National  Bank,  55  N.  T.  41  (1873) ; 
Ingraham  v.  Disborough,  47  N.  Y. 
421  (1872) ;  Mason  v.  Lord,  40  N.  Y. 
476  (1869) ;  Reeves  v.  Kimball,  40 
N.  Y.  299  (1869) ;  Bush  v.  Lathrop, 
22  K  Y.  535  (1860);  Mickles  v. 
Townsend,  18  N.  Y.  575  (1859); 
Westfall  v,  Jones,  23  Barb.  (N. 
Y.)  9  (1853);  Ely  v.  McNight, 
SO  How.  (N.  Y.)  Pr.  97  (1864); 
Hovey  v.  Hill,  3  Lans.  (N.  Y.)  167 
(1870);  Godeflfroy  v.  Caldwell,  2 
Cal.  489  (1853) ;  s.  c.  56  Am.  Dec. 
360 ;  Cumberland  Coal  &  Iron  Co. 
V.  Parish,  42  Md.  598  (1875) ;  Jones 
v.  Hardesty,  10  Gill  &  J.  (Md.)  404, 
420  (1839) ;  s.  c.  32  Am.  Dec.  180  ; 
Mathews  v.  Heyward,  2  S.  C.  239 
(1870). 

«  White  V.  Heylman,  34  Pa.  St. 


143  (1859) ;  Matthews  v.  Wallwyn, 
4  Ves.  118,  126  (1798). 

*  Woodruff  V.  Morristown  Inst,  for 
Savings,  34  N.  J.  Eq.  (7  Stew.)  174 
(1881).  See  Warner  v.  Blakeman,  36 
Barb.  (N.  Y)  501,  517  (1862); 
Thompson  v.  VanVechten,  6  Bosw. 
(N.  Y.)  373,  411  (1860);  James  v. 
Morey,  2  Cow.  (N.  Y.)  246,  249 
(1823);  s.  c.  16  Am.  Dec.  475; 
Livingstone  v.  Dean,  2  Johns.  Ch. 
(N.  Y.)  479  (1817) ;  Murray  v.  Lyl- 
burn,  2  Johns.  Ch.  (N.  Y.)  442  (1817); 
Mott  V.  Clark,  9  Pa.  St.  399  (1848). 

*  Murray  v.  Lylburn,  2  Johns. 
Ch.  (N.  Y.)  442  (1817);  CoveU  v. 
Tradesman's  Bank,  1  Paige  Ch.  (N. 
Y.)  131,  135  (1828).  See  Riggs  v. 
Purssell,  89  N.  Y.  608  (1882);  James 
V.  Morey,  2  Cow.  (N.  Y.)  246,  298 
(1823) ;  s.  c.  16  Am.  Dec.  475  ; 
Muir  V.  Schenck,  8  Hill  (N.  Y.)  230 
(1842);  s.  c.  38  Am.  Dec.  633; 
Young  V.  Guy,  23  Hun  (N.  Y.)  1 
(1881) ;  Hovey  v.  Hill,  3  Lans.  (N. 
Y.)167,  172  (1870);  Tabor  v.  Foy, 


426  DEFENCE  AGAINST  ASSIGNEE  OF  MORTGAGE.  [§355. 

being  transferable  at  law  by  delivery  or  indorsement,  the 
assignee  takes  it  subject  to  all  equities  between  the  parties; 
the  fact  that  he  takes  the  note  secured  by  the  mortgage  by 
assignment  before  maturity  free  from  all  defences  at  law,  does 
not  protect  the  mortgage  against  equitable  defences,'  for  while 
a  purchaser  in  good  faith  of  a  note  before  its  maturity,  which  is 
indorsed  in  blank,  acquires  the  legal  title,  and  may  enforce 
his  rights  in  a  court  of  law,  yet  if  the  note  is  secured  by  a 
mortgage  on  real  estate,  and  he  resorts  to  a  court  of  equity 
to  foreclose  the  mortgage,  that  court  will  let  in  any  defence 
which  would  have  been  good  against  the  mortgage  in  the 
hands  of  the  mortgagee." 

§  355-     Other  defences  against  such  an  assignee. — A 

mortgage  absolute  on  its  face,  assigned  by  the  mortgagee  to 
the  holder  as  collateral  security,  may  be  shown,  on  fore- 
closure, by  way  of  defence,  to  have  been  originally  given  as  a 
collateral  mortgage.*  And  while  the  assignee  of  a  mortgage 
takes  the  same  subject  to  all  equities  between  the  mortgagor 
and  the  mortgagee,  yet  he  does  not  take  it  subject  to  the 
equities  between  the  mortgagor  and  a  prior  assignee  of 
the  mortgage.*  The  reason  for  the  rule  is  said  to  be  found 
in  the  fact,  that  the  assignee  can  always  go  to  the  mortgage 
debtor  and  ascertain  what  off-sets  he  may  have  against  the 
mortgage  or  other  chose  in  action  which  he  is  about  to 
purchase  from  the  mortgagee  ;*   and  where  he  neglects  this 


56  Iowa,  539  (1881) ;  Woodruff  v.  C.   C.   164,   168  (1832) ;  Priddy  v. 

Morristown  Inst,  for  Savings,  34  N.  Rose,  3  Meriv.    86  (1817) ;  Coles  v. 

J.  Eq.  (7  Stew.)  171  (1881) ;  Earnest  Jones,    2  Vern.  692  (1715) ;  Hill  v. 

V.  Hoskins,  100  Pa.  St.  551  (1882) ;  Caillovel,    1  Ves.    Sr.    122    (1748) ; 

McMuUen  v.  Wenner,  16  Serg.  &  R.  Turton  v.  Benson,  1  P.  Wms.  496 

(Pa.)   18,   20  (1827) ;  s.  c.    16  Am.  (1718). 

Dec.    543 ;    Bury    v.    Hartman,    4  '  Tpwner  v.  McClelland,  110  III 

Serg.  &  R.  (Pa.)  175  (1818) ;  Foot  v.  542  (1884). 

Ketchum,  15  Vt.   258,  268    (1843) ;  ^  Towner  v.  McClelland,  110  HI. 

Norton  v.  Rose,  2  Wash.  (Va.)  298  542  (1884). 

(1796) ;  Pickett  v.   Morris,  2  Wash.  «  Dickerson  v.  Wenman,  35  N.  J. 

(Va.)  325  (1796) ;  Withers  v.  Greene,  Eq.  (8  Stew.)  368  (1882). 

50  U.  S.  (9  How.)  213,  224  (1850) ;  *  Reineman  v.  Robb,  98  Pa.  St. 

bk.  13  L.  ed.  109  ;  United  States  v,  474  (1881). 

Sturges,    1   Paine    C.    C.    525,   534  *  Westfall  v.  Jones,  23  Barb.  (N. 

(1826);  Bradley  v.  Trammel,  Hempst.  Y.)  9, 13  (1856) ;  Murray  v.  Lylburn, 


§  355.J  DEFENCE  AGAINST  ASSIGNEE  OF  MOETGAGE.         427 

precaution,  he  will  be  deemed  to  have  taken  the  securities 
upon  the  representations  of  the  assignor  alone  as  to  their 
legal  validity.* 

The  right  of  the  obligor  to  defend  against  his  bond  and 
mortgage,  or  non-negotiable  note  and  mortgage,  in  the 
hands  of  an  assignee,  is  limited  to  matters  affecting  the  exis- 
tence of  the  debt,  to  ofT-sets  against  it,  and  to  a  want  of 
consideration.  A  secret  equity  can  not  be  pleaded  by  the 
mortgagor  against  an  assignee  of  the  bond  and  mortgage; 
neither  can  an  agreement  with  the  obligee  merely  collateral 
to  or  inconsistent  with  the  import  or  legal  effect  of  the 
instrument.' 

In  Pennsylvania,  a  bond  is  used  almost  exclusively  in 
connection  with  the  mortgage ;  and,  although  the  mortgage 
may  be  assigned  so  as  to  enable  the  assignee  to  sue  in  his 
own  name,  yet  it  will  be  subject  to  the  same  equities  and 
rules  that  govern  other  non-negotiable  instruments  or  claims.* 
The  same  is  true  in  New  York* 


3  Johns.  Ch.  (N.  T.)  441  (1817). 
See  Coming  v.  Murray,  3  Barb.  (N. 
y.)  652,  654  (1848) ;  Hovey  v.  Hill, 
8  Lans.  (N.  Y.)  167,  172  (1870); 
L'Amoreux  v.  Vandenburg,  7  Paige 
Ch.  (N.  Y.)  316  (1838) ;  B.  c.  32  Am. 
Dec.  635. 

»  Willis  T.  Twambly,  13  Mass.  204, 
206(1816). 

•  McMastera  v.  Wilhelm,  85  Pa. 
St.   218  (1877) ;   Commonwealth  v. 


Pittsburgh,  34  Pa.  St.  496,  520(1859); 
Pryor  v.  Wood,  31  Pa.  St.  142  (1858); 
Davis  V.  Barr,  9  Serg.  &  R.  (Pa.)  137, 
141  (1822). 

» Twitchell  v.  McMurtrie,  77  Pa. 
St.  383  (1875) ;  Horstman  v.  Gerker, 
49  Pa.  St.  282  (1865);  Pryor  v. 
Wood,  31  Pa.  St.  142  (1858), 

*  Trustees  of  Union  College  y. 
Wheeler,  61  N.  Y.  88  (1874). 


CHAPTER   XVIL 


ANSWERS    AND  DEFENCES. 


FRAUD,  MISREPRESENTATION,  MISTAKE  AND  DURESS. 


356.  Defence  of  fraud — Generally. 

357.  Defence  of  fraud  by  mort- 

gagor. 

358.  Remedies  on  purchase  money 

mortgage  in  case  of  fraud. 
859.  Remedies      by      mortgagor 
against  fraud. 

360.  Defence    of*  fraud    against 

purchase  money  mortgage. 

361.  False    representations    as    a 

defence. 
363.  Defence  of  false  representa- 
tions by  a  married  woman. 

363.  Defence  of  false  representa- 

tions   by    purchaser    who 
assumed  mortgage. 

364.  Misrepresentation  as  to  num- 

ber  of    acres  —  Purchase 
money  mortgage. 


§  365.  False  representations  as  to 
extent  and  boundaries  of 
land. 

366.  Mutual  mistake  of  parties  as 

a  defence. 

367.  Against  whom  mutual  mis- 

takes may  be  corrected. 

368.  Remedies   for   correcting   a 

mistake. 

369.  Mutual  mistake  as  to  title. 

370.  Mutual  mistake  as  to  quan- 

tity of  land. 

371.  Defence  of  undue  infiusnce. 

372.  Duress  as  a  defence. 

373.  Duress  under  Ohio  doctrine. 

374.  Mortgage  executed  by  mar- 

ried woman  under  duress. 

375.  Duress  o:^  person. 


§  356.  Defence  of  fraud — Generally. — It  is  a  general 
rule  that  fraud  vitiates  everything  it  touches ;  but  where 
fraud  enters  into  a  mortgage  contract,  it  will  not  necessarily 
render  the  mortgage  void,  unless  the  fraud  was  committed 
upon  the  mortgagor  by  the  mortgagee  or  his  agent,  or  with 
the  knowledge  and  assent  of  the  mortgagee  or  his  agent. 
There  may  be  fraud  without  a  deliberate  intention  to  mis- 
lead or  deceive  ;  it  may  consist  merely  in  the  denial  of  what 
has  been  previously  affirmed.*  It  has  been  said  that  in  an 
action  to  foreclose  a  mortgage  executed  by  a  married  woman 
upon  her  separate  estate,  she  may  set  up  as  a  defence,  that 
she  was  induced  to  execute  the  mortgage  by  reason  of  fraudu- 
lent representations  made  to  her  with  reference  to  the  nature 
of  the  consideration  thereof,  even  though  such  representations 


'  Ward  V.  Berkshire  Life  Ins.  Co.,  108  Ind.  301  (1886);  s.  c.  6  West.  Rep  596. 

428 


§  357.]  DEFENCE  OF  FRAUD.  429 

were  not  made  by  the  mortgagee  nor  with  his  knowledge 
and  consent.* 

Though  a  mortgage  may  be  made  with  the  intention  of 
defrauding  the  creditors  of  the  mortgagor,  it  will  not  neces- 
sarily be  void  as  between  the  parties  ;  and  in  an  action  for 
foreclosure,  where  the  mortgagee  can  show  a  prima  facie 
right  to  recover  on  the  face  of  the  instrument,  without 
revealing  the  fraud  in  the  transaction,  the  defendant  will 
not  be  permitted  to  plead  as  a  defence,  his  own  and  the  plain- 
tiff's fraudulent  intention,  and  that  the  mortgage  was  with- 
out consideration."  And  where  a  debtor  purchased  real  estate 
which  he  caused  to  be  conveyed  to  his  wife  in  fraud  of  his 
creditors,  it  was  held  that  a  bona  fide  mortgage  from  the 
husband  and  wife  would  not  be  affected  by  the  fraud.'  Pos- 
session of  the  premises  by  the  husband  and  wife  at  the  time 
of  the  execution  of  the  mortgage,  will  not  charge  the  mort- 
gagee with  notice  of  the  fraud  ;  neither  will  he  be  affected 
by  notice  of  levies  upon  the  property  as  that  of  the  husband, 
subsequent  to  the  conveyance  to  the  wife.*  But  where  a 
conveyance  was  made  with  the  intention  of  defrauding  credi- 
tors, such  fraudulent  intention  may  be  shown  by  the  parties 
whom  it  was  intended  to  defraud.* 

§  357.  Defence  of  fraud  by  mortgagor. — Fraud  can  be 
pleaded  in  answer  by  the  mortgagor  only  where  it  was  prac- 
ticed upon  him  by  the  mortgagee  or  his  agents,  or  with-  the 
mortgagee's  knowledge  ;*  and  where  a  mortgagor  has  been 


>  Cridge  v.  Hare,   98  Pa.  St.  561  <  Shorten  v.  Drake,  38  Ohio  St.  76 

(1881).  (1882). 

2  Bonesteel  v.  Sullivan,   104  Pa.  «  Gill  v.  Henry,   95  Pa.   St.   388 
St.  9  (1883) ;    Gill  v.  Henry,  95  Pa.  (1880). 

St.    888   (1880) ;   Bljstone    v.    Bly-  «  Reed  v.  Latson,  15  Barb.  (N.  T.) 

stone,  51  Pa.  St.   378  (1865)  ;  Wil-  9  (1858) ;  Aiken  v.  Morris,  2  Barb, 

liams  V.   Williams,  84  Pa.   St.  312  Ch.  (N.   Y.)  140  (1847) ;    Abbott  v. 

(1859);    Hendrickson  V.  Evans,   25  Allen,  2  Johns.  Ch.  (N.Y.)  519  (1817); 

Pa.  St.  441  (18')5) ;  Evans  v.  Dravo,  s.  c.  7  Am.  Dec.  554  ;  Champlin  v. 

24  Pa.  St.  63  (1854);  s.  c.  62  Am.  Laytin,  6  Paige  Ch.  (KY.)  189  (1836); 

Dec.  359  ;  Sheik  v.  Endress,  3  Watts  aff'd  18  Wend.  (N.  Y.)  407  ;  e.  c.  31 

«&  S.  (Pa.)  255  (1842).  Am.  Dec.  383  ;  Allen  v.  Shackleton, 

3  Shorten  v.  Drake,  38  Ohio  St.  76  15  Ohio  St.  145  (1864). 
(1882). 


430  •  DEFENCE   OF   FRAUD.  [§358. 

imposed  upon  by  intentional  misrepresentation  or  conceal- 
ment, he  may  have  redress  in  equity  for  damages  in  addition 
to  and  beyond  the  canceling  of  his  covenants.*  Where  a 
trusted  kinsman  and  friend,  as  an  agent  of  the  mortgagee^ 
is  employed  to  misrepresent  the  contents  of  a  mortgage^ 
•uhereby  its  execution  is  secured  without  its  being  read  to 
the  mortgagor,  it  is  a  fraud  against  which  relief  will  be 
promptly  granted.'  If  fraud  is  practiced  upon  a  mortgagor 
in  any  manner,  it  will  void  the  mortgage  and  an  action  in 
equity  to  set  it  aside  may  be  maintained,  although  the  plain- 
tiff may  be  in  possession  and  might  maintain  his  possession 
against  the  fraudulent  mortgagee  in  an  action  at  law.* 

To  constitute  a  good  defence  to  an  action  to  foreclose  a 
mortgage,  on  the  ground  of  fraud  in  obtaining  such  mort- 
gage, it  must  be  shown,  not  only  that  the  defendant  was 
defrauded,  but  also  that  he  was  defrauded  by  the  mortgagee 
or  his  agent,  or  at  least,  that  the  mortgagee,  at  the  time  of 
the  execution  and  delivery  of  the  mortgage,  was  aware  that 
a  fraud  was  being  committed  upon  the  mortgagor.  All  the 
facts  necessary  to  establish  the  fraud  and  to  bring  the  knowl- 
edge of  it  home  to  the  mortgagee,  must  be  distinctly  stated 
in  the  answer.* 

§  358.     Remedies  on  purchase  money  mortgage  in  case 

of  fraud. — It  is  a  well  established  doctrine  in  American 
courts  that  a  purchaser  of  land,  who  has  gone  into  posses- 
sion and  accepted  a  deed,  can  not  have  relief  in  equity 
against  the  payment  of  the  purchase  money,  except  in 
cases   of  fraud.     Unless   he   has  taken   the  precaution  to 


'  Belknap  v.  Sealey,  2  Duer  (N.  336  (1838) :  Allen  v.  Shackleton,  15- 

T.)  570  (1853) ;  aff'd  in  14  N.  Y.  143  Ohio  St.  145  (1864).     See  Wilcox  v. 

(1856) ;    s.   c.    67    Am.    Dec.    120  ;  Howell,  44  Barb.  (N.  Y.)  396  (1864); 

Abbott  V.  Allen,  2  Johns.  Ch.  (N,  Butler  v.  Viele,  44  Barb.  (N.  Y.) 

Y.)  519,  522  (1817) ;  s.  c.  7  Am.  Dec.  166  (1865);  Aiken  v.  Morris,  2  Barb. 

554  ;  Cornell  v.  Corbin,  64  Cal.  197  Ch.  (N.Y.)  140  (1847);  Hall  v.  Sands, 

(1883) ;  Pierce  v.  Tiersch,  40  Ohio  53  Me.  355  (1864) ;  Burns  v.  Hobbs, 

St.  168  (1883) ;  Edwards  v.  McLeay,  29  Me.  273  (1849) ;  Baily  v.  Smith,, 

1  Cooper  Eq.  308  (1815).  14  Ohio  St.  396  (1863). 

■'  Robinson  v.  Glass,  94  Ind.  211  *  Aiken  v.  Morris,  2  Barb.  Ch.  (N.. 

(1883).  Y.)  140  (1847). 

*Marston  v.  Brackett,  9  N.  H. 


§  358.]  FKAUD  IN  PURCHASE  MONEY  MORTGAGE.     431 


require  covenants  as  to  his  title  before  paying  the  contract 
price,  his  only  remedy  will  be  in  a  court  of  law/  If  the  pur- 
chaser  has  not  protected  himself  with  covenants  in  his  deed 
of  purchase,  he  will  have  no  remedy  upon  a  failure  of  title 
either  at  law  or  in  equity,  in  the  absence  of  fraud.*  In 
certain  cases,  however,  relief  has  been  granted  in  equity 
against  the  payment  of  the  purchase  money,  until  the 
purchaser  could  be  secured  against  existing  incumbrances 
or  defects  in  his  title,  where  the  conveyance  was  made 
with  full  covenants  and  there  were  doubts  of  the  grantor's 
solvency.* 


'  Denston  v.  Morris,  2  Edw.  Ch. 
(N.  Y.)  37(1833) ;  Abbott  v.  Allen,  3 
Johns.  Ch.  (N.  T.)  519  (1817) ;  8.  C. 
7  Am.  Dec.  554.  See  Corning  v. 
Smith,  6  N.  Y.  82  (1851) ;  Leggett 
V.  McCarty,  3  Edw.  Ch.  (N.  Y.)  124 
(1837) ;  Gouverneur  v.  Elmendorf,  5 
Johns.  Ch.  (N.  Y.)  79  (1821) ;  Chester- 
man  V.  Gardner,  5  Johns.  Ch.  (N.  Y.) 
29  (1820);  Bumpus  v.  Platner,  1 
Johns.  Ch.  (N.  Y.)  213  (1814);  Bates 
V.  Delavan,  5  Paige  Ch.  (N.  Y.)  300 
(1835);  Daviison  v.  DeFreest,  3 
Sandf.  Ch.  (N.  Y.)  456  (1846);  Banks 
V.  Walker,  2  Sandf.  Ch.  (N.  Y.)  348 
(1845);  Edwards  v.  Bodine,  26 
Wend.  (N.  Y.)  109  (1841);  Tallmadge 
V.  Wallis,  25  Wend.  (N.  Y.)  107 
(1840) ;  Tobin  v.  Bell,  61  Ala.  125 
(1878) ;  Strong  v.  Waddell,  56  Ala. 
473  (1876);  CuUum  v.  Branch 
Bank,  4  Ala.  21  (1843);  Alden  v. 
Pryal,  60  Cal.  233  (1883) ;  Barkham- 
sted  V.  Case,  5  Conn.  538  (1835); 
Harding  v.  Commercial  Loan  Co., 
84  ni.  261  (1876) ;  Beebe  v.  Swart- 
■wout,  8  ni.  (3  Gilm.)  163  (1846) ; 
James  v.  Hays,  34  Ind.  274  (1870) ; 
Laughery  v.  McLean,  14  Ind.  106 
(1860) ;  Natchez  v.  Minor,  17  Miss. 
(9  Smed.  &  M.)  544  (1848) ;  Ander- 
son V.  Lincoln,  6  Miss.  (5  How.)  279 
(1840) ;  Waddell  v.  Beach,  9  N.  J. 


Eq.  (1    Stockt.)   793    (1852);    Van 

Waggoner  v.  McEwen,  2  N.  J. 
Eq.  (1  H.  W.  Gr.)  412  (1841) ;  Shan- 
non  V.  Marselis,  1  N.  J.  Eq.  (1  Saxt.) 
426  (1831) ;  Maner  v.  Washington,  3 
Strobh.  (S.  C.)Eq.  171(1849);  Com- 
monwealth V.  McClanachan,  4  Rand. 
(Va.)  482  (1826) ;  Noonan  v.  Lee,  67 
U.  S.  (2  Black),  507  (1862) ;  bk.  17 
L.  ed.  280 ;  Patton  v.  Taylor,  48  U. 
8.  (7  How.)  159  (1849) ;  bk.  12  L.  ed. 
649 ;  Greenleaf  v  Cook,  15  U.  S.  (2 
Wheat.)  16  (1817) ;  bk.  4  L.  ed.  173; 
McFarlane  v.  Griffith,  4  Wash.  C.  C. 
585  (1826). 

«  Abbott  V.  Allen,  2  Johns.  Ch.  (N. 
Y.)  519  (1817) ;  8.  c.  7  Am.  Dec. 
554;  Laughery  v.  McLean,  14  Ind. 
108  (1860);  Hyatt  v.  Twomey.  1 
Dev.  &  B.  (N.  C.)  Eq.  317  (1836); 
Maney  v.  Porter,  3  Humph.  (Tenn.) 
363  (1842). 

*  See  Jones  v.  Stanton,  11  Mo.  486 
(1848) ;  Woodruff  v.  Bunce,  9  Paige 
Ch.  (N.  Y.)  443  (1842) ;  Bowen  v. 
Thrall,  28  Vt.  385  (1856).  But  ordi- 
narily the  insolvency  or  the  absence 
from  the  state  of  the  vendor  will  not 
take  the  case  out  of  the  general 
principle  stated  in  the  text.  See 
Piatt  V.  Gilchrist,  3  Sandf.  (N.  T.) 
120  (1849) ;  Hill  v.  Butler,  6  Ohio  St 
218  (1856). 


432  EEMEDIES  BY  MOETGAGOR  AGAINST  FEAUD.   [§359. 

§  359-  Remedies  by  mortgagor  against  fraud. — Where 
fraud  has  been  practiced  upon  the  mortgagor  by  the  mort- 
gagee or  his  agent,  or  witli  the  mortgagee's  knowledge,  in 
an  action  to  foreclose  a  mortgage  executed  under  such  cir- 
cumstances, the  remedy  of  the  mortgagor  is  to  allege  damages 
for  such  fraud  and  to  recoup  them  by  way  of  a  counter-claim.* 
In  such  a  case,  in  addition  to  the  defences  which  the  mortga- 
gor may  set  up  in  an  action  to  foreclose  the  mortgage,  he  may 
seek  the  affirmative  aid  of  the  court,  as  a  court  of  equity,  to 
cancel  the  instrument  sued  upon  as  fraudulent."  This  remedy 
would  seem  to  be  founded  upon  the  well  established  rule, 
that  relief  in  equity  can  be  had  against  any  deed  or  contract 
in  writing  founded  rn  mistake  or  fraud.* 

This  remedy,  however,  has  been  questioned  in  some  states. 
Thus,  in  an  early  Maine  case,*  it  was  said  that  the  learned 
chancellor  in  Gillespie  v.  Moon,'  "maintains  that  relief 
may  be  had  in  chancery  against  any  deed  or  contract  in 
writing  founded  in  mistake  or  fraud,  and  that  the  mistake 
may  be  shown  by  parol  proof,   and   relief  granted  to  the 


'  Ludington  v.  Slauson,  38  N.  Y.  (N.  Y.)  133  (1823) ;  Funch  v.  Aben- 

Supr.  Ct.  (6  J.  &  S.)  81  (1874).    See  lieim,  20  Hun  (N.    Y.)  1,  6  (1880); 

Greene  v.  Tallinan,  20  N.   Y.   191  Cbamplin  v.  Laytin,  18  Wend.  (N. 

(1859) ;  8.  c.  75  Am.  Dec.  384 ;  Ab-  Y.)  432  (1837) :    s.  c.   31  Am.   Dec. 

bott  V.  Allen,  2  Johns.  Ch.  (N.  Y.)  393 ;  Alden  v.  Pryal,   60   Cal.    223 

519  (1817) ;  s.  c.   7  Am.  Dec.  554  ;  (1882) ;  Bishop  v.  Clay  Ins.  Co.,  49 

Lathrop  v.  Godfrey,  6  T.  &  C.  (N.  Conn.  176  (1881) ;  Reading  v.  Wes- 

Y.)  96  (1875) ;  s.  c.  3  Hun  (N.  Y.)  ton,  8  Conn.   122  (1830) ;    s.  c.  20 

739.  Am.   Dec.  99  ;  Phoenix  Ins.  Co.  v, 

«  Gillespie  v.  Moon,  2  Johns.  Ch.  Hoflfheimer,   46    Miss.   658    (1872) ; 

(N.  Y.)  585  (1817) ;  s.  c.  7  Am.  Dec.  Firmstone  v.  DeCamp,  17  N.  J.  Eq. 

559  ;  Glass  v.  Hulbert,  102  IMass.  41  (2  C.  E.   Gr.)  309  (1865) ;    Huss  v. 

(1869)  ;  1  Story  Eq.  Jur.  §  161.  Morris,  63  Pa.  St.  373  (1869) ;  Wal- 

»  Gillespie  v.  Moon,  2  Johns.  Ch.  den  v.  Skinner,  101  U.  S.  (11  Otto), 

(N.  Y.)  585  (1817).     See  Willes  v.  585 ;  bk.  25  L.  ed.  966  (1879) ;  Snell 

Yates,  44  N.  Y.  529(1871);  Wood  V.  v.    Atlantic  F.   &  M.  Ins.   Co.,  98 

Hubbell,  10  N.  Y.  486  (1858) ;  Faure  U.  S.  (8  Otto),  89  (1878) ;  bk.  25  L. 

V.    Martin,   7   N.    Y.    213  ( 1852 ) ;  ed.  54. 

Hutcheon  v.  Johnson,  33  Barb.  (N.  *  Elder  v.  Elder,  10  Me.  (1  Fairf.) 

Y.)  398  (1861) ;  Kent  v.  Manchester,  86  (1833);  s.  c.  25  Am.  Dec.  208. 

29  Barb.  (N.  Y.)  595  (1859) ;  Fishell  »  2  Johns.  Ch.  (N.  Y.)  585  (1817); 

V.   Bell,    Clarke  Ch.    (N.  Y.  )    38  opinion  ^er  Chancellor  Kent. 
(1839) ;  Ptoosevelt  v.  Fulton,  2  Cow. 


§  360.]     FEAUD    EN"   PUKCHASE   MOIfEY    MORTGAGE.  433 

injured  party,  where  he  sets  up  the  mistake  affirmatively 
by  bill  or  as  a  defence.  We  have  looked  into  the  cases 
cited  by  him,  but  are  not  satisfied  that  they  sustain  the 
doctrine  to  the  extent  which  his  language  would  seem 
to  imply."  This  case,  however,  was  an  application  for 
the  reformation  of  a  written  contract  by  enlarging  its  terms 
by  parol,  and  for  a  specific  execution  of  it  as  amended  ;  and 
the  same  is  true  of  all  the  other  decisions  in  which  the  doc- 
trine laid  down  by  Chancellor  Kent  in  Gillespie  v.  Moon  is 
questioned.  It  is  worthy  of  note  that  in  most  of  the  cases 
the  statute  of  frauds  is  relied  upon  as  a  defence. 

§  360.     Defence  of  fraud  against  purchase  money  mort- 

l^age. — In  an  action  by  the  mortgagee  against  the  mortgagor, 
upon  a  note  secured  by  a  mortgage  given  for  the  purchase 
money  of  certain  premises,  the  mortgagor  may,  as  a  defence, 
set  up  a  counter-claim  for  damages  by  reason  of  the  fraud  of 
the  mortgagee  in  concealing  from  him  material  facts  as  to  the 
situation  and  extent  of  the  premises  ;*  and  if  such  damages 
exceed,  or  are  equal  to,  the  amount  of  the  mortgage,  the 
claim  under  the  mortgage  will  be  wholly  defeated.'  And  it 
has  been  held,  that  in  an  action  against  a  mortgagor  for 
purchase  money,  his  right  to  set  up  a  counter-claim  for  any 
excess  in  price,  paid  through  the  vendor's  misrepresentations 
of  the  extent  or  value  of  the  property,  is  the  same  ivhether 
such  misrepresentations  were  wilfully  or  innocently  made.' 

In  some  states  the  defence  of  fraud  in  the  consideration  of 
a  mortgage,  where  the  fraud  is  not  such  as  to  render  the 


•  Baughman  v,  Gould,  45  Mich.  weather  v.  Benjamin  32  Mich.  305 
481  (1881) ;  Burchard  v.  Frazer,  23  (1875) ;  Webster  v.  Bailey,  31  Mich, 
Mich.  224  (1871) ;  Dayton  v.  Melick,  36  (1875) ;  Steinbach  v.  Hill,  25 
32  N.  J.  Eq.  (5  Stew.)  570  (1880) ;  Mich.  78  (1872) ;  Converse  v.  Blum- 
Pierce  V.  Tiersch,  40  Ohio  St.  168  rich,  14  Mich.  109  (1866) ;  Pierce  v. 
(1883) :  Allen  v.  Shackleton,  15  Ohio  Tiersch,  40  Ohio  St.  168  (1883) ; 
St.  145  (1864).  Smith  v.  Richards,  38  U.  S.  (13  Pet.) 

«  Greene  v.  Tallman,  SON.  T.  191  26  (1839) ;  bk.  10  L.  ed.  42  ;  Tuthill 

(1851) ;  Lathrop  v.  Godfrey,  6  T.  &  v.  Babcock,  2  Woodb,  &  M.  C.  C. 

C.  (N.  Y.)  96  (1875) ;  s.  c.  8  Hun  298  ( 1846 ) ;    Smith  v.  Babcock,  3 

(N.  T.)  739.  Woodb.    &  M.    C.    C.    246  (1846) ; 

2  Baughman  v.  Gould,  45  Mich.  Taylor  v.  Ashton,  11   Mees.  &  W. 

481  (1881).   See  Lockridge  v.  Foster,  401  (1843) ;   Ainslie  v.  Medlycott,  9 

5  111.  (4  Scam.)  569  (1843) ;  Stark-  Yes.  21  (1803). 

(28) 


434  FALSE   REPRESENTATIONS.         [§§36L-362 

instrument  void,  but  merely  to  reduce  the  amount  to  be 
recovered  upon  it,  can  not  be  pleaded  by  an  answer  alone. 
Such  a  defence,  it  is  held,  must  be  set  up  in  a  cross-bill.* 

§  361.  False  representations  as  a  defence.— It  is  well 
established  that  a  vendee  may  set  up  as  a  defence  to  the 
foreclosure  of  a  purchase  money  mortgage,  or  in  mitigation 
of  damages,  false  and  fraudulent  representations  by  the 
vendor.'  But  a  fraudulent  representation  as  to  the  value  of 
property,  does  not  of  itself  invalidate  a  purchase  money 
mortgage  for  its  whole  amount,  if  the  property  purchased 
has  any  value  at  all ;  in  any  event  the  property  must  be 
restored  or  a  reconveyance  thereof  tendered,  before  the 
mortgage  can  be  canceled,*  because,  where  a  party  derives 
any  benefit  from  a  purchase,  he  can  not  rescind  the  contract 
as  long  as  he  retains  the  thing  purchased/  And  where  a 
purchaser  receives  anything  valuable  either  to  himself  or 
to  the  fraudulent  seller,  and  does  not  return  it,  he  thereby 
affirms  the  contract,  inasmuch  as  it  is  void  or  valid,  only  at 
his  election.* 

§  362.  Defence  of  false  representations  by  a  married 
woman. — To  enable  the  defence  of  fraud  or  misrepresen- 
tation to  be  set  up  in  an  action  to  foreclose  a  mortgage,  it 
seems  that  the  mortgagee  must  have  participated  in  or  have 
been  in  some  way  privy  to  such  fraud  or  misrepresentation. 
Thus,  where  a  mortgage  covering  a  homestead  and  other 


»  Parker  v.  Hartt,  32  K  J  Eq.  (5  308,  311  (1841) ;  Perley  v.  Balch,  40 

Stew.)  225  (1880) ;   O'Brien  v.  Hul-  Mass.  (23  Pick.)  283  (1839) ;  8.  0.  84 

fish,  22  N.  J.  Eq.  (7  C.  E.  Gr.)  472  Am.  Dec.  56. 

(1871) ;    Graham  v.   Berryman,   19  » Parley  v.   Balch,  40  Mass.   (23 

N.  J.  Eq.  (4  C.  E.  Gr.)  29  (1868) ;  Pick.)  283  (1839) ;    B.   c.   34    Am. 

Miller  v.  Gregory,  16  N.  J.  Eq.  (1  Dec.  56 ;   Sanborn  v.  Osgood,  16  N. 

C.  E.  Gr.)  274  (1863).  H.  112  (1844) ;  Shepherd  v.  Temple, 

«  See  Carey  v.  Guillow,  105  Mass.  3  N.  H.  455  (1826). 

18   (1870);    Tuttle   v.    Brown,    70  *  Perley  v.  Balch,  40  Mass.  (23 

Mass.  (4  Gray),  457  (1855) ;  Burnett  Pick.)  283  (1839) ;  s.  c.  34  Am.  Dec. 

V.   Smith,   70   Mass.    (4    Gray),  60  56 ;  Sanborn  y.  Osgood,  16  N.  H. 

(1855) ;  Dorr  v.  Fisher,  55  Mass.  (1  112  (1844). 

Cush.)  271  (1848) ;  Mixer  v.  Cobum,  »  Rowley  v.   Bigelow,   29  Mass. 

52  Mass.  (11  Mete.)  559,  561  (1846) ;  (12  Pick.)  307  (1832) ;  s.  c.  23  Am. 

Howard  v.  Ames,  44  Mass.  (3  Mete.)  Dec.    607  ;    Ayers   v.    Hewitt,    19 


§  363,]     FALSE    REPRESENTATIONS    AS   A   DEFENCE.  435 

property  w^as  presented  to  a  wife  by  her  husband  for  execu- 
tion, and  signed  by  her  under  the  supposition  that  the  home- 
stead was  not  included  therein,  it  was  held  that  the  mortgage 
was  valid,  as  it  did  not  appear  that  the  mortgagee  had 
any  knowledge  of  the  circumstances  under  which  it  was 
signed.* 

In  the  case  of  Alexander  v.  Bouton,"  a  married  woman,  to 
secure  the  debt  of  her  husband,  joined  him  in  the  execution 
of  a  note  and  mortgage  upon  her  separate  property,  having 
been  induced  to  do  so  by  the  representations  of  her  husband 
that  she  was  to  be  liable  only  to  the  extent  of  the  mortgaged 
property.  The  mortgagee  also  took  a  collateral  agreement 
from  others  to  secure  any  deficiency  that  might  remain  after 
the  sale  of  the  mortgaged  property ;  but  the  defendants 
were  not  parties  to  this  agreement.  In  a  foreclosure  of 
the  mortgage  it  was  held,  that  the  wife  was  bound  as 
principal,  and  that  her  liability  was  not  modified  by  her 
agreement  with  her  husband,  nor  by  the  additional  security 
taken  by  the  plaintiff.  But,  in  Indiana,  a  person  taking  an 
incumbrance  on  the  property  of  a  married  woman,  is  bound 
to  inquire  whether  the  consideration  is  for  her  benefit  or  for 
the  benefit  of  another;  and,  unless  he  is  misled  by  her  con- 
duct or  misrepresentations,  he  will  be  held  to  have  acquired 
a  knowledge  of  the  facts  which  prudent  inquiry  would  have 
disclosed.* 

§  363.  Defence  of  false  representations  by  purchaser 
who  assumed^  mortgage. — It  has  been  held  in  an  action 
by  a  mortgagee  to  recover  the  amount  of  his  mortgage 
against  a  purchaser  of  the  mortgaged  premises,  who  received 
a  conveyance  thereof  subject  to  the  mortgage  and  assumed 
the  payment  of  the  same,  that  it  is  a  good  defence,  that  the 
grantor  of  the  defendant  had  no  title  to  the  property ;  that 
his  representations  respecting  the  same  were  false  and  fraudu- 
lent, and  that  the  defendant  was  induced  thereby  to  assume 


Me.  281  (1841) ;  Sanborn  v.  Osgood,  »  55  Cal.  15  (1880). 

16    N.    H.    112    (1844) ;     Ayer    v.  »  Cupp  v.  Campbell,  103  Ind.  213 

Hawkes,  11  N.  H.  148  (1840).  (1885) ;  a  c.  1  West  Rep.  255. 

'  Edgell  V.  Hagens,  53  Iowa,  223 
(1880). 


436  MISKEPRESENXmO    QUANTITY — DEFEi^fCE.      [§  364. 

the  payment  of  the  mortgage.'  Where  a  person  has  pur- 
chased land  expressly  subject  to  a  mortgage,  such  purchaser 
can  not  set  up  as  a  counter-claim,  a  fraud  practiced  upon  him 
after  the  mortgage  was  given,  if  there  is  nothing  to  connect 
the  plaintiff  with  the  fraud  of  the  mortgagor.* 

Where  a  vendor,  under  a  misapprehension  of  his  legal 
rights,  'makes  false  representations  on  which  his  grantee 
relies,  they  will  constitute  such  a  fraud  as  will  be  a  ground 
for  relief  in  an  action  for  the  foreclosure  of  a  mortgage 
given  for  part  of  the  purchase  money.' 

To  be  available  as  a  defence  the  misrepresentations  must 
be  as  to  facts ;  misrepresentations  merely  as  to  the  value  of 
the  property  will  not  be  sufficient.*  And  where  a  defen- 
dant in  a  foreclosure  suit  avers  that  the  mortgage  was 
procured  by  false  representations,  the  burden  of  proving  the 
same  will  be  on  him.' 

§  364.  Misrepresentation  as  to  number  of  acres — 
Purchase  money  mortgage. — In  cases  where  a  vendor 
fraudulently  misrepresents  the  number  of  acres  and  thereby 
induces  the  vendee  to  pay  more  for  the  premises  than  he 
otherwise  would  have  paid,  an  abatement  will  be  allowed.* 
And  where  the  vendor  of  land,  by  misrepresenting  its  extent, 
induces  a  purchaser  to  incur  a  liability  for  land  which  the 
vendor  is  unable  to  convey,  the  effect  of  the  transaction,  in 
the  eyes  of  the  law,  is  a  fraud  upon  the  purchaser,  even 
though  both  parties  may  act  in  good  faith. ^ 


>  Benedict  v.  Hunt,  32  Iowa,  27  176  (1845) ;  Flint  v.  Jones,  5  "Wis. 

(1871).  424  (1856) ;   Coulson  v.  Coulson,  5 

«  Reed  v.  Latson,  15  Barb.  (N.  Y.)  Wis.  79  (1856)  ;  Savery  v.  King,  5 

9(1853).  H.  L.    Cas.    627   (1856);     s.   c.    35 

2  Champlin  v.  Laytin,  6  Paige  Ch.  Eng.  L.  &  Eq.  100. 

(N.  Y.)  189  (1836) ;  aff'd  18  Wend.  «  Dayton  v.  Melick,  34  N.  J.  Eq. 

(N.  Y.)  407  ;  B.  c.  31  Am.  Dec.  383.  (7  Stew.)  245  (1881). 

*  Sanborn  v.  Osgood,  16  N.  H.  112  '  Baughman  v.  GouJd,  45  Mich. 

(1844).  481  (1881).      See    Starkweather   v. 

»Ricord    v.   Jones,   33  Iowa,   26  Benjamin,   32    Mich.    305   (1875); 

(1871) ;    Perrett  v.   Yarsdorfer,   37  Webster    v.    Baily,    31    Mich.    36 

Mich.    596    (1877) ;    Sloan  v.    Hoi-  (1875) ;  Steinbach  v.  Hill,  35  Mich, 

comb,  29  Mich.  153  (1874) ;  Baldwin  78  (1872) ;  Convers  v.  Blumrich,  14 

V.  Bucklin,  11  Mich.  389  (1863).  See  Mich.  109  (1866). 
Buck  V.  Sherman,  2  Doug.  (Mich.) 


§  365.]      MISEEPKESEJS^ILXG    QUANTITY DJiFEIS^CE.  437 

But  it  has  been  held  that  the  vendee  of  land  can  not  claim 
a  deduction  from  a  purchase  money  mortgage  in  a  foreclosure 
suit,  on  the  ground  that  his  vendor,  who  was  not  the  mort- 
gagor, misstated  the  number  of  acres  of  land  conveyed,  and 
that  the  vendor  of  such  vendor,  who  was  the  mortgagee 
and  complainant,  made  a  similar  misstatement  when  he  sold 
such  land.  To  authorize  a  deduction  the  mortgagee  and  the 
owner  must  be  privies  in  contract.  Thus,  where  A.  sold  a 
farm  to  B.,  misstating  the  number  of  acres,  and  taking  a  mort- 
gage for  part  of  the  consideration,  and  B.  sold,  making  the 
5ame  misstatement,  to  C,  who  assumed  the  payment  of  B.'s 
mortgage,  in  an  action  by  A.  to  foreclose,  it  was  held  that  C. 
could  not  set  up  these  facts  in  order  to  offset  his  damages 
against  the  mortgage.' 

§  365-  False  representations  as  feo  extent  and  bound- 
aries of  land. — It  is  no  defence  to  an  action  for  fraud  in 
misrepresenting  the  quantity  of  land  in  a  parcel  which  the 
defendant  was  selling  the  plaintiff  by  the  acre,  that  the 
latter  saw  the  land  and  was  as  able  to  judge  of  its  size  as  the 
defendant ;  a  positive  assurance  of  the  area  of  the  parcel  of 
land  made  under  such  circumstances  is  very  material,  and  is 
equivalent  to  an  assurance  of  measurement  ;  and  if  the 
statement  is  false  and  the  vendee  is  deceived  thereby,  it 
constitutes  a  fraud  for  which  a  court  of  equity  will  grant 
relief.^' 

The  court  held  in  a  recent  Michigan  case,'  that  the  principle, 
that  there  is  no  fraud  where  both  parties  have  equal  means 
of  judging,  is  not  applicable  to  such  a  case,  for  it  will  not  be 
presumed  that  people  generally  can  judge  with  accuracy, 
by  the  eye,  of  the  contents  of  a  parcel  of  land  ;  but  that 
the  principle,  that  one  who  dissuades  another  from  inquiry 
and  deceives  him  to  his  prejudice  is  responsible,  is  in  point. 
Where  a  vendor  in  the  sale  of  land  misrepresents  the 
boundaries  of  such  land,  the  vendee  may  plead  in  defence 
raudulent  representations  as  to  the  extent  of  the  property 


>  Davis  V.  Qark,  33  N.  J.  Eq.  (6  Stew.)  579  (1881). 
•  Starkweather  v.  Benjamin,  33  Mich.  305  (1875). 
»  Starkweather  v.  Benjamin,  33  IVIieh.  305  (1875). 


438        misrepeese:ntations  as  to  BOUin^AiiiES.  [§366. 

and  recoup  in  damages  in  an  action  by  such  vendor  to  fore- 
close a  mortgage  taken  to  secure  part  of  the  purchase  price 
thereof,*  whether  the  vendor's  misrepresentations  were  inno- 
cently or  wilfully  made.* 

§  366.  Mutual  mistake  of  parties  as  a  defence.— Courts 
of  equity  will  relieve  against  a  mistake  as  well  as  against 
fraud  in  a  deed  or  contract  in  writing,  both  where  the  plain- 
tiff seeks  the  relief  affirmatively  and  where  the  defendant 
pleads  it  as  a  defence,*  and  will  correct  the  instrument  so  as 
to  make  it  express  the  intention  and  agreement  of  the  par- 
ties.* Where  the  fact  of  a  mistake  appears  and  the  interests 
of  no  third  party  intervene  to  raise  questions  of  equitable 
rights,  it  is  the  duty  of  the  court  to  make  the  correction ; 
and  this  duty  is  co-extensive  with  the  mistake,  and  extends 
not  merely  to  the  reformation  of  the  original  instrument, 
but  also  to  all  subsequent  proceedings,  judgments  and 
decrees,  into  which  the  mistake  may  have  been  carried.* 

To  entitle  a  party  to  relief  on  the  ground  of  mutual  mis- 
take, in  a  case  free  from  fraud,  the  mistake  must  be  as  to  a 
material  fact,  constituting  the  very  essence  and  terms  of 
the  contract ;  and  the  fact  must  be  of  such  a  nature  that  the 
party  could  not  by  reasonable  diligence  obtain  knowledge  of 
it  when  put  upon  inquiry.*  But  it  will  be  sufficient  notice 
of  the  mistake,  if  the  facts  stated  in  the  record  of  the 
mortgage  are  such  as  to  put  a  subsequent  purchaser  from 
the  mortgagor,  or  a  judgment  creditor,  upon  inquiry,  which 
would  lead  to  a  knowledge  of  the  mistake.* 


•  Pierce  v.  Tierscli,  40  Ohio  St.  and  strong,  so  as  to  establish  the 
168  (1883)  ;  Allen  v.  Shackleton,  15  mistake  to  the  entire  satisfaction 
Ohio  St.  145  (1864).  of  the  court ;    Gillespie    v.  Moon, 

*  Baughman  v.  Gould,  45  Mich.  supra. 

481    (1881) ;   Pierce  v.   Tiersch,   40  *  See  Dayton  v.  Melick,  34  N.  J. 

Ohio  St.  168,  172  (1883).  Eq.  (7  Stew.)  245  (1881). 

2  Gillespie  v.  ]Moon,  2  Johns.  Ch.  '  First  National  Bank  of  Parsons 

(N.  Y.)  585  (1817) ;  s.  c.  7  Am.  Dec.  v.  Wentworth,  28  Kan.  183  (1882). 

559  ;    Bush  v.    Bush,    33  Kau.  556  «  Taylor  v.  Fleet,  4  Barb.  (N.  T.) 

(1885) ;    8.    c.    6    Pac.    Rep.    794  ;  95  (1848).    See  Melick  v.  Dayton,  84 

Davenport  v.  Sovil,  6  Ohio  St.  459  N.    J.    Eq.    (7  Stew.)  245    (1881)  ; 

(1856).      The    evidence  to  show  a  Hammond  v.  Allen,  2  Sumn.   C.  C. 

mistake  in  a  mortgage  must  be  clear  887  (1836). 


§§  367-368.]    DEFENCE  OF  MUTUAL  MISTAKE. 


439 


§  26y.  Against  whom  mutual  mistakes  may  be  cor- 
rected.— Such  a  mutual  mistake  may  be  corrected  not  only 
as  against  the  mortgagor,  but  also  as  against  his  heirs, 
representatives,'  assigns,'  attaching  creditors,'  judgment  cre- 
ditors,* and  purchasers'  with  notice  of  the  mistake,  and  as 
against  a  junior  mortagagee  whose  lien  was  given  as  a 
security  for  an  antecedent  debt,"  but  not  as  against  sub- 
sequent bona  fide  purchasers.^  Where  a  clause  is  surrep- 
titiously inserted  in  a  deed  conveying  property,  contrary  to 
the  contract  of  the  parties,  purporting  to  bind  the  purchaser 
personally  with  the  assumption  of  the  mortgage  debt  existing 
against  the  property,  the  vendee  may  have  the  deed  reformed 
by  striking  out  such  clause.* 

§  368.  Remedies  for  correcting:  a  mistake. — A  mort- 
gagee may  come  into  a  court  of  equity  and  have  his  mortgage 
reformed  by  the  correction  of  a  mistake  in  the  description  of 
the  lands  conveyed,  and  have   it   foreclosed   in    the   same 


■f  National  Bank  v.  Dayton,  116 
m.  257  (1886). 

•  McKay  v.  Wakefield,  63  Ind.  37 
(1878). 

^  Andrews  v.  Gillespie,  47  JST.  Y. 
487  (1872).       • 

3  Bushv.  Bush,  33  Kan.  556(188.5); 
s.  c.  6  Pac.  Kep.  794. 

*  Boyd  V.  Anderson,  103  Ind.  217 
(1885) ;  Duncan  v.  Miller,  64  Iowa, 
223  (1884).  See  Monticello  Hydrau- 
lic Works  V.  Loughry,  72  Ind.  562 
(1880) ;  Wainwright  v.  Flanders,  64 
Ind.  306  (1878);  Busenbarke  v. 
Ramey,  53  Ind.  499  (1876) ;  J'landers 
V.  O'Brien,  46  Ind.  284  (1874); 
Glideweld  v.  Spaugh,  28  Ind.  319 
(186G) ;  Sample  v.  Rowe,  24  Ind.  208 
(1865) ;  Orth  v.  Jennings,  8  Black f. 
(Ind.)  420  (1847) ;  Sparks  v.  State 
Bank,  7  Blackf.  (Ind.)  469  (1845) ; 
B.  c.  39  Am.  Dec.  437;  Wliite  v. 
Wilson,  6  Blackf.  (Ind.)  448  (1843). 

'  Gouverneur  v.  Titus,  0  Paige 
Ch.  (N.  Y.)  347  (1837) ;   Whitehead 


V.  Brown,  18  Ala.  682  (1851) :  Wall 
V.  Arrington,  13  Ga.  88  (1853); 
White  V.  Wilson,  6  Blackf.  (Ind.) 
448  (1843) ;  s.  c.  39  Am.  Dec.  437  ; 
Simmons  v.  North,  11  Miss.  (3 
Smed.  &  M.)  67  (1844)  ;  Strang  v. 
Beach,  11  Ohio  St.  283  (1860) ;  s.  c. 
78  Am.  Dec.  308. 

"  Busenbarke  v.  Rainey,  53  Ind. 
499  (1876).  See  Vanlleusen  v.  Rad- 
cliff,  17  N.  Y.  580  (1858) ;  s.  c.  73 
Am.  Dec.  480  ;  Manhattan  Co.  v. 
Evertson,  6  Paige  Ch.  (N.  Y.)  457 
(1837) ;  Powell  v.  Jeffries,  5  111.  (4 
Scam.)  387  (1843);  Clay  v.  Ililde- 
brand,  34  Kan.  694  (1886) ;  Cox  v. 
Esteb,  81  ]Mo.  393  (1884) ;  Morse  v. 
Godfrey,  3  Story  C.  C.  364  (1844). 

''  Busenbarke  v.  Ramey,  53  Ind. 
499  (1876) ;  Flanders  v.  O'Brien,  46 
Ind.  284  (1874)  ;  2  Hare  &  W.  Lead. 
Cas.  (3d  Am.  cd.)  104. 

*  Albany  City  Savings  Inst.  v. 
Burdick,  87  N.  Y.  40,  48  (1881).  See 
ante  §  224. 


440  DEFENCE    OF   MUTUAL    MISTAKE.  [§369. 

action,  even  after  the  law  day  has  passed,'  because  when 
a  court  once  acquires  jurisdiction  for  the  purpose  of  fore- 
closing a  mortgage,  it  may  proceed  to  settle  all  questions 
in  litigation  between  the  parties  growing  out  of  the  mortgage,' 
Where  there  has  been  a  mutual  mistake  in  the  description 
of  the  premises  mortgaged,  which  is  not  discovded  until 
after  the  sale  on  foreclosure,  the  judgment  and  sale  may  be 
set  aside  and  an  amended  complaint  may  be  filed,  so  as  to 
obtain  a  new  judgment  correcting  the  description,  reforming 
the  mortgage  and  directing  a  new  sale,  providing  the  property 
was  bought  in  by  the  mortagagee  at  the  foreclosure  sale,* 
on  the  principle  that  where  the  plaintiff  in  a  foreclosure 
has  become  the  purchaser  and  has  not  parted  with  his  interest, 
the  decree  may  be  opened  by  the  court  which  granted 
it,  if  the  error  can  not  be  corrected  on  a  rehearing  or 
upon  a  bill  to  review  ;*  or  a  new  action  may  be  maintained 
to  correct  the  misdescription.'  But  it  has  been  held,  that 
a  purchaser  upon  foreclosure  can  not  come  into  court  and 
ask  that  other  property,  in  the  place  of  that  sold  to 
and  purchased  by  him,  be  subjected  to  his  purchase  on 
the  ground  that  by  mistake,  the  mortgage  covered  different 
property  from  that  intended/ 

§  369.  Mutual  mistake  as  to  title. — Although,  as  a 
general  rule,  a  mistake  of  law  forms  no  ground  for  reforming 
a  contract,^  yet,  where  parties  enter  into  a  contract  under  a 


»  A-lexander  v.  Rea,  50  Ala.  450  773(1878);  Schwickerath  ,.  Cooksey, 

(1873).     See  Savings  &  Loan  Society  53    Mo.    75    (1873) ;    Davenport    v. 

V.  Meeks,  66  Cal.  371  (1885) ;  s.  c.  5  Sovil,  6  Ohio  St.  459  (1856). 

Pac.  Rep.  624;  Doe  v.  Vallejo,  29  *  Thompson  v.  Maxwell,  16  Fla. 

Cal.    385  (1866) ;    Halsted  v.    Lake  773,  778  (1878).     See  Millspaugh  v. 

County,  56  Ind.  363  (1877);  Barnaby  McBiide,  7  Paige  Ch.   (N.  Y.)  509 

V.  Parker,  53  Ind.  271  (1876);  Palmer  (1839) ;  s.  c.  34  Am.  Dec.  360, 

V.  Windrom,   12  Neb.   494  (1882);  » Burkam  v.   Burk,    96   Ind.    270 

Davenport  v.  Sovil,  6  Ohio  St.  459  (1884) ;  Armstrong  v.  Short   95  Ind. 

(1856).    See  also  Bentley  v.  Smith,  2  26  (1883) ;    First  National  Bank  of 

Keyes  (N.  Y.)  343  (1866),  Parsons  v.  Wentworth,  28  Kan.  183 

«  Alexander  v.   Rea,  50  Ala.  450  (1882). 

(1873) ;  Scruggs  v.   Driver,  31  Ala.  «  Schwickerath    v,    Cooksey,    53 

274  (1857);    Stow  v.   Bozeman.   29  Mo.    75    (1873).       See    Barnard    v. 

Ala.  397  (1856).  Duncan,  38  Mo.  170  (1866)  •  Haley 

*  Thompson  v.  Maxwell,   16  Fla.  v.  Bagley,  37  Mo.  363  (1866). 


§  370.]  MUTUAL   JnSTAKE   AS   TO    TITLE.  -iil 

mutual  mistake  of  law,  or  a  mutual  misconception  of  their 
legal  rights  amounting  to  a  mistake  of  law,  by  reason  of  which 
their  object  is  prevented  from  being  accomplished,  such 
contract  is  as  liable  to  be  set  aside  or  reformed  as  a  con- 
tract founded  upon  a  mistake  in  matters  of  fact.' 

Thus,  where  a  vendor,  under  a  misapprehension  of  his 
legal  rights,  sold  a  lot  of  land,  which,  by  the  terms  of  con- 
veyances of  adjoining  lands  to  prior  purchasers,  had  been 
constructively  dedicated  for  the  purposes  of  a  public  street, 
and  represented  to  the  purchaser  that  the  lot  would  not  be 
taken  for  a  street  without  paying  to  the  vendee  the  full 
value  thereof,  but  without  communicating  the  facts  upon 
which  the  legal  question  as  to  the  rights  of  the  prior  pur- 
chasers depended,  and  the  vendee,  relying  upon  this  informa- 
tion, purchased  and  in  part  paid  for  a  lot,  which  was  in  fact 
of  no  value  either  to  him  or  to  the  vendor,  it  was  held  that 
the  vendee  was  entitled  to  relief  as  against  a  bond  and  mort- 
gage given  by  him  on  such  contract,  and  to  a  return  of  the 
purchase  money  which  had  been  paid  toward  the  lot  under 
such  mutual  misapprehension.' 

It  is  a  general  rule,  however,  that  ignorance  of  the  law, 
with  a  full  knowledge  of  the  facts,  can  not  generally  be 
pleaded  as  a  defence  ;  nor  will  it  protect  a  party  from  the 
operation  of  a  rule  of  equity  law,  when  the  circumstances 
would  otherwise  create  an  equitable  bar.' 

§  370.     Mutual  mistake  as  to  quantity  of  land. — A  mere 

mistake  of  both  parties  as  to  the  number  of  acres  of  land 

, conveyed,  is  no  ground  of  defence  to  a  mortgage  given  for 


■I  Gamar  v.  Bird,  57  Barb.  (N.  Y.)  c  31  Am.  Dec.  382.      See  Garnar  v. 

277,   291   (1870).     But  it  lias  been  Bird,  57    Barb.   (X.   Y.)    277,    291 

held    in    South    Carolina   that    the  (1869) ;  Mount  v.  Morton,  20  Barb, 

maxim  ignorantia  Juris  non  excuaat,  (N.  Y.)  123  (1855). 

applies  in  civil  cases  where  redress  *  Champlin  v.  Laytin,  6  Paige  Ch. 

is  sought  for  a  wrong  done  or  a  (N.  Y.)  189  (1836)  ;  aff'd  18  Wend, 

right  withheld,     Lawrence  v.  Beau-  (N.  Y.)  407 ;  s.  c.  31  Am.  Dec.  382. 

bien,  2  Bail.  (S.  C.)  L.  623  (1831) ;  »  gtorrs  v.  Barker,  6  Johns.   Ch. 

8.  c.  23  Am.  Dec.  155.  (N.  Y.)  166  (1882).  But  see  Lawrence 

»  Champlin  v.  Laytin,  1  Edw.  Ch.  v.  Beaubien,  2  Bail.  (S.  C.)  L.  623 

(N.  Y.)  467  (1832) ;  s.  c.  afE'd  6  Paige  (1831);  23  Am.  Dec.  155. 
Ch.  (N.  Y.)  189 ;  18  Wend.  407 ;  s. 


442 


MUTUAL   MISTAKE    AS    TO    AKEA. 


[§  370. 


the  purchase  money,  there  being  no  fraud  or  misrepresenta- 
tion by  the  grantor.*  But  the  question  of  abatement  from 
the  amount  of  the  mortgage  on  account  of  a  deficiency  in  the 
area  of  the  premises,  may  be  raised  by  answer  by  the  mort- 
gagor in  foreclosure  proceedings.* 

It  has  been  held  that  a  reply  to  a  counter-claim,  which  sets 
up  a  prior  mortgage  on  the  premises,  alleging  a  material  mis- 
take in  the  description  of  the  lands  in  the  defendant's  mort- 
gage, and  that  it  was  not  intended  to  cover  the  same  premises 
as  the  mortgage  sought  to  be  foreclosed,  is  good  on  de- 
murrer.' And  under  executory  contracts  relief  will  be  granted, 
where  it  clearly  appears  that  the  parties  acted  under  a  mutual 
mistake  as  to  the  quantity  of  land  sold,  and  it  is  proved  that 
the  deficiency  was  material,  if  the  mistake  on  the  part  of  the 
vendee  was  caused  by  the  misrepresentation  of  the  vendor, 
although  not  fraudulently  made.*  Thus,  where  the  owner  of 
a  farm,  innocently  but  untruly,  states  the  quantity  of 
land  contained  therein,  and  a  purchaser,  relying  upon  the 
statement,  buys  the  land  and  takes   a   deed   thereof,   and 


1  Nelson  v.  Hall,  60  N.  H.  274 
(1880) ;  Melick  v.  Dayton,  34  K  J. 
Eq.  (7  Stew.)  245  (1881).  Where 
there  has  been  no  fraud  or  misrepre- 
sentation, the  purchaser  is  neither 
liable  for  a  surplus  nor  entitled  to  a 
deduction  on  account  of  any  defi- 
ciency in  the  quantity  or  measurement 
of  the  premises  mentioned  in  the 
contract  or  deed.  Morris  Canal  Co. 
V.  Emmett,  9  Paige  Ch.  (N.  Y.)  168 
(1841) ;  8.  c.  37  Am.  Dec.  388.  See 
Northup  V.  Sumney,  37  Barb.  (N.  Y.) 
196  ( 1858 ) ;  Mann  v.  Pearson,  2 
Johns.  (N.  Y.)  37  (1806);  Kirkpatrick 
V.  McMillen,  14  La.  497  (1840);  Pow- 
ell V.  Clark,  5  Mass.  355  (1809)  ;  s.  c. 
4  Am.  Dec.  67 ;  Clark  v.  Davis,  33 
K.  J.  Eq.  (5  Stew.)  530  (1880); 
Beach  v.  Stearnes,  1  Aik.  (Vt.)  325 
(1835).  It  seems  that  while  a  defi- 
ciency in  the  quantity  of  the  land  sold 
may  be  set  up  by  the  vendee  in  an 
action  to  foreclose  a  mortgage  given 


as  part  of  the  purchase  price,  it  caa 
not  be  pleaded  by  the  grantee  of  the 
vendee,  who  has  assumed  and  cove- 
nanted to  pay  the  mortgage  as  part 
of  his  purchase  money.  Clark  v. 
Davis.     Supra. 

'  Melick  V.  Dayton,  34  N.  J.  Eq. 
(7  Stew.)  245  (1881). 

0  Porter  v.  Reid,  81  Ind.  569 
(1882).  , 

<  Belknap  v.  Sealey,  14  N.  Y.  143 
(1856) ;  s.  c.  67  Am.  Dec.  130;  afl'g 
8.  c.  2  Duer  (N.  Y.)  570.  Wliere 
the  statement  made  by  the  vendor 
of  the  quantity  of  land  sold  is  mere 
matter  of  description  and  not  of  the 
essence  of  the  contract,  no  relief 
will  be  granted.  Stebbins  v.  Eddy, 
4  Mason  C.  C.  414  (1827).  See  this 
case,  collating  the  authorities,  for  a 
full  discussion  as  to  when  a  court 
will  grant  relief  for  a  deficiency  in 
the  quantity  of  land  purchased. 


§  371.]  DEFENCE    OF    CJNDUE    INFLUENCE.  4-13 

subsequently  discovers  that  the  actual  quantity  deeded  to 
him  is  materially  less  than  that  stated,  he  will  be  entitled 
to  plead  such  deficiency  as  a  defence  in  abatement  in  an 
action  to  foreclose  a  mortgage  given  by  him  as  part  of  the 
purchase  money.* 

§  371.  Defence  of  undue  influence. — A  contract  made 
between  persons  sustaining  relations  of  trust  and  confidence, 
where  it  appears  that  the  stronger  and  controlling  mind  has 
obtained  an  advantage,  will  be  set  aside  as  fraudulent  unless 
the  beneficiary  shows  good  faith  in  the  transaction.*  Thus, 
where  a  daughter,  through  undue  influence,  and  without  an 
adequate  consideration,  procured  from  her  aged  and  infirm 
mother  the  execution  of  a  note  and  mortgage,  it  was  held 
that  these  obligations  should  be  canceled  upon  the  petition 
of  the  heirs  of  the  mother.*  And  relief  may  be  granted  as 
against  a  mortgage  extorted  by  a  son  from  his  parents  by 
oppressive  means  and  for  an  inadequate  consideration,  while 
he  was  practically  in  a  position  of  guardianship  over  them 
and  their  property.* 

Where  one  standing  in  loco  parentis  to  minor  owners  of 
real  estate,  who  are  accustomed  to  obey  him,  and  are  ignorant 
of  business  affairs,  induces  them  after  they  have  attained 
their  majority,  to  execute  to  him  a  mortgage,  it  may  be 
impeached  for  fraud  and  undue  influence.*  And  where  a 
man,  who  lived  for  years  in  unlawful  relations  with  a  woman 
who  shared  his  home  and  who  claimed  to  be  a  spiritualistic 
medium  and  to  have  daily  communication  with  his  deceased 
wife,  executed  a  mortgage  in  favor  of  such  woman,  it  was 
held  that  fraud  and  undue  influence  would  be  presumed  in 


» Paine  v.  Upton,  87  N.  Y.  327  *  Spargur  v.  Hall,  62  Iowa,  498 

(1882) ;  s.  c.  41  Am.  Rep.  371.     See  (1883)  ;  Leighton  v.   Orr,  44  Iowa, 

Couse  V.  Boyles,  4  N.  J.  Eq.  (3  H.  679  (1876) ;  Tucke  v.  Buchliolz,  43 

W.  Gr.)  212  (1842);  s.  c.  38  Am.  Dec.  Iowa,  415  (1876). 

514 ;  Darling  v.  Osborne,  51  Vt.  148  »  Spargur  v.  Hall,  62  Iowa,    498 

(1878) ;  Quesnel  v.  Woodlief,  2  Hen.  (1883). 

&  :\runf .  (Ya.)  173  (1808) ;   Hill   v.  ■»  Bowe  v.    Bowe,    42    Mich.    195 

Buckley,  17  Ves.  395  ^1811) ;  Shovel  (1879). 

V     Bogan,   2    Eq.    Cas.    Abr.    688  *  Tucke  v.  Buchholz,  43  Iowa,  415 

(1708).  (1876). 


444  itJURESS    AS    A   DEFENCE.  [§  372. 

the  absence  of  proof  of  a  valid  consideration  for  the  con- 
veyance.' 

§  372.  Duress  as  a  defence. — A  defendant  may  show 
as  a  defence  to  an  action  to  foreclose  a  mortgage  that  the 
^strument  was  executed  under  duress,  and  that  it  is  for  that 
reason,  void.*  The  duress  need  not  be  actual  physical 
restraint,  or  duress  of  the  person ;  it  may  be  a  species  of 
force,  terrorism  or  coercion  which  overcomes  free  agency, 
and  under  which  fear  seeks  security  in  concession  to  threats 
and  to  apprehensions  of  injury.* 

The  defendant  may  show  that  the  note  was  paid,  as  well 
as  given,  under  duress,  such  as  a  threat  to  have  the  obligor's 
son  arrested  and  prosecuted  for  burglary,  larceny  or  other 
crime  ;*  but  if  the  money  be  voluntarily  paid  in  fulfillment 
of  such  an  agreement,  it  can  not  be  recovered.'  The  defence 
of  duress  is  available  to  one  who  stands  in  the  relation  of 
surety  as  well  as  to  the  principal.'  Where  threats  of  a  crimi- 
nal prosecution  are  resorted  to,  for  the  purpose  of  overcoming 
the  will  of  the  party  threatened  by  intimidating  or  terrifying 
him,  they  amount  to  such  duress  or  pressure  as  will  avoid  a 
contract  thereby  obtained,^  And  where  a  person  has  been 
induced  by  threats  of  a  groundless  prosecution  to  execute  a 
note  and  mortgage,  a  court  of  equity  will  grant  relief  and 
restrain  their  collection." 


'  Leighton  v.  Orr,  44  Iowa,  679  Nevada    v.    Bryan,    62    Iowa,    43 

(1876).  (1883). 

«  Vinton  v.    King,    86    Mass.   (4  » Eade  v.   Slimmon,   26  N.  Y.   9 

Allen),  562,  564  (1862).    See  Eadie  v.  (1862),  and  Lefebvre  v.  Dutruit,  51 

Slimmon  26  N.  Y.  9  (1862);  Sears  v.  Wis.  326  (1881);  s.  c.  37  Am.Rep.  833. 

Shafer,  1  Barb.  (N.  Y.)  408  (1847) ;  ^  Schultz  v.  Culbertson,  49  Wis. 

B.    c.    6    N.    Y.    272;   Whelan    v.  122(1880). 

Whelan,  3  Cow.  (N.  Y.)  537(1824)  ;  <>  Schultz  v.  Culbertson,  49  Wis. 

Evans  v.  Ellis,  5  Den.  (N.  Y.)  640  122  (1880). 

(1846) ;   Schoener    v.    Lissauer,    36  « Ingersoll  v.  Roe,  65  Barb.  (K  Y.) 

Hun  (N.  Y.)  100  (1885);    Mills  v.  346(1873). 

Rodewald,  17  Hun  (N.  Y.)  297,  304  ■>  Eadie  v.  Slimmon,  26  N.  Y.  9 

(1879);  Howell  V.  Ransom,  11  Paige  (1862)  ;  Fisher   v.    Bishop,  36  Hul 

Ch.    (N.  Y.)    538    (1845) ;    Ellis  v.  (N.  Y.)   112,  114  (1885)  ;  Haynes  v. 

Messervie,  11  Paige  Ch.  (N.  Y.)  467  Rudd,  30  Hun  (N.  Y.)  239  (1883) ;  a 

(1845) ;  Spargur   v.   Hall,  62  Iowa,  c.  83   N,  Y.    251  ;  Williams  v.  Baj- 

498    (1883) ;    First    Nat.    Bank    of  ley,  35  L.  J.  Ch.  717  (1866). 


§  373.]  duretss  uxdeb  onio  doctrike.  445 

Where  the  consideration  of  a  bond  is  an  agreement  to 
interfere  with  the  due  administration  of  a  criminal  prosecu- 
tion, or  its  execution  is  procured  by  duress,  it  will  not  be 
binding  on  the  obligor.'  But,  if  such  a  bond  is  voluntarily 
executed  for  the  purpose  of  making  reparation  to  the  persons 
defrauded  by  the  obligor,  it  will  be  binding,  notwithstanding 
the  fact  that  such  persons  were  prosecuting  the  obligor  for 
the  fraud,  and  such  prosecution  was  pending  at  the  time  of  the 
execution  of  the  bond.' 

§  373'  Duress  under  Ohio  doctrine. — In  a  recent  case* 
the  supreme  court  of  Ohio  held,  that  in  an  action  by  a 
mortgagee  against  the  mortgagor  under  the  statute,*  to 
recover  possession  of  the  lands  mortgaged,  the  fact  that  such 
mortgage  was  given  to  compound  a  felony,  is  not  available 
as  a  defence.  The  court  say,  Okey,  C.  J.,  writing  the  opinion, 
that,  "  An  examination  of  these  cases  will  show  very 
clearly,  that  under  the  law  as  it  existed  before  the  adoption 
of  the  Code  of  Civil  Procedure  of  1853,  there  was  no  such 
defence  to  an  action  of  ejectment  based  on  a  mortgage  like 
this  ;  nor  could  a  bill  in  chancery,  founded  on  such  facts,  be 
entertained  to  restrain  such  action  or  quiet  the  title  of  the 
mortgagor.  As  against  such  mortgage  the  only  relief  in 
the  courts  available  to  the  mortgagor  or  his  heirs,  on  the 
facts  here  stated,  was  a  bill  to  redeem.  It  is  urged,  how- 
ever, that  the  rule  is  now  very  different,  and  that  by  reason 
of  the  blending  of  legal  and  equitable  actions  and  defences, 
under  the  Code  of  Civil  Procedure,  the  defence  of  illegality 
is  equally  available  to  the  defendant  whether  an  action  is 
brought  upon  the  note  or  upon  the  mortgage  to  obtain  a 
sale  of  the  property,  or  for  the  recovery  of  the  possession  of 
the  land  under  the  mortgage.  True,  the  rights  of  parties, 
with  respect  to  a  few  matters,  are  changed  by  the  Code,  as, 
for  instance,  the  acknowledgment  of  a  debt  sufficient  to  take 


*  James  v.  Roberts,  18  Ohio,  548  Rep.  159  (1888) ;   s.  c.  19  Pitts.  L 
(1849).  J.  84  ;  21  Chicago  Leg.  News,  47. 

1  Avery  v.  Layton,  (Pa.)  12  Crit.  »  Williams    v.     Englebrecht,     37 

Rep.  159  (1888) ;  s.  c.  19  Pitts.  L.  J.  Ohio  St.  383(1881). 

84  ;  21  Chicago  Leg.  News,  47.  ■»  Ohio  Civil  Code,   §  558  ;    Rev. 

*  Avery  v.  Layton,  (Pa.)  12  Crit.  Stat.  §§57,  81. 


446.  DUKESS    UNDEE    OHIO    DOCTRmE.  [§  374. 

a  case  out  of  the  statute  of  limitations,  must  now  be  in 
writing ;  and  tiie  practical  effect  of  permitting,  in  a  proper 
case,  the  determination  of  the  rights  of  the  parties,  legal  and 
equitable,  in  the  same  suit,  enables  a  person  sometimes  to 
secure  rights,  which,  under  the  former  practice,  would  have 
)een  lost.  But,  with  the  exception  of  the  express  changes 
referred  to,  the  rights  of  parties  are  unaffected  by  the  Code. 
This  view  is  well  expressed  in  Dixon  v.  Caldwell,'  where 
it  was  said  :  *  The  distinction  between  legal  and  equhable 
rights  exists  in  the  subjects  to  which  they  relate,  and  is  not 
affected  by  the  form  or  mode  of  procedure  that  may  be  pre- 
scribed for  their  enforcement.  The  Code  abolished  the 
distinction  between  actions  at  law  and  suits  in  equity,  and 
substituted  in  their  place  one  form  of  action  ;  yet  the  rights 
and  liabilities  of  parties,  legal  and  equitable,  as  distinguished 
from  tne  mode  of  procedure,  remain  the  same  since,  as 
before,  the  adoption  of  the  Code.'  As  the  heirs  of  the  mort- 
gagor could,  in  a  case  like  this,  have  maintained  a  bill  under 
the  former  practice,  to  redeem,  they  may,  of  course,  obtain  the 
same  relief  in  this  case  by  cross-petition.'  This  is  not  a 
change  of  the  rights  of  the  parties.  But,  as  we  have  seen, 
a  bill  in  chancery  could  not  have  been  entertained  to 
restrain  an  action  of  ejectment  on  a  mortgage  like  this,  and 
hence  the  heirs  of  the  mortgagor  can  not  maintain  a  cross- 
petition  for  such  relief  in  this  case.  To  hold  otherwise  is  to 
affirm  that  the  Code  has  effected  most  material  changes  in 
the  rights  of  the  parties,  without  any  words  to  indicate  a 
purpose  to  make  such  change." 

§  374.  Mortgage  executed  by  married  woman  under 
duress. — Where  the  signature  of  a  woman  to  a  mortgage 
was  obtained  by  duress,  the  mortgage  purporting  in  terms 
to  charge  her  separate  estate,  and  stating  that  the  con- 
sideration therefor  was  for  the  benefit  of  such  estate,  it  may 
be  shown  in  defence  that  such  statement  was  not  true,  that 
the  note  was  not  given  in  the  course  of  any  separate  busi- 
ness carried  on  by  her,  but  that  it  was  obtained  by  duress  and 
fraud.     Such  a  mortgage  can  not  be  enforced  against  her 


» IS  Ohio  St.  412,  415  (1864).  •  Ohio  Rev.  St.  §  6071. 


§  374.7  DURESS  or  maeeied  womait.  447 

even  in  the  hands  of  a  bona  fide  holder.'  Thus,  where  a 
woman's  husband  was  illegally  restrained  in  the  office  of  an 
attorney,  who  represented  to  her  that  unless  she  executed 
a  mortgage  on  her  homestead,  her  husband  would  be  arrested 
on  a  charge  of  felony,  and  she  executed  the  mortgage  sued 
upon,  solely  to  avoid  his  arrest,  the  mortgage  was  held 
to  have  been    obtained    under   duress  and  therefore  to  be 

void.^ 

But  it  will  not  be  a  good  plea  of  duress  in  an  action  to 
foreclose  a  mortgage  executed  by  a  husband  and  wife,  that 
she  was  induced  to  sign  the  mortgage  through  represen- 
tations that  the  plaintiff  would  pursue  legal  remedies  against 
the  husband,  to  collect  the  debt  secured,  and  would  sell 
them  out  of  house  and  home,  in  case  she  did  not  execute  it.' 
And  where  a- husband  threatened  to  poison  himself  unless 
his  wife  signed  a  note  as  security  for  him,  which  threat  was 
conveyed  to  her  through  the  payee,  by  means  whereof 
she  was  induced  to  sign  such  note,  the  court  held  that 
this   did   not   amount   to   such  duress  as  would  avoid  her 

contract.* 

Where  a  public  defaulter  disclosed  his  situation  and  his 
liabiHty  to  a  criminal  prosecution  to  his  wife,  and  urged  her 
to  execute  a  mortgage  to  secure  his  sureties,  declaring  at 
the  time  that  he  would  commit  suicide  before  he  would  go 
to  jail,  and  she  executed,  acknowledged  and  dehvered  the 
mortgage  without  final  objection  after  several  days'  hesita- 
tion  and  importunity— the  mortgagees  having  no  knowledge 
of  her  reluctance,  and  no  prosecution  having  been  com- 
menced or  threatened  against  the  husband,  and  he  not  having 
represented  to  his  wife  that  there  had  been— the  mortgage 
■was  held  to  be  vahd.* 


1  Loomis  V.  Ruck,  56  N.  T.  463  »  Lefebvre  v.  Dutruit.  51  Wis.  336 

^874)  (1881) ;  a  c.  37  Am.  Rep.  833.     See 

» list  Nat.  Bank  of  Nevada  v.  also  Smith  v.   Allis,   53  Wis.   337 

Bryan.  63  Iowa,  43  (1883) ;  Green  v.  (1881),   and  Wright  v.  Remmgton. 

Scranage,  19  Iowa,  461  (1865).  41  N.  J.  L.  (13  Vr.)  ^  (1879) ;    8.  o. 

»  Buck  V.  Axt,  85  Ind.  513  (1882).  33  Am.  Rep.  180  ;  aff  d  43  N.  J.  L. 

«  Wright  V.  Remington,  41  N.  J.  (14  Vr.)  451  (1881). 
L.  (13  Vr.)  48  (1879)  ;  s.  o.  33  Am. 
Rep.  180. 


448  DTJEESS   OF  PERSON   AS   A   DEFENCE.  [§375. 

§  375.  Duress  of  person. — Where  a  note  and  mortgage 
are  obtained  from  a  prisoner  falsely  charged  with  felony, 
they  are  obtained  under  duress  and  are  void  in  the  hands  of 
one  who  received  them  with  knowledge  of  the  facts.' 

It  is  a  general  rule  that  the  assignment  of  property  by  a 
wife  to  free  her  husband  from  imprisonment,  must  be 
obtained  under  circumstances  which  leave  no  doubt  either 
of  the  validity  of  the  claim  against  the  husband  or  of  the 
full  consciousness  on  her  part  of  the  effect  of  her  own  deed.' 
It  matters  not  whether  the  threats  are  made  by  the  husband 
or  by  a  third  party  against  the  husband,  provided  they  be  of 
such  a  character  as  to  show  beyond  a  question  that  the  wife 
acted  under  an  apprehension  of  personal  injury  or  grievous 
wrong.'  Thus,  it  has  been  held,  that  terrifying  a  woman  so 
as  nearly  to  produce  hysterics,  by  threatening  to  prosecute 
her  husband  for  alleged  embezzlement,  will  be  such  coercion 
as  will  avoid  a  mortgage  which  was  thus  procured  upon  her 
separate  property.* 

It  has  been  said  that  the  constraint  and  duress  which  has 
generally  availed  to  impeach  a  contract,  has  proceeded  from 
actual  violence  or  a  well-grounded  fear  of  personal  injury  ;* 
and  that  duress  and  coercion,  to  prevail  as  a  defence  against  a 
mortgage  executed  by  a  wife  upon  her  separate  estate,  to 
secure  her  husband's  debt,  must  go  to  the  extent  of  depriving 
her  of  free  volition  by  reason  of  fear  of  personal  injury.* 


»  Osbom  V.  Robbing,  36  N.  Y.  365  Jones  v.  Diederich,  3  Daly  (N.  T.) 

(1867)  ;  8.  c.  4  Abb.  (N.  Y.)  Pr.  N.  177  (1869) ;   Wallach  v.  Hoexter,  8 

S.  15,  21.    See  Strong  v.  Grannis,  How.  (N.  Y.)  Pr.  N.  S.  196  (1886). 

26  Barb.  (N.Y.)  123  (1857);  Richards  »  Rexford  v.  Rexford,  7  Lans.  (N. 

V.  Vanderpoel,  1  Daly  (N.  Y.)  71,  Y.)  6,  8  (1872). 

75, 76  (1859);  Foshay  v.  Ferguson,  5  *  Eadie  v.   Slimmon,  26  N.  Y.  9 

HiU  (N.  Y.)  154  (1843) ;  Watkins  v.  (1862) ;     Wallach    v.    Hoexter,    3 

Baird,  6  Mass.  510  (1810) ;  8.  c.  4  How.  (N.  Y.)  Pr.  K  S.  196,  198 

Am.  Dec.  170;  Severance  V.Kimball,  (1886);    Schoener   v.   Lissauer,   36 

8  N.  H.  386  (1836) ;  Richardson  v.  Him  (N.  Y.)  100  (1885). 

Duncan,  3  N.  H.  508  (1826) ;  Cum-  "  WaUach  v.  Hoexter,  3  How.  (N. 

ming  V.  Ince,  11  Ad.  &  E.  N.  S.  Y.)  Pr.  N.  S.  196  (1886).     SeeLoomis 

112,  119  (1847).  V.  Ruck,  56  N.  Y.  462  (1874) ;  Rex- 

'  Barry  v.  Equitable  Life  Assur-  ford  v.  Rexford,  7  Lans.  (N.  Y.)  6 

aace  Society,  59  N.  Y.  587  (1875) ;  (1872). 


§  375.] 


DURESS    OF   PERSOJS"    AS    A    DEFEJfOE. 


Ud 


Where  a  husband,  through  the  procurement  of  one  of  the 
payees  of  a  note  secured  by  mortgage,  threatens  that  unless 
his  wife  signs  such  note  he  will  poison  himself,  such  threat, 
being  made  to  induce  her  to  sign  the  note,  does  not  amount 
to  personal  duress  and  can  not  be  pleaded  as  a  defence  in 
an  action  to  foreclose  the  mortgage.*  The  same  has  been 
held  to  be  true  where  the  husband  was  a  defaulter,  and 
induced  his  wife  to  sign  a  mortgage  to  secure  his  sureties 
by  threatening  to  commit  suicide  rather  than  to  go  to  jail.* 
Where  a  mortgage  was  executed  by  a  wife  at  the  request 
of  her  husband,  and  she  was  impelled  to  such  execution  by 
his  declaration  that  unless  she  signed  the  deed  "  she  should 
not  live  with  him  in  peace,"  this  was  held  not  sufficient 
coercion  or  duress  to  invalidate  the  mortgage  deed.* 


•  Wallach  v.  Hoexter,  3  How.  (N. 
Y.)  Pr.  N.  S.  196  (]886);  Lord  v. 
Lindsay,  18  Hun  (K  Y. )  484 
(1879). 

*  Wright  V.  Remington,  41  N.  J. 
L.  (13  Vr.)  48  (1879) ;  8.  c.  32  Am. 


Rep.  180  ;  aff'd  43  N.  J.  L.  (14  Vt.) 
451  (1881). 

«  Lefebvre  v.  Dutruit,  51  Wis.  326 
(1881) ;  s.  c.  37  Am.  Rep.  833. 

*  Rexft)rd  v.  Rexford,  7  Lans,  (N. 
Y.)  6  (1872). 


99 


CHAPTER    XVIII. 


ANSWERS  AND  DEFENCES. 


COUNTER-CLAIMS  AND  ESTOPPELS. 


§  376.  Allegation  of  counter-claim 
or  set-off. 

877.  Counter-claim  on  contract. 

878.  Who  may  plead  a  counter- 

claim or  set-off. 

879.  Counter-claim    against    as- 

signee of  mortgage. 

880.  Requisites  of  counter-claim. 

881.  Counter-claim  must  be  a  debt 

due  and  payable. 

882.  What   are   proper    coimter- 

claims. 

383.  Other     matters    of    proper 

counter-claim. 

384.  Counter-claim  for  damages. 

385.  Counter-claim    for    damages 

for  fraud. 

886.  Counter-claim  or  set-off  must 
be  pleaded. 

387.  Estoppel  in  pais  against  the 

mortgagor. 

388.  Mortgagor     estopped    from 

denying  his  title. 

§  376.  Allegation  of  counter-claim  or  set-off.— In  an 
action  to  foreclose  a  mortgage,  in  a  court  of  equity,  the 
mortgagor  is  entitled  to  set  ofif  a  debt  due  to  him  from 
the  complainant  in  any  case  where  a  set-off  would  be  allowed 
in  an  action  at  law,'  and  also  in  peculiar  cases  of  equity  not 


389.  Estoppel  against  the  mort- 
gagor by  his  acts,  declara- 
tions and  agreements. 

890.  Estoppel  against  married 
women. 

391.  Estoppel  against  title  subse- 

quently acquired  by  mort- 
gagor. 

392.  Other  matters  as  defence  in 

estoppel — Agreement  to  re- 
lease lots. 

393.  Estoppel  by  assenting  to,  or 

encouraging  a  sale. 

394.  Estoppel    by    silence    at    a 

sale. 

395.  Estoppel    against    purchaser 

of  mortgaged  premises  sub- 
ject to  the  mortgage. 

396.  When  purchaser  subject  to 

mortgage  not  estopped. 

397.  Estoppel    against    purchaser 

subject  to  usurious    mort- 
gage. 


'  Hunt  V.  Chapman,  51  N.  T.  555 
(1873);  Real  Estate  Trust  Co.  v. 
Keech,  7  Hun  (N.  Y.)  253  (1876) ; 
Lathrop  v.  Godfrey,  3  Hun  (N.  Y.) 
739  (1875) ;  8.  c.  6  T.  &  C.  (N.  Y.) 
96;  Holden  v.  Gilbert,  7  Paige  Ch.  (N. 
Y.)  208  (1838) ;  Chapman  v.  Robert- 
Bon,  6  Paige  Ch.  (N.  Y.)  637  (1837) ; 
e.  o.  31  Am.   Dec.  264 ;  Gafford  v. 


4E0 


Proskauer,  59  Ala.  264  (1877); 
Spencer  v.  Almoney,  56  Md.  551 
(1881);  Lockwood  v.  Beckwith,  6 
Mich.  168  (1858) ;  s.  c.  72  Am.  Dec. 
62;  Allen  v.  Shackelton,  15  Ohio 
St.  145  (1864).  It  was  formerly  held 
in  New  York  that  a  defendant 
could  not  set  off  a  demand,  but  must 
resort  to  a  cross-bill  to  accomplish 


§  376.]      ALLEGCiTG    COUNTER-CLAIM    AS   DEFENCE.  451 

strictly  within  the  rules  of  law  ;'  as,  in  a  case  where  an  action 
is  brought  against  the  mortgagor  and  his  surety  on  a  note 
or  bond  secured  by  a  mortgage,  both  obligors  being  made 
defendants  and  a  judgment  being  demanded  against  both  for 
the  deficiency,  a  debt  due  to  the  mortgagor  from  the  plaintiff, 
may  be  pleaded  in  answer  by  way  of  counter-claim."  The 
fact  that  a  joint  judgment  may  be  rendered  on  a  bond  for  any 
deficiency,  will  not  exclude  the  allowance  of  a  counter-claim 
in  favor  of  one  of  the  defendants.* 

And  where  a  mortgagor  has  overpaid  the  indebtedness 
secured  by  the  mortgage,  he  will  be  entitled  to  plead  the 
over-payment  as  a  counter-claim  and  to  demand  judgment 
for  the  difference.*  The  debt  which  it  is  sought  to  set  off 
must  be  one  which  is  due  and  payable  at  the  time  of  the 
commencement  of  the  suit.*  And  to  enable  a  defendant  to 
avail  himself  of  such  set-off,  if  it  is  not  liquidated  by  judg- 
ment, he  must  set  up  such  defence  by  a  cross-bill  or  an  answer 
to  the  complaint.*  But  it  seems  that  where  junior  incum- 
brancers are  made  parties  defendant  in  a  mortgage  fore- 
closure, a  cross-bill  will  be  unnecessary,  unless  some  affirm- 
ative relief  other  than  a  simple  foreclosure  is  sought.' 

A  different  rule  prevails  in  New  Jersey,*  where,  in  an 
action  of  foreclosure,  the  mortgagor  or  his  grantee  is  not 
permitted  to  set  off  any  demand  against  the  mortgage  debt, 
except  partial  payments,  which  operate  as  a  releasepro  tanto, 
or  an  agreement  that  the  sum  desired  to  be  set  off  should  be 
received  and  credited  as  a  payment.* 


his  object ;  Troup  v.  Haight,  Hopk.  »  Holden  v.  Gilbert,  7  Paige  Ch. 

Ch.  (N.  Y.)  239  (1824).  (N.  Y.)  208  (1838). 

'  Irving  V.  DeKay,  10  Paige  Ch.  « Holden  v.  Gilbert,  7  Paige  Ch. 

(N.  Y.)  319  (1843).  (N.   Y.)  208  (1838) ;    Ward  v.  Sey 

»  Bathgate  v.   Haskin,  59  N.  Y.  mour,  51  Vt.  320  (1878). 

633  (1875).  '  Sales  v.  Sheppard,   99  111.    616 

'Bathgate  v.  Haskin,  59  N.  Y.  (1881). 

633  (1875) ;  Holbrook  v.  Receivers  «  Parker  v.  Hartt,  32  K  J.  Eq.  (5 

of  American  Fire  Ins.  Co.,  6  Paige  Stew.)  225  (1880).     See  "Williamson 

Ch.   (N.  Y.)  221   (1836) ;  Ex  parte  v.  Fox,  30  K  J.  Eq.  (3  Stew.)  483 

Hanson,  12  Ves.  346  (1806).  (1879). 

*  Conaway  v.  Carpenter,  58  Ind.  »  Dudley  v.  Bergen,  23  N.  J.  Eq. 

477  (1877).  (8  C.  E.  Gr.)  397  (1873) ;  Williams 


4:52  DEFENCE    OF    COUNTEK-CLALM.     [§§  377-378. 

§  377-  Counter-claim  on  contract. — An  action  to  fore- 
close a  mortgage  is,  in  law  and  in  fact,  an  action  to  enforce 
the  payment  of  its  amount  against  the  mortgagor  or  other 
persons  liable  for  the  debt,  by  a  sale  of  the  premises  mort- 
gaged and  an  application  of  the  proceeds  of  such  sale  to 
such  payment,  and  further,  for  a  personal  judgment  against 
the  persons  liable  for  the  deficiency,  if  any.  Such  an  action, 
being  against  the  mortgagor,  or  person  liable  upon  the  con- 
tract to  pay  the  amount  specified  in  the  note  or  bond,  is  one 
against  which  an  off-set  might  have  been  pleaded  before  the 
adoption  of  the  New  York  Code  of  Civil  Procedure,  and  is 
one  in  which  under  the  Code'  a  separate  judgment  may  be 
rendered  against  the  person  liable  for  the  debt,  and  for  that 
reason  the  suit  is  subject  to  a  counter-claim  for  any  other 
cause  of  action  arising  on  a  contract,  which  the  person  liable 
for  the  payment  of  the  debt,  or  on  whose  property  the  mort- 
gage is  a  lien,  has  against  the  plaintiff  at  the  time  of  the 
commencement  of  the  action  to  foreclose.' 

§  378.    Who  may  plead  a  counter-claim  or  set-off. — In 

an  action  to  foreclose  a  mortgage  a  defendant  who  is  person- 
ally liable  for  the  debt,  or  whose  land  is  bound  by  the  lien  of 
the  mortgage,  may  plead  any  off-set  arising  on  a  contract  to 
reduce  or  extinguish  the  claim  ;'  but  in  order  to  en&ble  the 
defendant  to  set  up  a  counter-claim  and  to  demand  judgment 
upon  it,  he  must  be  personally  h'able  to  the  plaintiff,  or  claim 
some  interest  in  the  mortgaged  premises.  Where  such  per- 
sonal liability  is  not  in  question,  and  where  the  defendant 
disclaims  all  interest  in  the  mortgaged  premises,  he  will  not 
be  permitted  to  plead  a  counter-claim  or  set-off,*  because  his 


V.  Doran,  23  X.  J.  Eq.  (8  C.  E.  Gr.)  Co.  v.  McKay,  21  N.  Y.  191  (1860) ; 

385  (1873) ;  Bird  v.  Davis,  14  K  J.  Folden  v.  Gilbert,  7  Paige  Ch.  (N.  Y.) 

Eq.  (1  McCart.)  467  (1862) ;  Dolman  208  (1838) ;  Chapman  v.  Robertson, 

V.  Coolc.  14  N.   J.   Eq.  (1  McCart.)  6  Paige  Ch.  (N.  Y.)  627  (1837) ;  8.  c. 

56  (1861) ;  White  v.  Williams,  3  N.  31  Am.  Dec.    264.     See  Harrison  v. 

J.  Eq.  (2  H.  W.  Gr.)  876  (1836).     See  Bray,  92  K  C.  488  (1885). 

Petat  V.  Ellis,  9  Ves.  562  (1804).  »  Lathrop  v.  Godfrey,  3  Hun  (N. 

'  X.  Y.  Code  Civ.  Proc.  §g  501,  507.  Y.)  739  (1875);   8.  c.  6  T.  &  C.  (N. 

«  Bathgate  v.   Haskin,   59  N.  Y.  Y.)  96. 

533  (1875);  Hunt  v.    Chapman.  51  ^  National  Fire  Ins.  Co.  v.  McKay, 

N.  Y.  555  (1873) ;  National  Fire  Ins.  21  N.  Y.  191,  196  (1860). 


§  379.]         WHO    MAY    PLEAD    A    COUNTEK-CLAIM.  453 

counter-claim  must  in  some  way  tend  to  reduce  or  to  defeat 
the  plaintiff's  demand  in  order  to  be  admissible.  And  where  a 
defendant  is  not  personally  liable  for  the  mortgage  debt,  his 
right  to  plead  a  counter-claim  is  said  to  be  limited  to 
matters  arising  out  of  the  subject  of  the  action.*  This  rule 
does  not  apply,  however,  where  a  defendant  owning  the 
equity  desires  to  set  up  a  claim  which  he  has  against 
the  plaintiff,  in  order  that  his  demand  may  offset  a  portion 
of  the  mortgage  lien  upon  his  estate. 

Where  the  complainant  in  an  action  to  foreclose  a  mort- 
gage is  insolvent,  and  the  respondent,  who  owns  the  equity 
of  redemption,  but  who  is  not  the  original  mortgagor,  has  a 
claim  against  him  personally,  such  claim  may  be  set  off 
against  the  mortgage  debt.'  The  insolvency  of  the  com- 
plainant presents  a  case  where  "  natural  equity "  is  very 
strong.  Insolvency  will  often  raise  an  equity  which  will 
justify  the  interference  of  a  court,  even  where  the  party 
desiring  the  set-off  is  himself  the  petitioner;  and  such  insol- 
vency will  have  greater  force  if  the  party  opposing  such 
equity  is  before  a  court  seeking  relief.' 

In  cases  where  a  senior  mortgagee  is  made  a  defendant  in 
a  suit  to  foreclose  a  junior  mortgage,  he  may,  by  counter- 
claim, foreclose  his  senior  mortgage.* 

§  379-  Counter-claim  against  assignee  of  mortgage.— 
Where  an  action  to  foreclose  a  mortgage  is  brought  in  the 
name  of  a  person  other  than  the  real  owner  of  the  mortgage, 
the  mortgagor,  or  owner  of  the  equity  of  redemption,  may 
plead  in  answer  any  defence  or  set-off  which  he  has  against  the 
real  owner  of  the  mortgage ;'  the  defendant  may  also  show 


'  Agate  V.  King,   17  Abb.  (N.  T.)  Chamberlain    v.    Stewart,    6   Dana 

Pr.  159  (1863).  See  Bennett  v.  Bates,  (Ky.)  32  (1837).  Blake  v.  Langdon,19 

26  Hun  (K  Y.)  364  (1882).  Vt.  485  (1847);  s.  c.  47  Am.  Dec.  701 ; 

>  Goodwin  v.  Keney,  49  Conn.  563  Foot  v.  Ketchum,  15  Vt.  258  (1843) ; 

(1882).  6.  c.  40  Am.  Dec.  678. 

«  Lindsay  v.  Jackson,  2  Paige  Ch.  *  ^tna  Life  Ins.  Co.  v.  Finch,  84 

(N.  Y.)  581  (1831).    See  Rowan  v.  Ind.  301  (1882). 

Sharp's  Rifle  Manufacturing  Co.,  29  'Spear  v.  Hadden,  31  Mich.  265 

Conn.  282  (1860) ;  e.  c.  31  Conn.  1  ;  (1875).      See  Chase   v.    Brown,    33 

Bowen  v.  Bowen,20  Conn.  127  (1849);  Mich.  225  (1875). 
Pond  V.  Smith,  4  Conn.  297  (1822)  ; 


454:  COUlfTEE-CLAIM   AGAINST   ASSIGNEE.  [§380. 

that  the  plaintiff  has  received  only  a  colorable  or  fraudulent 
assignment  of  the  mortgage,  and  that  he  holds  it  for  the 
benefit  of  one  against  whom  the  set-off  or  counter-claim 
would  be  a  valid  defence.* 

The  assignee  of  a  mortgage  takes  it  subject  to  all  equit- 
able claims  existing  in  favor  of  the  mortgagor,  or  of  his 
grantees,  at  the  time  of  the  assignment  ;*  and  where  a  party 
holds  an  executory  contract  for  the  conveyance  to  him  of 
certain  premises  subject  to  a  mortgage,  it  will  be  a  good 
defence  to  an  action  of  foreclosure  brought  by  an  assignee 
of  the  mortgage,  that  the  defendant  had,  before  the  assign- 
ment of  the  mortgage,  rendered  services  for  the  mortgagee 
which  he  had  agreed  to  apply  upon  the  mortgage  in  reduc- 
tion of  the  amount  due  thereon.*  But  where  services  are 
rendered  under  a  contract  that  they  are  to  be  applied  in 
partial  or  complete  payment  and  discharge  of  a  mortgage, 
they  will  not  constitute  an  absolute  payment  pro  tanto,  but 
will  only  give  a  claim  in  set-off,  which  will  be  subject  to  the 
bar  of  the  statute  of  limitations,  the  same  as  any  other  coun- 
terclaim or  set-off.* 

§  380.  Requisites  of  counter-claim. — To  entitle  the 
defendant  to  a  counter-claim  or  set-off,  under  the  New  York 
Code  of  Civil  Procedure,  the  claim  must  be  one  existing  in 
favor  of  the  defendant  and  against  the  plaintiff,  tending 
in  some  way  to  diminish  or  defeat  the  plaintiff's  recovery  ;*  an 
independent  claim  of  the  defendant  can  not  be  pleaded  in 
answer.'  Thus,  where  an  action  is  brought  to  foreclose  a 
mortgage,  in  which  the  principal  debtor  and  his  sureties  are 
made  parties  defendant,  and  a  personal  judgment  for 
deficiency   is   asked   against    them,  a  claim   due    from  the 


'  Lathiop  V.  Godfrey,  3  Hun  (N.  ••  Ballow  v.   Taylor,  14  R.  I.   27 

Y.)  739  (1875) ;  8.  C.  6  T.  &  C.  (N.  277,    280    (1883).      See    Doody    v. 

Y.)  96.  Pierce,  91  Mass.  (9  Allen),  141  (1864). 

"  Hartley  v.  Tatham,  1  Robt.  (K  »  N.  Y.  Code  Ciy.  Proc.  §  501. 

Y.)  246  (1863) ;    a  C.  24  How.  (N.  •  National  Fire  Ins.  Co.  v.^McKay, 

Y.)  Pr.  505.  21  N.  Y.  191  (1860).     See  White  v. 

»  Hartley  v.  Tatham,  1  Robt.  (N.  Williams.  3  N.  J.  Eq.  (2  H.  W.  Gr.) 

Y.)  246  (1863) ;  s.  c.  24  How.  (N.  376  (1836). 
Y.)  Pr.  505. 


§  381.]  REQUISITES    OE    COUNTEE-CLAIM.  455 

plaintiff  to  the  principal  debtor  may  be  allowed  to  offset 
the  amount  due  upon  the  mortgage.'  It  is  said  that  the 
several  judgment  required  by  the  Code  may  be  a  judgment 
for  only  a  part  of  the  relief  sought,  so  as  to  extinguish  the  right 
of  one  of  the  defendants  in  the  land,  and  that  the  fact  that 
a  joint  judgment  may  also  be  given  does  not  exclude  the 
allowance  of  a  counter-claim.' 

It  is  held  in  some  states,  that  to  entitle  the  defendant  to 
set  off  against  the  mortgage  debt,  any  payment  made  by 
him  upon  the  mortgage,  he  must  plead  and  show  that  it  was 
made  in  direct  payment  of  part  of  the  debt,  or  that  it 
was  agreed  that  the  sum  should  be  received  and  credited  on 
account  of  the  mortgage  ;'  for  it  is  a  well  settled  principle, 
that  where  a  partial  payment  is  made  by  a  person  indebted 
on  more  than  one  account,  if  there  is  no  actual  application  of 
the  payment  by  the  debtor  at  the  time  to  a  particular 
indebtedness,  the  creditor  may  apply  it  as  he  pleases.* 

§  381.  Counter-claim  must  be  a  debt  due  and  payable. 
— To  entitle  a  defendant  to  offset  a  debt  as  a  counter-claim, 
it  must  be  due  to  him  from  the  plaintiff  at  the  time  the 
foreclosure  suit  is  commenced.'  And  where  a  claim  sought 
to  be  set  off  is  for  damages  not  yet  liquidated,'  it  will 
generally  not  be  allowed,  if  the  defendant  has  an  adequate 
remedy  at  law.'  Thus,  in  a  suit  to  foreclose  a  mortgage 
securing  a  note  given  for  part  of  the  purchase  price  of  real 
estate,  an  answer  has  been  held  insufficient  which  merely 
sets  up  a  breach  of  a  covenant  of  warranty  in  the  deed  by 


>  Bathgate  v.  Haskin,  59  K   Y.  (1861) ;  White  v.  Williams,  3  K  J. 

533(1875).  SeeHolbrookv.  Receivers  Eq.  (2  H.  W.  Gr.)  376  (1836). 

of  Am.  Fire  Ins.  Co.,  6  Paige  Ch.  *  Bird  v.  Davis,  14  N.  J.  Eq.  (1 

(:>(.  Y.)  220  {18'dQ);  Ex  parte  Il-dnsou,  McCart.)  467  (1863).      See   1   Am. 

13  Ves.  346  (1806).  Lead.  Cas.  (oth  ed.)  339,  side  paging 

2  Bathgate  v.   Haskin,   59  N.    Y.  276. 

533,  540  (1875).  ^  Knapp  v.  Birnliam,  11  Paige  Ch. 

3  Dudley  v.  Bergen,  23  N.  J.  Eq.  (N.  Y.)  330  (1844)  ;  Holden  v.  Gil- 
(8  C.  E.  Gr.)  397  (1873)  ;  Williams  bert.  7  Paige  Ch.  (N.  Y.)  208  (1838). 
V.  Doran,  33  N.  J.  Eq.  (8  C.  E.  Gr.)  «  See  Bennett  v.  Bates,  26  Hun 
385  (1873) ;  Bird  v.  Davis,  14  N.  J.  (N.  Y.)  364  (1882). 

Eq.  (1  McCart.)  467  (1862) ;  Dolaa  '  Ilattier  v.  Etinaud,  3  Desaus  (S. 

V.  Cook,  14  N.  J.  Eq.  (1  McCart.)  56  C.)  Eq.  570  (1S08). 


456  WHAT   ARE   PEOPER    COUNTER-CLAIMS.         [§382. 

which  the  land  was  conveyed  to  the  defendant,  by  reason  of 
an  alleged  lien  of  a  gravel  road  tax  on  the  premises,  and 
asks  that  the  amount  of  such  tax  be  deducted  from  the 
note,  but  which  does  not  state  that  the  defendant  has  paid 
such  tax,  or  that  he  has  been  in  any  way  damaged  ;  and 
which  fails,  also,  to  allege  facts  showing  that  the  tax  set  out 
is  a  valid  and  binding  lien  upon  the  property  under  the 
existing  statutes  providing  for  such  a  tax.'  Under  the  code 
practice  in  some  of  the  states,  however,  such  a  claim  may  be 
allowed. 

Where  there  are  several  suits  to  foreclose  different  mort- 
gages, the  defendant  can  not  be  compelled  to  elect  in  which 
suit  he  will  set  up  his  counter-claim.* 

§  382.  What  are  proper  counter-claims. — A  debt  due 
from  a  complainant  to  a  defendant  at  the  time  of  filing  a 
complaint  for  foreclosure,  or  when  a  subsequent  installment 
of  the  mortgage  becomes  due  and  is  attempted  to  be 
enforced,  is  a  proper  counter-claim  or  set-off.*  Illegal  interest 
paid  upon  a  mortgage  or  included  in  it,  is  a  valid  set-off  in  an 
action  to  foreclose  the  mortgage  ;*  and  where  the  mortgagor 
has  paid  a  bonus  in  addition  to  the  lawful  interest  to  procure 
an  extension  of  time  within  which  to  pay  the  debt,  the 
amount  so  paid  in  excess  of  the  legal  rate  of  interest,  is  a 
proper  set-off  in  an  action  to  foreclose  the  mortgage.* 

Mere  delay  in  foreclosing  a  mortgage,  where  there  has 
been  no  request  or  notice  to  foreclose,  and  the  interest 
has  been  kept  up,  is  not  enough  to  charge  upon  the  mort- 
gagee the  loss  occasioned  by  a  depreciation  in  the  value  of 
the  mortgaged  premises ;  and  such  loss  can  not  be  set  up  as 
a  defence  by  way  of  counter-claim.* 

In  an  action  brought  to  foreclose  a  mortgage  for  $25,000, 
the  defendant  alleged  in  his  answer  that  at  the  time  of  its 


'  Cook    V.    Fuson,    66    Ind.    521  522  (1866) ;  Pond  v.  Causdell,  23  N. 

(1879).  J.   Eq.   (8  C.   E.    Gr.)   181   (1872); 

«  McLane  v.  Geer,  8  Edw.  Ch.  (N.  Ward  v.  Sharp,  15  Vt.  115  (1843). 
Y.)  245  (1838).                             '  6  Real  Estate  Trust  Co.  v.  Keech, 

«  Holden  v.  GUbert,  7  Paige  Ch.  7  Hun  (N.  Y.)  253  (1876) ;  Dunlap's 

(N.  Y.)  208  (1838).  Adm'r  v.  Mueller,  1  Cin.  Supr.  Ct. 

*  Harbison  v.  Houghton,  41  HI.  Rep.  (Ohio),  486  (1871). 


§  383.]         WHAT   ARE   PKOPER   COUNTEE-CLAIMS.  457 

execution,  he,  being  desirous  of  purchasing  certain  real  estate, 
borrowed  $38,000  of  the  plaintiff,  to  be  secured  by  mortgage 
on  the  premises  to  be  purchased  ;  that  subsequently,  at  the 
plaintiff's  request,  he  executed  the  mortgage  sought  to  be 
foreclosed  upon  half  of  the  premises,  and  an  absolute  deed  of 
the  other  half,  which  it  was  agreed  should  be  in  fact  a 
mortgage  to  secure  the  remaining  $13,000;  and  that  the 
plaintiff  never  claimed  that  the  deed  was  an  absolute  con- 
veyance. The  defendant  then  prayed  to  be  allowed  to  pay 
the  $38,000  and  all  interest  due  thereon,  and  to  have  the  deed 
canceled  and  the  mortgage  satisfied  of  record.  The  court  held 
that  the  cause  of  action  alleged  in  the  answer  arose  out  of  the 
contract  or  transaction  set  forth  in  the  complaint  and  consti- 
tuted a  proper  counter-claim.' 

§  383.     Other  matters  of  proper  counter-claim. — In  an 

action  on  one  of  a  series  of  notes  secured  by  mortgage,  the 
defendant  answered,  setting  up  the  invalidity  of  the  fore- 
closure proceedings  upon  another  note  of  the  same  series, 
and  asked  that  he  might  be  allowed  to  redeem  ;  the  court 
held  that  the  matter  set  out  in  the  answer  constituted  a  good 
counter-claim,  and  that  the  defendant  was  entitled  to  the  relief 
asked.'  Where  in  an  action  to  foreclose  a  mortgage,  the  answer 
alleged,  "  as  a  separate  defence  and  counter-claim,"  that  the 
mortgagee  had  been  in  possession  of  the  premises  under  an 
agreement  to  apply  the  profits  to  the  payment  of  the  mort- 
gage debt,  and  stated  the  amount  of  profits  received  by  the 
plaintiff,  the  court  held  that  whether  such  facts  constituted 
a  counter-claim  or  not,  evidence  thereof  was  admissible 
under  the  answer  as  showing  payment/^*?  tanto*  The  reason 
for  this  would  seem  to  be,  that  a  payment  of  money  made  on 
account  of  a  mortgage  is  not  a  cause  of  action  which  must 
be  pleaded  by  the  defendant  as  a  counter-claim  in  order  to 
enable  him  to  prove  it  in  a  suit  to  foreclose  the  mort- 
gage.* 

•  Merchants'  Ins.  Co.  v.  Hinman,  *  Fonts  v.    Mann,   15   Neb.    173 

34  Barb.  (N.  T.)  410  (1861) ;  s.  c.  13  (1883). 

Abb.  (N.  Y.)  Pr.  110.  ^  Yoy6.  v.  Smith,  60  Wis.  222(1884). 

'  Bernheimer  v.   Willis,   11  Hun  *  Ilendrix  v.    Gore,  8  Oreg.  4C8 

(N.  Y.)  16  (1877).  (1880). 


458  WHAT  Ar.E  proper  counter-claims.       [§383. 

It  has  been  said  that  where  the  plaintiff  in  a  mortgage 
foreclosure  suit  is  insolvent,  and  the  defendant  who  owns 
the  equity  of  redemption,  but  is  not  the  original  mortgagor, 
has  a  claim  against  him  personally,  such  claim  may  be  set 
off  against  the  mortgage  debt.' 

When  an  answer  sets  up  facts  tending  to  show  that  a 
mortgage  sought  to  be  enforced  is  invalid,  such  facts  do  not 
constitute  a  counter-claim  which  calls  for  a  reply.'  Thus, 
where  an  answer  sets  up  facts  tending  to  show  that  a  bond 
or  note  and  mortgage  sued  upon  are  void  for  usury  and  asks 
that  they  be  delivered  up  to  be  canceled,  without  explicitly 
stating  that  such  facts  are  alleged  as  a  counter-claim,  such  an 
allegation  wall  not  constitute  a  counter-claim,  but  merely  a 
defence  to  the  action,  and  no  reply  will  be  required.' 

To  entitle  the  defendant  to  set  up  a  counter-claim  it  must 
be  based  upon  a  legal  obligation,  and  not  merely  upon  an  equi- 
table or  supposed  right.  Thus,  in  an  an  action  to  foreclose 
a  mortgage  executed  by  a  gas  light  company,  another  gas 
light  company,  which  had  succeeded  to  the  rights  of  the  mort- 
gagor, set  up  a  counter-claim  in  substance,  that  A.,  the  real 
principal  for  whom  plaintiff  acted,  and  certain  associates  of 
his,  who  were  stockholders  of  defendant,  and  also  of  certain 
other  gas  light  companies,  all  of  whom  were  interested  in 
certain  patents,  requested  and  instigated  defendant  to  make 
experiments  to  test  the  value  of  such  patents,  and  that  by  the 
aid  of  such  services  the  other  corporations  were  enabled  to 
sell  the  rights  owned  by  them  for  a  large  price ;  defendant 
did  not  allege  an  express  agreement  or  promise  to  pay  for 
such  services,  but  claimed  an  implied  promise  from  the  fact 
of  the  request  and  the  benefits  derived.  The  court  held  the 
claim  untenable,  and  that  the  facts  did  not  constitute  a 
counter-claim.* 


'  Goodwin    v.    Keney,   49  Conn.  »  Bartiiett  v.  Elias,  2  Abb.  (N.  T.) 

.-j63(1882).  Pr.    N.    C.    3G4    (1877);     Equitable 

«  Yasser  v.  Livingstone,  13  X.  T.  Life  Association  v.  Cuyler,  12  Hun 

348  (1855).     See  Bates  v.  Rosekans,  (N.  Y.)  247  (1877)  ;  aff'd  75  N.  Y. 

37  N.  Y.  409(1867) ;  Agate  v.  Keen,  511. 

17  Abb.  (N.  Y.)  Pr.  159  (18G2);  Caryl  *  Davidson  v.  W.  G.  L.  Co.,  99  N 

V.  WilUama,   7  Laua.    (N.    Y.)  41'J  Y.  558  (1885). 
..S73). 


§  384.]  COUNTEE-CLAIM   TOE    DAMAGES.  459 

The  New  York  Code  of  Civil  Procedure  requires  that 
where  a  defendant  deems  himself  entitled  to  an  affirmative 
judgment  against  the  plaintiff,  he  must  demand  such  judg- 
ment in  his  answer.*  The  same  rule,  it  seems,  prevails  in 
New  Jersey.* 

§  384.  Counter-claim  for  damages.  —  In  an  action 
brought  by  a  vendor  to  foreclose  a  mortgage  given  for 
the  purchase  money  of  real  estate  conveyed  by  a  deed  of 
general  warranty,  the  vendee  and  mortgagor  may  set  up  as 
a  defence  and  counter-claim  for  damages,  failure  of  title 
to  the  property;*  but  if  the  defendant  has  been  in 
possession  of  the  premises,  he  will  not  be  entitled  to 
interest  in  estimating  the  damages  sustained  because  of 
such  failure  of  his  title,  although  a  judgment  in  ejectment 
may  have  been  recovered  against  him.*  In  such  an  action, 
the  mortgagor,  as  a  defence,  may  set  up  a  counter-claim  for 
damages  by  reason  of  the  fraud  of  the  mortgagee  and  vendor 
in  concealing  from  him  material  facts  as  to  the  situation  and 
extent  of  the  premises.*  And  in  an  action  against  a  mortgagor 
upon  a  purchase  money  mortgage,  he  will  be  entitled  to 
set  up  as  a  defence  a  counter-claim  for  any  excess  of  the 
agreed  price  paid  through  the  vendor's  misrepresentations 
of  the  extent  of  the  property,  whether  such  misrepresenta- 
tions were  willful  or  innocent.* 

Where  a  grantor  of  lands  by  fraud  induces  a  mortgagor 
to  purchase  a  defective  title,  and  to  execute  a  mortgage  secur- 
ing  part  of  the  purchase  money,  the  mortgagor  will  be  en- 
titled, in  an  action  to  foreclose  such  mortgage,  to  recoupment 
to  the  extent  of  his  actual  damages ;  and  if  such  damages 
are  equal  to  or  exceed  the  amount  of  the  mortgage,  they 
will  constitute  an  entire  defence  to  the  foreclosure.'    Where 


»  N.  T.  Code  Civ.  Proc.  §  509.  »  Pierce  v.  Tiersch,  40  Ohio  St. 

•  See  Emley  v.  Mount,  32  K  J.  168  (1883) ;  Allen  v.  Shackelton,  15 
Eq.  (5  Stew.)  470  (1880).  Ohio  St.  145  (1864).     See  post  §  435. 

»  Chambers  v.  Cox,  23  Kan.  393  «  Baughman  v.  Gould,  45  Mich. 

(1880) ;   Wacker  v.   Straub,  88  Pa.  481  (1881) ;    Pierce  v.   Tiersch.   40 

St.  32(1878).    See^josi;  §§435,436.  Ohio  St.  168,  172  (1883).     Sae  post 

*  Wacker  v.  Straub,  88  Pa.  St.  32  §§  435,  436. 

(187b).  '  Greene  v.  Tallman,  20  N.  Y.  191 


460  COUNTEE-CLAIM   FOR    DAMAGES.  [§385. 

the  defect  of  title  extends  only  to  a  part  of  the  lands,  it 
M'ill  constitute  a  breach  of  the  covenant  of  seizin,  if  not 
also  of  the  covenant  of  warranty,  and  a  counter-claim 
for  damages  for  such  breach  will  be  a  proper  defence  in  an 
action  to  foreclose  a  purchase  money  mortgage  thereon.' 

§  385.  Counter-claim  for  damages  for  fraud. — Where 
a  mortgage  is  given  for  a  portion  of  the  purchase  money  of 
lands,  a  subsequent  grantee  who  has  assumed  the  payment 
of  such  mortgage  may  interpose  a  counter-claim  for  damages 
for  fraud  and  misrepresentation  in  the  sale  of  the  property 
to  the  mortgagor,  made  to  induce  him  to  purchase."  But 
where  there  is  no  allegation  of  fraud,  and  no  personal  claim 
is  made  against  the  grantee  of  the  mortgagor,  he  can  not 
set  up,  by  way  of  answer,  that  he  purchased  the  prem- 
ises of  the  plaintiff's  grantee  and  was  the  assignee  of  the 
plaintiff's  covenants  of  warranty  and  against  incumbrances, 
and  had  been  evicted  by  a  paramount  title  acquired  under  a 
sale  for  certain  taxes  which  were  incumbrances  at  the  time 
of  the  plaintiff's  grant.  In  such  a  case  the  grantee  will  be 
confined  to  his  remedy  by  an  action  at  law.'  And  a  pur- 
chaser from  a  mortgagor  can  not  set  up  as  a  counter-claim 
the  fraud  practiced  upon  him  by  a  pefson  other  than  the 
plaintiff  after  the  execution  of  the  mortgage,  where  there  is 
nothing  to  connect  the  plaintiff  with  the  fraud  of  the 
mortgagor.* 

A  mortgage  executed  as  security  for  advances  is  valid  only 
for  the  amount  of  the  advances  actually  made,  and  the  mort- 
gage will  be  a  lien  to  the  extent  of  the  amount  actually  due 


(1859);   B.    c.   75    Am.    Dec.    384;  Latham    v.    McCann,   3   Neb.   276 

Ludington  v.   Slauson,   38    N.    Y.  (1872). 

Supr.    Ct.    (6  J.  &   S.)   81   (1874) ;  «  See  Reed  v.  Latson,  15  Barb.  (N. 

Lathrop  v.  Godfrey,  3  Hun  (N.  Y.)  Y.)  9  (1853). 

739  (1875);  s.  c.  6  T.  &  C.  96;  Abbott  »  National  Fire  Ins.    Co.   v.   Mc- 

V.  Allen,  2  Johns.  Ch.  (N.  Y.)  519  Kay,  21  N.  Y.  191  (1860) ;  Greene  v. 

(1817) ;  8.  c.  7  Am.  Dec.  554;  Parker  Tallman,    20    N.    Y.    191     (1859) ; 

V.  Hartt,  32  N.  J.  Eq.  (5  Stew.)  225  Abbott  v.  Allen,  2  Johns.  Ch.  (N. 

(1880).  Y.)  519  (1817). 

•  Tallmage  v.  Wallace,  25  Wend.  *  Reed  v.  Latson,  15  Barb.  (N.  Y.) 

(N.  Y.)  107  (1840);  Rice  v.  Goddard.  0  (1853). 
31    Mass.    (14    Pick.)    293    (1833); 


§§  386-387.]   COUNTER-CLAIM  MUST  BE  PLEADED.  461 

upon  the  mortgage ;  and  the  mortgagee's  failure  to  complete 
the  contemplated  advances,  will  afford  ground  for  merely 
nominal  damages  by  way  of  set-off,  although  the  mortgagor 
may  be  seriously  injured  by  the  failure  of  the  mortgagee 
to  advance  the  stipulated  amount,'  except  in  cases  where 
there  is  an  express  agreement  by  the  mortgagee  to  make 
an  advancement  of  the  full  amount  stipulated. 

But  where  the  mortgage  contains  a  covenant  on  the  part 
of  the  mortgagee  to  release  portions  of  the  premises  on  sales 
thereof  made  by  the  mortgagor,  he  will  be  entitled,  on 
breach  of  such  covenant,  to  damages  sustained  by  reason 
of  such  refusal,  which  damages  will  constitute  an  equitable 
set-off  in  an  action  to  foreclose  the  mortgage." 

§  386.    Counter-claim  or   set-off  must  be  pleaded. — 

Where  a  grantor  brings  an  action  to  foreclose  a  mortgage 
executed  to  secure  purchase  money,  to  enable  the  defendant 
to  avail  himself  of  a  set-off  or  counter-claim  not  liquidated 
by  judgment,  he  must  set  up  such  defence  by  answer  to  the 
complaint.'  Thus,  where  one  of  the  grantors  of  land  sued 
on  bonds  for  the  purchase  money,  of  which  he  was  the  sole 
owner,  an  objection  to  a  counter-claim  for  breach  of  cove- 
nants on  the  ground  that  the  other  grantor  was  not  a 
party,  must  be  taken  by  answer  or  demurrer  or  it  will  be 
waived.* 

§  387.  Estoppel  in  pais  against  the  mortgagor. — In  an 
action  to  foreclose  a  mortgage  the  defendant  is  estopped  by 
his  deed  from  denying  the  validity  of  his  title  to  the  mort- 
gaged property,  and  an  answer  setting  up  the  defence  that 
the  mortgage  is  of  no  effect  and  constitutes  no  lien  upon  the 
premises  described  in  the  complaint,  is  unavailing  because 
it  pleads  no  facts ;  it  is  merely  a  statement  of  a  conclu- 
sion of  law.'     And  where  a  mortgage  of  land  purports  to 


>  Dart  V.  McAdam,  27  Barb.  (N.  110  (1866).     See  also  Cummings  v. 

Y.)  187  (1858).    See  ante  §§  340,  341.  Morris,  25  N.  Y.   625  (1862) ;  Schu- 

*  Warner  v.  Gouverneur's  Ex'rs,  1  bert  v.  Harteau,  34  Barb.   (N.   Y.) 
Barb.  (N.  Y.)  36  (1847).  449  (1861) ;     Briggs  v.    Briggs,    20 

»  Holden  v.  Gilbert,  7  Paige  Ch.  Barb.  (N.  Y.)  477  (1855). 

(N.  Y.)  208  (1838).  »  Caryl  v.  Williaim,  7  Lans.  (N. 

*  Ackerly  v.  Villas,  21  Wis.  88,  Y.)  416  (1873). 


462  DEFENCE    OF   ESTOPPEx,.  [§387. 

convey  the  fee,  any  title  afterwards  acquired  by  the  mort- 
gagor will  strengthen  the  mortgage  and  inure  to  the  benefit 
of  the  mortgagee.  This  is  true,  although  the  title  to  the 
property  was  in  the  government  of  the  United  States 
when  the  mortgage  was  executed,  and  was  acquired  by  the 
mortgagor  after  a  foreclosure  of  the  mortgage.'  And  it  has 
been  held  that  a  mortgage  upon  real  property  containing  the 
usual  covenants  of  warranty,  executed  by  a  person  who  sub- 
sequently becomes  entitled  to  an  estate  in  remainder  therein, 
will  attach  to  and  may  be  enforced  against  such  after-acquired 
estate  ;  but  such  mortgage  can  not  affect  the  rights  of  a  party 
holding  an  estate  for  life  in  the  property,  and  who  wai 
in  the  actual  possession  thereof  when  the  mortgage  wat 
executed." 

It  has  been  held  that  a  mortgagor  is  estopped  from  alleg- 
ing in  his  answer  by  way  of  defence,  that  the  notes  and 
mortgage,  while  executed  to  the  plaintiff,  were  as  a  matter 
of  fact  given  for  goods  purchased  of  a  mercantile  firm,  of 
which  he  was  a  member,  and  were  the  property  of  such 
firm,  and  that  the  partners  of  such  firm  had  made  no  assign- 
ment of  their  interest  therein  to  the  plaintiff.* 

In  an  action  to  foreclose  a  mortgage,  the  mortgagor  can  not 
be  heard  to  complain  of  an  indefinite  description  of  the 
mortgaged  property,  whatever  may  be  the  effect  of  a  sale 
under  such  a  description.*  A  mortgagor  is  estopped  from 
denying  that  his  mortgage  in  fact  covers  all  that  it  was 
supposed  to  cover,  or  all  that  the  parties  believed  or  intended 
that  it  should  cover.*  And  one  who  deals  with  a  foreign 
corporation  by  borrowing  its  money  and  executing  a  mort- 
gage as  security  therefor,  will  be  estopped  from  answering 
that  the  plaintiff  had  no  authority  to  loan  money  where  the 
mortgaged  premises  were  situated,  unless  he  shows  that  the 
corporation  violated  its  charter  or  that  some  law  prohibited 


•  Orr  V.Stewart,  67  Cal.  275(1885).  ing  ▼.  Stamper,  18  B.  Mon.  (Ky.) 

'  Iowa    Loan    &    Trust    Co.     v.  175  (1857). 

King,  58  Iowa,  598  (1882).  ••  Graham  v.  Stewart,  68  Cal.  374 

3  French  v.    Bhmchard,  16    Ind.  (1886). 

143  (1 861) ;  Trumble  v.  The  State,  4  »  Madaris  v.  Edwards,   33  Kan. 

Black f.  (lud.)  435  (1837).  See  Breed-  884  (1884). 


§  388.]  MOKTGAGOE    CAN    NOT    DENT    TITLE.  463 

the  loan.'  But  the  holder  of  one  of  two  notes  secured  by  a 
mortgage  will  not  be  estopped  from  contesting  the  validity 
of  the  other  note,  where  the  notes  were  executed  to  different 
persons  upon  different  considerations.' 

A  mortgagor  is  estopped  from  denying  the  recitals  con- 
tained in  his  mortgage  ;*  but  it  was  held  in  a  case  where  the 
mortgage  recited  that  it  was  a  purchase  money  mortgage, 
when  in  fact  it  was  not  for  purchase  money,  that  the  wife's 
right  of  dower  was  not  affected  by  such  a  recital.* 

§  388.  Mortgagor  estopped  from  denying  his  title. — A 
party  who  mortgages  his  property  with  covenants  of  title  is 
estopped  from  pleading  in  defence  to  a  foreclosure,  that  at  the 
time  of  the  execution  of  the  mortgage  he  had  no  title  to,*  nor 
interest  in,*  the  mortgaged  premises,  or  any  part  thereof ; 
neither  can  he  set  up  as  a  defence  a  defect  in  his  title,'  or  the 
existence  of  an  outstanding  paramount  title  in  a  third  person^ 
because  he  is  estopped  therefrom  by  his  deed  and  will  not  be 
permitted  to  claim  adversely  to  it.*  Thus,  a  mortgagor  is 
estopped  from  pleading  in  defence  that  the  property  mort- 
gaged is  trust  property  and  that  he  had  no  right  to  mortgage 
jt.*  And  where  upon  a  conveyance  of  land  to  an  executor 
as  such,  he  gives  back  a  purchase  money  mortgage  as  execu- 
tor, the  mortgagor,  his   grantees   and  all  persons  claiming 


'  Pancoast  v.  Travelers'  Ins.  Co.,  '  Dime   Sav.  Bank  v.  Crook,   29 

79  Ind.  173  (1881).  Hun  (N.  Y.)  671  (1883). 

«  Coleman  V.  Witherspoon,  76  Ind.  *  Tefft  v.  Munson,  57  N.  T.  97 

285  (1881).  (1874) ;  Bank  of  Utica  v.  Mersereau, 

8  Neal  V.  Perkerson,  61  Ga.  345  3  Barb.  Ch.  (N.  Y.)  528,  567  (1848) ; 

(1878).  Jackson  v.  Bull,  1  Johns.  Cas.  (N. 

*  Taylor  v.  Post,  30  Hun  .(N.  Y.)  Y.)  81,  90  (1799);  Strong  v.  Waddell, 

446  (1883).  56  Ala.  471  (1876) ;  Usina  v.  Wilder, 

»  Strong  V.  Waddell,  56  Ala.  471  58  Ga.  178  (1877) ;  Pike  v.  Galvin, 

(1876) ;    Boone    v.    Armstrong,    87  29  Me.  183  (1848) ;  White  v.  Patten, 

Ind.  168  (1882) ;  Pancoast  v.  Travel-  41    Mass.    (24    Pick.)    324    (1837) ; 

ers'    Insurance    Co.,    79    Ind.    172  Somes  v.  Skinner,  20  Mass.  (3  Pick.) 

(1881).     See  post  %iZl.  52  (1825);  Wark  v.  Willard,  13  N. 

«  Sutlive    v.   Jones,   61    Ga.    679  H.  389  (1843) ;  Kimball  v.  Blaisdell, 

(1878) ;  Usina  v.  Wilder,  58  Ga.  178  5   N.    H.    533  (1831) ;  Macloon    v. 

(1877) ;    Allen  v.   Lathrop,   46  Ga.  Smith,  49  Wis.  200  (1880). 

133  (1872) ;  Boisclair  v.   Jones,   36  »  Boisclair  v.   Jones,  36  Ga.  499 

Ga.  499  (1867).  (1867). 


464  ESTOPPEL    AGAESrST   MORTGAGOR.  [§  389. 

under  him    or  them,  will   be   estopped    from    denying  his 
appointment  and  authority  as  such  executor.' 

§  389.  Estoppel  against  the  mortgagor  by  his  acts, 
declarations  and  agreements. — A  mortgagor  may  be 
estopped  by  his  acts,  declarations  and  agreements  from  setting 
up  defences  which  would  otherwise  be  valid ;  as  where  he 
induces  the  plaintiff  to  take  an  assignment  of  a  mortgage 
against  him.*  And  where  a  mortgagee  sells  a  bond  and 
mortgage,  which  have  been  delivered  to  him  to  be  held  for 
the  benefit  of  the  mortgagor,  at  a  usurious  discount,  and 
represents  to  the  purchaser  that  the  bond  and  mortgage  are 
good  and  valid  securities  in  his  hands,  in  an  action  brought  by 
the  purchaser  of  the  mortgage  to  foreclose  the  same,  the  mort- 
gagor will  be  estopped  from  showing  that  it  is  void  for  usury.* 
And  where  a  mortgagor,  at  the  time  of  executing  a  mortgage, 
delivers  to  the  mortgagee  a  certificate  that  there  is  no 
defence  against  it,  in  an  action  brought  by  the  purchaser 
of  the  mortgage  for  foreclosure,  the  mortgagor  can  not 
plead  the  defence,  that  there  was  fraud  in  obtaining  the 
mortgage,  or  a  misappropriation  by  the  mortgagee  of  the 
moneys  raised  by  its  sale.* 

And  where  the  owner  of  a  tract  of  land,  covered  by  a 
mortgage  given  prior  to  his  purchase,  influenced  a  third 
person  to  purchase  the  mortgage  by  stating  to  him  that  it 
was  all  right  and  valid,  and  a  lien  upon  the  premises,  and 
•that  he  would  pay  the  same,  he  will  be  estopped  afterward 
from  pleading  a  failure  of  consideration  as  a  defence  against 
a  foreclosure  brought  by  such  third  person,*  Thus,  where 
the  plaintiff,  being  about  to  purchase  a  second  mortgage, 
inquired  of  the  defendant  with  regard  to  his  personal 
liability  for  its  payment,  and  the  latter,  with  full  knowledge 
that  the  inquiry  was  made  with  reference  to  a  purchase  of 


'  Skelton  v.  Scott,  18  Hun  (N.  Y.)  *  Hutchison  v.  Gill.  91  Pa.  St.  253 

875  (1879).  (1879). 

*  Johnson   v.   Parmely,   14   Hun  » Smith  v.   Newton,   38  El.    230 

(N.  Y.)  398  (1878) ;  Norris  v.  Wood,  (1865).     See  Bassett  v.  Bradley,  48 

14  Hun  (N.  Y.)  196  (1878).  Conn.  224  (1880). 

•Piatt  V.  Newcomb,  27  Hun  (N. 
Y.)  186  (1882). 


§§390-391.]    ESTOPPEL IVIAEKIED    WOMAIT.  465 

the  mortgage,  replied  that  "  he  had  assumed  and  agreed  to 
pay  the  debt,  as  his  deed  would  show,"  it  was  held  that  he 
was  equitably  estopped  from  denying  his  liability  on  the 
contract  of  assumption.' 

§  390.  Estoppel  against  married  women. — A  married 
woman  is  bound  by  an  estoppel  the  same  as  any  other 
person ;'  and  this  estoppel  may  extend  to  the  conveyance 
of  land  by  deed  or  by  mortgage.'  But  there  can  be  no 
estoppel  where  there  is  no  fraud ;  yet  there  may  be  fraud 
without  a  preconceived  design  to  mislead  or  deceive.  The 
fraud  may  consist  merely  in  a  denial  of  what  had  previously 
been  affirmed.*  Thus,  where  a  married  woman  makes  a  repre- 
sentation by  affidavit  that  a  loan  is  for  her  benefit,  which  is 
relied  on  in  good  faith  and  believed  to  be  true,  she  will  be 
estopped,  in  a  suit  to  foreclose  a  mortgage  executed  upon 
her  lands  to  secure  the  loan,  from  denying  the  truth  of  such 
representation  by  asserting  that  the  mortgage  was  given 
for  a  debt  contracted  by  her  husband.' 

§  391.  Estoppel  against  title  subsequently  acquired 
by  mortgagor. — Where  a  mortgage  of  land  purports  to 
convey  the  fee,  any  title  subsequently  acquired  by  the  mort- 
gagor, will  strengthen  the  mortgage  and  inure  to  the  benefit 
of  the  mortgagee  in  the  absence  of  intervening  equities  ;* 
and  the  rights  of  the  mortgagee  in  such  land  can  not  be 


>  Bassett  v.  Bradley,  48  Conn.  224  108  Ind.  301  (1886) ;   s.  c.  6  West. 

{1880).  Rep.  596,  598.     See  Blair  v.  Wait, 

«  Orr    V.    White.    106    Ind.    344  69   N.  Y.   113  (1877) ;    Continental 

(1885);    s.   c.   4  West.   Rep.   482;  Nat.   Bank  v.  Nat.  Bank  of  Com., 

Cupp  V.   Campbell,    103    Ind.    213  50  N.    Y.    575    (1872);  Pitcher    v. 

(1885) ;    s.   c.    1   West.    Rep.    255  ;  Dove,  99  Ind.  175  (1884) ;  Anderson 

Vogel    V.    Leichner,    102    Ind.    55  v.  Hubble,  93  Ind.  570  (1883). 

(1885).  *  Ward  v.  Berkshire  L.  Ins.  Co., 

»  Ward  V.  Berkshire  L.  Ins.  Co.,  108  Ind.  301  (1886) ;  s.  c.  6  West. 

108  Ind.  301  (1886);  8.  c.  6  West.  Rep.  Rep.  596. 

596.     In  this  case  it  was  held  that  it  «  Orr  v.  Stewart,  67  Cal.  275  (1885); 

is  immaterial  to  whom  the  check  for  Camp  v.  Grider,  62  Cal.  20  (1882) ; 

the  money  loaned  was  made  pay-  Sherman  v.  McCarthy,  57  Cal.  507 

able,  for  if  the  loan  was  made  to  (1881) ;   Rice  v.  Kelso,  57  Iowa,  115 

the  wife  the  mortgage  is  valid.  (1881). 

*  Ward  V.  Berkshire  Life  Ins.  Co. 

(30) 


4:60  OTHER   DEFENCES    D^   ESTOPPEL.  [§  392. 

divested  or  rendered  subservient  to  the  lien  of  a  subsequent 
judgment  or  incumbrance.'  The  reason  for  this  rule  is  that 
the  mortgagor  will  be  estopped,  after  the  execution  of  a 
mortgage,  from  setting  up  the  defence  that  he  has  acquired 
some  new  and  independent  title  not  covered  by  the  mort- 
gage." 

In  a  case  where  a  mortgage  containing  the  usual  cove- 
nants, was  executed  upon  real  property  by  a  person  who  had 
no  title  at  the  time,  but  who  subsequently  became  entitled 
to  an  estate  in  remainder  therein,  it  was  held  that  the  subse- 
quently acquired  title  inured  to  the  benefit  of  the  mortgagee 
and  that  he  could  enforce  his  mortgage  against  such  after- 
acquired  estate.'  But  it  has  been  held,  where  a  grantor  receives 
a  mortgage  for  part  of  the  purchase  money  of  a  conveyance, 
that  the  covenants  in  the  mortgage  will  affect  only  the  estate 
acquired  from  the  mortgagee  and  not  an  after-acquired  title.* 
It  is  said,  however,  that,  under  the  law  as  it  now  prevails  in 
Missouri,  a  mortgagor  occupies  no  such  subservient  relation 
to  the  mortgagee  as  will  prevent  him  from  acquiring  an  out- 
standing title  and  holding  it  against  the  mortgagee.* 

§  392.  Other  matters  as  defence  in  estoppel — Agree- 
ment to  release  lots. — In  an  action  to  foreclose  a  mortgage 
the  defendant  may  plead  in  estoppel  any  fraud  which  will  have 
the  efTecl:  of  avoiding  a  title  otherwise  valid,  as  an  unfair  repre- 
.scntation  or  concealment  on  the  part  of  the  mortgagee  ;*  but 


'  liice   V.   Kelso,    57    Iowa,    115  (N.   Y.)  816  (1838);    b.  c.  32  Am. 

(1881).  Dec.   635;    Lasselle    v.    Barnett,    1 

« Madaris  v.  Edwards.    32    Kan.  Blackf.  (Ind.)  150  (1821) ;  s.  c.  41 

'-'84(1884).  Am.  Dec.  217  ;  Dewey  v.  Field,  45 

3  Iowa  Loan    and  Trust    Co.   v.  Mass.  (4  Mete.)  381  (1842) ;  s.  c.  38 

King,  58  Iowa,  598  (1882).  Am.  Dec.  376  ;  Spear  v.  Hubbard, 

Mlandal  v.  Lower,   98  Ind.   255  21  Mass.  (4  Pick.)  143(1826) ;  Carter 

(1884).     See  Bradford  v.  Russell,  79  v.  Longworth,  4  Ohio,  384  (1831) ; 

Ind.  64  (1881).  Hoffman  v.  Lee,  3  Watts  (Pa.)  853 

*Bushv.  White,  85  Mo.  339(1884).  (1834);   Napier  v.   Elam,   6    Yerg. 

«  Storrs  V.  Barker,  6  Johns.  Ch.  (N.  (Tenn.)  108  (1834) ;  Peter  v.  Russell, 

T.)    166    (1822);    Wendell  v.   Van  2  Vern,  726  (1716) ;  Evans  v.  Bick- 

Renssela«r,   1    Johns.    Ch.  (N.  Y.)  nell,  6  Ves.   173,   182  (1801).    For 

344  ( 1815 ) ;    Niven  v.  Belknap,  2  modifications  of  the  general  rule,  see 

Johns.  (N.  Y.)  573  (1807) ;  L'Amou-  Patterson  v.  Esterling,  27  Ga,  205 

reus  V.  Vandenburgh,  7  Paige  Ch.  (1859) ;  Rangeley  v.  Spring,  21  Me. 


§  392.]  OTHER   DEFENCES    m    ESTOPPEL.  467 

mere  knowledge  on  the  part  of  the  mortgagee,  that  the 
mortgagor  has  conveyed  an  absolute  estate  in  the  mortgaged 
premises  to  a  third  party,  will  not  estop  him  from  asserting 
his  legal  rights  against  such  third  party  at  any  time.'  But 
it  seems  that  a  foreclosure  can  not  be  defeated  by  mere  pre- 
sumption in  favor  of  an  issue  raised  by  a  subsequent  incum- 
brancer as  assignee  of  the  mortgage,  if  such  incumbrancer 
has  not  relied  upon  the  records  nor  upon  inquiry  before 
taking  the  incumbrance.' 

It  has  been  said  that  an  agreement  by  a  mortgagee,  that 
the  mortgagor  might  subdivide  the  mortgaged  premises  into 
town  lots,  and  that,  on  the  request  of  the  mortgagor,  he  would 
release  any  one  or  more  of  such  lots  on  the  payment  to  him 
of  a  stipulated  price  per  foot  front  thereof,  will  be  treated 
also  as  an  agreement,  to  release  his  mortgage  on  the  parcels 
of  land  adjacent  to  the  lots  and  designated  on  the  plat  as 
streets  and  alleys.'  And  where  a  mortgage  expressly 
provides  for  subdividing  the  premises  into  lots,  whenever 
the  mortgagor  may  deem  it  advisable,  the  consent  of  the 
mortgagee  to  lay  out  the  usual  streets  and  alleys,  will  be 
impHed,  and  when  they  are  so  laid  out  he  will  be  bound  by  the 
plat.*  In  such  a  case,  when  the  mortgagee  adopted  the  plat 
by  acting  upon  it  and  by  making  releases  of  the  lots  by  their 
numbers,  this,  after  the  sale  of  lots  to  others,  would  estop 
any  objection  on  his  part  that  the  mortgaged  premises  were 
not  subdivided  according  to  his  express  written  assent,  and 
would  amount  to  a  ratification  of  the  subdivision  as  actually 
made  ;  and  parties  purchasing  would  have  the  right  to  rely 
on  admissions  thus  shown  by  his  conduct  and  acts.'  In  a 
case  where  a  person  holding  a  mortgage  upon  a  tract  of  land 


130  (1842) ;  Carpenter  v.  Cummings,  «  Jakway  v.  Jenison,  46  Mich.  521 

40  N.  H.    158  (1860);    Buswell  v.  (1881). 

Davis,  10  K  H.  413  (1839) ;  Marston  »  Smith  v.   Heath,    103   Dl.    130 

V.  Brackett,   9  N.   H.   337  (1838);  (1882). 

Wade  V.  Green,  3  Humph.  (Tenn.)  *  Smith    v.    Heath,   102  HI.    130 

547  (1842) ;  Meux  v.  Bell,  1  Hare,  (1882). 

73  (1841);  Jones  V.  Smith,  1  Hare,  *  Smith   v.   Heath,    102  111.    130 

43  (1841).  (1882). 

'  Parker  v.  Banks,  79  N.  C.  480 
11878). 


468  ESTOPPEL    BY    EXCOUliAGIKG    SALE.  [^  393. 

agreed  with  a  party  purchasing  the  land  that  he  would  release 
his  mortgage  lien,  if  such  purchaser  would  sell  certain 
chattels  and  deliver  the  proceeds  thereof  to  a  person  desig- 
nated, he  will  be  estopped  from  foreclosing  his  mortgage  on 
performance  by  the  purchaser  of  his  part  of  the  contract.* 

§  393.     Estoppel  by  assenting  to,  or  encouraging  a 
sale. — It  is  well  established  that  a  mortgagee  may,  by  mere 
silence  or  failure  to  act,  as  well  as  by  his  declarations  and 
conduct,  estop  himself  from  claiming  rights  in  opposition  to 
those  of  a  party  who  acted  upon  his  tacit  encouragement  ;* 
because  it  is  only  natural  justice  that  a  party  who  claims  an 
interest  in  property,  and  is  privy  to  the  fact  that  another  is 
dealing  with  it  as  his  own,  and  by  his  conduct  influences  a 
third   person  to  act  on  the  belief  that  he  has  no  interest 
therein,  or  implies  that  it  will  not  be  asserted,  will  not  be 
permitted  to  assert  his  claim  against  a  title  or  a  lien  created 
by  such   other  person  to  his  prejudice,  although  he  may 
derive  no  benefit   from   the  transaction.'      Thus,  where  a 
mortgagee  stands  by  and  advises  or  encourages  a  purchase 
of  premises  by  a  third  person,  who  is  ignorant  of  the  claim  of 
such  mortgagee,  he  will  be   estopped  from   asserting  such 
mortgage  as  against  such  purchaser,*  for  if  a  man  suppresses 
facts  which  he  is  in  duty  bound  to  communicate,  or  by  acts 
or  words  suggests  a  falsehood  to  the  prejudice  of  a  person 
who  had  a  right  to  a  full  and  correct  statement  of  the  facts 
in  the  case,  his  claim  or  lien  will  be  postponed  to  that  of 
the  person  who  may  be  prejudiced  by  its  enforcement.* 

But   it  is  said  that  a  fraudulent  intent  is  necessary  to 
constitute  an  estoppel  affecting  the  legal  title  to  land;*  yet 


>  Burke  v.   Grant,    116    111.    124  *  Storrs  v.  Barker,   6  Johns.  Ch. 

(1886).  (N.    Y.)  166  (1822).      See  Trenton 

2  See    Trenton    Banking    Co.    v.  Banking  Co.  v.  Duncan,  86  N.  Y.  221 

Duncan,  86  K  Y.  221  (1881) ;  s.  c.  (1881) ;    8.  c.    24  Alb.    L.  J.    390 ; 

24  Alb.  L.  J.  390  ;  Wendell  v.  Van  Skirving  v.  Neufville,  2  Desaus  (S. 

Rensselaer,  1  Jolins.  Ch.  (N.  Y.)  344  C.)  Eq.    194  (1803) ;    Nicholson  v. 

(1814).  Hooper,  4  Myl.  &  Cr.  186  (1838). 

^  See  McGovern  v.  Knox,  21  Ohio  *  See  Storrs  v.  Barker,  6  Johns. 

St.  547  (1871) ;  3.  c.  8  Am.  Rep.  83  ;  Ch.  (N.  Y.)  166  (1822) ;   Danley  v. 

Nicholson  v.  Hooper,  4  Myl.  &  Cr.,  Rector,  10  Ark.  (5  Eng.)  211  (1849); 

179  (1838).  6.  c.  50  Am.  Dec.  245. 


§  394.]         ESTOPPEL  BY  excoi;kagi:n^g  sale.  469 

if  the  declarations  or  conduct  of  a  party  were  intended  to 
deceive  generally,  or  occurred  under  circumstances  likely  to 
deceive,  they  will  be  sufficient  to  establish  the  fraud.*  And 
it  is  deemed  an  act  of  fraud  for  a  party,  cognizant  at  the  time 
of  his  own  rights,  to  suffer  another,  ignorant  of  those  rights, 
to  proceed  under  such  ignorance  in  the  purchase  of  the 
property,  or  in  the  improvement  of  it.' 

It  is  well  settled  that  prior  to  default  in  the  payment  of  a 
debt  secured  by  mortgage,  the  mortgagee  has  no  right  to 
forbid  the  mortgagor  or  his  licensee  from  using  the  mort- 
gaged premises  in  any  manner  which  will  not  impair  their 
value  as  a  security.  But  after  default  he  may,  and  under 
some  circumstances  equity  requires  that  he  should,  interfere. 
Thus,  where  a  mortgagee  has  notice  of  the  fact  that  a  rail- 
road company  is  building  its  road  across  the  mortgaged 
premises  under  a  parol  license  or  an  unrecorded  deed  given 
by  the  mortgagor  prior  to  his  default,  it  is  the  duty  of  the 
mortgagee  to  notify  the  company  of  his  rights  and  to  forbid 
the  further  prosecution  of  the  work.  In  case  he  fails  to  do 
this,  and  the  company  afterwards  makes  expenditures  upon 
the  work  and  improvements  upon  the  mortgaged  property,  the 
licensee  of  the  mortgagor  will  be  held  to  be  the  licensee  of 
the  mortgagee  also,  and  his  interests  will  be  fully  protected 
on  a  foreclosure  of  the  mortgage.' 

§  394.  Estoppel  by  silence  at  a  sale. — Where  a  person 
owns  or  has  an  interest  in  property  and  stands  by  and  permits 
it  to  be  sold  without  giving  notice  of  his  title  or  asserting 
his  rights,  he  will  be  estopped  from  setting  up  his  claim  or 
title  against  the  purchaser,*  because  it  is  his  duty  at  the  time 
of  the  sale  to  disclose  his  claim  or  title  to  the  property,  and 


•  "Wendell    v.    VanRensselaer,    1  '  Masterson  v.  "West  End  N.  G.  B. 

Johns.  Ch.  (N.  Y.)  344  (1814).  R.  Co.,  72  Mo.  342  (1«80). 

>  See  Dezell  v.   Odell,  3  Hill  (N.  *  See  Wendell  v.  VanRensselaer, 

Y.)  221  (1842) ;  Mitchell  v.  Reed,  9  1  Johns.  Ch.   (K  Y.)    344  (1814) ; 

Cal.  204  (1858) ;  Quirk  v.  Thomas^  McPherson  v.  Walters,  16  Ala.  714 

6  Mich.  76  (1858) ;  Horn  v.  Cole,  51  (1849) ;  Trapnall  v.  Burton,  24  Ark. 

N.  H.  297  (1868) ;  Adams  v.  Brown,  399  (1866) ;  Dauley  v.  Rector,  10  Ark. 

16  Ohio  St.  78  (1865).  (5Eng.)211  (1849) ;  s.  c.  50  Am.  Dec. 

»  Guffey  V.  O'Reiley,  88  Mo.  418  245  ;  Shall  v.  Biscoe.  18  Ark.  143 

(1885) ;  s.  c.  5  West.  Rep.  336.  (1856) ;    Markham  v.  O'Connor,  53 


470  ESTOPPEL   BY   SILENCE   AT   SALE.  [§  394. 

if  he  fails  to  do  so,  an  innocent  purchaser,  without  knowledge 
of  such  title  or  claim,  will  not  be  made  to  suffer  because  of 
the  owner's  laches.' 

Thus,  where  a  mortgagee  is  present  at  a  public  sale  of 
the  mortgaged  property  and  it  is  announced  that  the  title  is 
unincumbered,  and  a  purchaser  buys  under  the  belief  that 
he  is  obtaining  an  unincumbered  title,  the  mortgagee  will  be 
estopped  from  enforcing  his  mortgage  against  the  purchaser, 
even  though  the  mortgage  was  duly  recorded  at  the  time  of 
the  sale,'  if  he  fails  to  make  a  correction  of  the  announce- 
ment, because  it  would  be  a  fraud  to  permit  a  party  to  assert 
a  claim  which  his  previous  conduct  had  denied,  especially 
if  others  had  acted  upon  the  fair  interpretation  of  his 
conduct.*  But  it  has  been  said  that  where  the  right,  title 
and  interest  of  a  bankrupt  in  certain  real  estate  is  publicly 
sold  by  his  assignee,  and  there  is  a  mortgage  on  record 
against  the  premises  at  the  time  of  the  sale,  the  mortgagee 
will  not  be  estopped  from  enforcing  his  mortgage  because 
he  was  present  at  the  sale  and  neglected  to  state  his  lien  on 
the  lands,  especially  if  no  inquiry  was  made  of  him.* 


Ga.  198  (1874) ;  Corbett  v.  Norcross,  Sturm  v.   Parish,    1   W.    Va,    135 

35  N.  H.  99  (1857).  (1865) ;  Smith  v.  Ford,  48  Wis.  115, 

•  Thompson  v.  Blanchard,  4  N.  Y.  145  (1879) ;   Morgan   v.  Chicago  «& 

308  (1850).     See  Brown  v.    Owen,  A.  R.  R.  Co.,  96  U  .  S.  (6  Otto),  716; 

30  N.  Y.  541  (1864) ;    Baldwin  v.  bk.  24  L.  ed.  743  (1877). 

Brown,  16  N.  Y.  359  (1857) ;  Cork-  « Markham  v.  O'Connor,   52  Ga. 

hill  V.   Landers,   44  Barb.  (N.  Y.)  183  (1874) ;  s.  c.  21  Am.  Rep.  249. 

228  (1865) ;  Guthrie  v,    Quinn,   43  See  Storrs  v.  Barker,  6  Johns.  Ch. 

Ala.  568  (1869) ;   Trapnall  v.   Bur-  (N.  Y.)  166  (1822) ;  Wendell  v.  Van 

ton,  24  Ark.   399  (1866);    Shall  v.  Rensselaer,   1   Johns.    Ch.   (N.    Y.) 

Biscoe,  18  Ark.  142(1856);   Mark-  344(1815);  Rice  v,  Bunce,  49  Mo.  231 

ham  V.  O'Connor,  52  Ga.  198  (1874);  (1872) ;    s.    c.    8    Am.    Rep.    129 ; 

Anderson  v.   Hubble,  93  Ind.   570  Blackwood  v.   Jones,   4  Jones  (N. 

(1883) ;  Breeding  v.  Stamper,  18  B.  C.)  Eq.  54  (1858). 

Mon.  (Ky.)  175  (1857)  ;    Corbett  v.  »  Rice  v.  Bunce,  49  Mo.  231  (1872); 

Norcross,  35  N.  H.  99  (1857) ;  Buck-  s.  c.  8  Am.  Rep.  129.     See  Camp- 

ingham  v.  Smith,  10  Ohio,  288(1840);  bell  v.  Johnson,  44  Mo.  247  (1869) ; 

Hill  V.  Epley,  31  Pa.  St.  334  (1858) ;  Chouteau  v.    Goddin,    39  Mo.  229 

Boston  &  P.   R.   R.   Corp.  v.  New  (1866) ;  Newman  v.  Hook,  37  Mo. 

York  &  N.  E.  R.  R.  Co.,  13  R.  I.  207  (1866) ;  Taylor  v.  Zepp,  14  Mo. 

265  (1881);  First  National  Bank  v.  482    (1851);     s.   c.    55    Am.    Dec 

Hammond,    51    Vt.    215    ( 1878 ) ;  113. 


§  395.] 


ESTOPPEL    AGAINST   PUKCHASEE. 


471 


§  395.  Estoppel  against  purchaser  of  mortgaged  prem- 
ises subject  to  the  mortgage. — Where  a  person  buys  lands, 
which  the  vendor  had  encumbered  by  mortgage  to  secure  a 
debt  to  a  third  person,  expressly  agreeing  \Vith  the  vendor 
and  the  mortgagee  to  pay  such  debt,  which  is  deducted 
from  the  purchase  price,  his  title  will  be  made  subordinate 
to  the  mortgage,  and  he  will  be  estopped  from  denying  its 
validity  ;*  a  purchaser  of  the  lands  at  a  sale  on  execution 
against  the  vendee,  merely  succeeds  to  his  rights,  and  wiU 
also  be  bound  by  the  estoppel,  the  mortgage  having  been 
duly  recorded." 

It  is  a  general  rule  that  a  purchaser,  whose  conveyance 
is  by  its  terms  made  subject  to  a  prior  mortgage,  the 
amount  of  which  is  deducted  as  part  of  the  consideration 
of  the  purchase,  whether  he  expressly  assumes  it  as  a 
part  of  the  purchase  money  or  not,  can  not  plead  usury 
as  a  defence  to  the  foreclosure  of  such  mortgage;^  neither 


*  Mason  v.  Pliilbrook,  69  Me.  57 
(1879). 

'  Kennedy  v.  Brown,  61  Ala.  296 
(1878).  See  Simpson  v.  Del  Hoyo,  94 
N.  Y.  189  (1883) ;  Real  Estate  Trust 
Co.  V.  Balch,  45  N.  Y.  Supr.  Ct.  (13 
J.  &  S.)  528  (1877) ;  Root  v.  Wright, 
21  Hun  (N.  Y.)  344  (1880). 

»  Kennedy  v.  Brown,  61  Ala.  296 
(1878). 

3  Hartley  V.  Harrison,  24  N.  Y.  170 
(1861)  ;  Sands  v.  Church,  6  N.  Y. 
347  (1853)  ;  Hardin  v.  Hyde,  40 
BaVb.  (N.  Y.)  435  (1863) ;  Morris  v. 
Floyd,  5  Barb.  (N,  Y.)  130  (1849) ; 
Chamberlain  v.  Dempsey,  9  Bosw. 
(K  Y.)  212  (1862)  ;  Post  v.  Dart,  8 
Paige  Ch.  (N.  Y.)  639  (1841) ;  Stein 
V.  Indianapolis,  &c.,  Assoc,  18  Ind. 
237  (1862) ;  Butler  v.  Myer,  17  Ind. 
77  (1861) ;  Wright  V.  Bundy,  11  Ind. 
398  (1858) ;  Huston  v,  Stringham, 
21  Iowa,  36  (1866) ;  Greither  v.  Alex- 
ander, 15  Iowa,  470  (1863)  ;  Perry 
V.  Kearns,  13  Iowa,  174  (1862)  ; 
Hough  V.  Horsey,  36  Md.  181  (1872); 


8.  c.  11  Am.  Rep.  484  ;  Sellers  v. 
Botsford,  11  Mich.  59(1862)  ;  Cono- 
ver  V.  Hobart,  24  N.  J.  Eq.  (9  C.  E. 
Gr.)  120  (1873) ;  Cramer  v.  Lepper, 
26  Ohio  St.  59  (1875)  ;  s.  c.  20  Am. 
Rep.  756  ;  Reed  v.  Eastman,  50  Vt. 
67  (1877) ;  Thomas  v.  Mitchell,  27 
Wis.  414  (1871)  ;  DeWolf  v.  John- 
son, 23  U.  S.  (10  Wheat.)  367  (1825) ; 
bk.  6  L.  ed.  343.  See  Merchants'  Ex- 
change Nat.  Bank  v.  Commercial 
Warehouse  Co.,  49  N.  Y.  635,  643 
(1872);  Freeman  v.  Auld,  44  N.  Y.  50 
(1870)  ;  Mason  v.  Lord,  40  N.  Y.  764 
(1869).  But  where  A.  B.  &  C,  part- 
ners, having  executed  a  promissory 
note  to  D.,  embracing  usurious  inter- 
est, and  having  also  executed  to  him  a 
mortgage  on  real  estate  to  secure  the 
note,  A.  conveyed  to  B.  &  C.  his 
interest  in  the  partnership  property 
including  the  real  estate  mortgaged, 
B.  &  C.  agreeing,  in  consideration 
thereof,  to  pay  the  firm  debts, 
including  the  debt  to  D.,  it  waa 
held  that  B.  &  C.  were  not  estopped 


472 


ESTOPPEL   AGAINST   PUECHASEE. 


[§  395. 


can  he  plead  a  failure  or  want  of  consideration  in  the  mort- 
gage as  between  the  parties  to  it/  nor  that  it  was  defectively 
executed,*  nor  that  the  mortgage  is  not  a  valid  lien  upon 
the  land,*  nor  that  the  mortgagee  has  other  collateral  security 
for  the  same  debt,*  nor  that  the  debt  is  different  in  its  terms 
from  that  set  out  in  the  complaint,  nor  that  it  is  payable  in 
a  manner  different  from  that  stipulated  ;*  neither  can  he  urge 
any  defence  whatever  against  the  mortgage.'  And  the 
same  rule  applies  as  against  a  second  mortgagee,  where  his 
mortgage  is  made  expressly  subject  to  a  prior  incumbrance  •,'^ 
it  has  also  been  applied  to  a  case  where   the   recital    was 


from  asserting  such  usury  in  an 
action  by  D.  for  the  sale  of  the  mort- 
gaged premises,  and  that  the  assignee 
in  bankruptcy  of  J3.  &  C.  was  not 
precluded  from  making  such  de- 
fence, although  B.  &.  C.  in  the 
bankrupt  proceedings,  reported  D.  's 
debt  at  the  full  amount  claimed  by 
him  ;  Beals  v.  Lewis,  43  Ohio  St. 
230  (1885). 

'  Parkinson  v.  Sherman,  74  N. 
Y.  88  (1878)  ;  fi.  c.  30  Am.  Rep. 
263  ;  Ritter  v.  Phillips,  53  N.  T.  586 
(1873) ;  Horton  v.  Davis,  26  N.  Y. 
495  (1863)  ;  Lester  v.  Barron,  40 
Barb.  (N.  Y.)  297(1863) ;  Hartley  t. 
Tatham,  26  How.  (N.  Y.)  Pr.  158 
(1863) ;  Haile  v.  Nichols,  16  Hun 
(N.  Y.)  37  (1878) ;  Russell  v.  Kin- 
ney, 1  Sandf.  Ch.  (N.  Y.)  34  (1843). 
See  Jewell  v.  Harrington,  19  Wend. 
(N.  Y.)  471  (1838; ;  Barker  v.  Inter- 
national Bank  of  Chicago,  80  111.  96 
(1875);  Price  v.  Pollock,  47  Ind. 
362(1874)  ;  Crawford  v.  Edwards,  33 
Mich.  354  (1876) ;  Miller  v.  Thomp- 
son, 34  Mich.  10  (1876). 

^  Pidgeon  v.  Trustees  of  Schools, 
44  111.  501  (1867)  ;  Greither  v.  Alex- 
ander, 15  Iowa,  470  (1863) ;  Riley  v. 
Rice,  40  Ohio  St.  441  (1884).  How- 
ever, it  was  held  in  Goodman  v. 
Randall,  44  Conn.  321  (1877),  that  a 


purchaser  who  had  expressly  as- 
sumed a  mortgage  for  a  certain 
amount  in  his  deed  of  conveyance, 
was  not  estopped  from  showing  that 
the  incumbrance  had  no  existence  in 
fact,  because  the  mortgage  was 
fatally  defective,  having  been  wit- 
nessed, delivered  and  recorded  with- 
out having  been  signed  by  the  mort- 


8  Ritter  v.  Phillips,  53  N.  Y.  586. 
(1873)  ;  Johnson  v.  Parmaly,  14 
Hun  (N.  Y.)  398  (1878) ;  Kennedy 
v.  Brown,  61  Ala.  296  (1878)  ;  Scarry 
V.  Eldridge,  63  Ind.  44  (1878) ;  8.  c. 
7  Cent.  L.  J.  418  ;  Green  v.  Hous- 
ton, 22  Kan.  35  (1879). 

*  Ferris  v.  Crawford,  2  Den.  (N. 
Y.)  595  (1845). 

*  Klein  v.  Isaacs,  8  Mo.  App.  568 
(1881). 

*  Freeman  v.  Auld,  44  N.  Y.  50 
(1870);  Holden  v.  Risen,  77  Ala. 
515  (1884)  ;  McDonald  v.  Mobile 
Life  Ins.  Co.,  65  Ala.  358  (1880);. 
Delaware  &  H.  Canal  Co.  v.  Bon- 
nell,  46  Conn.  9  (1878) ;  Losey  v. 
Bond,  94  Ind.  67  (1883) ;  Hill  v. 
Minor,  79  Ind.  48  (1881) ;  Smith  v. 
Graham,  34  Mich.  302  (1876). 

'  Bronson  v.  Lacrosse  &  M.  R. 
Co.,  69  U.  S.  (2  Wall.)  283  (1863); 
bk.  17  L.  ed.  725. 


§  396.]  WKEIN   PUECHASEE   NOT   ESTOPPED.  473 

erroneous  in  fact,  the  prior  mortgage  being  on  an  entirely- 
different  parcel  of  land  from  that  covered  by  the  second 
mortgage.' 

§  396.  When  purchaser  subject  to  mortgage  not 
estopped. — The  fact,  that  in  a  conveyance  of  mortgaged 
premises  with  full  covenants,  the  mortgage  was  excepted  from 
the  covenant  against  incumbrances,  does  not  show  that  the 
grantee  took  the  land  subject  to  the  mortgage,  nor  will  it 
prevent  him  from  making  any  defence  against  the  mortgage 
which  the  mortgagor  might  have  made;'  but  a  purchaser  of 
land  on  which  there  is  a  mortgage,  of  which  he  had  notice, 
will  be  bound  by  all  the  information  which  he  could  pre- 
sumably obtain  upon  inquiry  from  the  mortgagee  in  regard 
to  his  claim  to  a  lien  on  said  land.* 

Where  a  purchaser  has  bought  not  merely  the  equity  of 
redemption,  but  the  whole  title,  paying  the  full  price  therefor 
with  no  deduction  on  account  of  a  mortgage,  he  may  set 
up  the  defence  of  usury  in  the  original  contract  between  the 
parties.*  A  purchaser  under  the  foreclosure  of  a  second 
mortgage,  will  not  be  precluded  by  a  clause  in  the  deed  of  the 
sheriff,  reciting  that  the  conveyance  is  subject  to  the  lien  of 
the  prior  mortgage,  from  pleading  the  defence  of  usury, 
where  the  second  mortgagee  could  have  set  up  such  defence 
against  the  first  mortgage.* 

In  order  to  estop  a  mortgagee  from  asserting  his  mortgage 
against  a  subsequent  purchaser  of  the  premises,  the  proof  of 
the  facts  from  which  the  estoppel  in  pais  is  claimed  must  be 
clear  and  satisfactory.*  Where  the  statement  of  a  mort- 
gagee as  to  the  amount  due  him  is  a  mere  matter  of  opinion 
and  no  effort  was  used  to  induce  the  purchase,  and  the  pur- 
chaser relied  upon  the  assurance  of  the  mortgagor  from 
whom  he  purchased,  when  he  could,  by  the  use  of  reasonable 


*  Sweetzer  v.  Jones,  35  Vt.  317  *  Lilienthal  v.  Champion,  08  Ga. 

(1862).  158  (1877)  ;  Malier  v.  Lanfrom,  86 

« Bennett  v.  Keehn,  67  Wis.  154  Dl.  518  (1877). 

(1886).  '  Pinnell  v.  Boyd,,  33  N.  J.  Eq.  (6 

"Martin  v.   Cauble,    72  Ind.   67  Stew.)  600  (1881). 

(1880).     See  Central  Trust  Company  'Preble   v.   Conger,   66  111.    370 

V.  Sloan,  65  Iowa.  655  (1885).  (1872). 


474  ESTOPPEL   AGAINST   PUECHASEB.  [§397. 

diligence  on  his  part,  have  ascertained  the  amount  of 
the  incumbrance,  the  mortgagee  will  not  be  estopped  from 
enforcing  his  mortgage  against  such  purchaser.*  It  is  a 
general  principle  that  the  party  setting  up  an  estoppel  must 
be  free  from  the  imputation  of  laches  in  the  premises.' 

§  397.  Estoppel  against  purchaser  subject  to  usurious 
mortgage. — The  doctrine  is  well  established  that  where 
property  covered  by  a  usurious  mortgage  is  conveyed  by  a 
deed  containing  a  clause  expressly  making  the  conveyance 
subject  to  the  mortgage  lien,  such  clause  in  the  deed  will 
operate  as  a  waiver  of  the  defence  of  usury,  and  will  be 
regarded  as  a  provision  made  by  the  mortgagor  for  the  pay- 
ment of  the  usurious  debt  which  the  grantee  can  not 
afterwards  question  f  and  the  grantee  under  such  a  deed 
can  not  compel  the  application  of  the  usurious  bonus  paid 
by  his  grantor  to  the  reduction  of  the  mortgage  debt.*  But 
it  is  held,  where  the  property  is  reconveyed  to  the  grantor 
by  a  deed  in  which  nothing  is  said  regarding  the  mortgage, 
that  he  will  be  entitled  to  set  up  the  defence  of  usury  in 
an  action  to  foreclose  the  mortgage/ 


»  Preble  v.   Conger,   66    111.    370  Ins.  Co.,  40  Ohio  St.  583(1884) ;  Cra- 

(1872).  mer  v.  Lepper,  26  Ohio  St.  59  (1875) ; 

*  Trenton  Banking  Co.  v.  Duncan,  Austin  v.   Chittenden,   33  Vt.  553 

86  N.  Y.  221  (1881).  (1861). 

«  Hartley  v.  Harrison,  24  N.  Y.  *  Root  v.  Wright,  21  Hun  (N.  T.) 

170  (1861) ;   Smith  v.  Cross,  16  Hun  344  (1880). 

(N.  Y.)  487  (1879) ;  Baskins  v.  Cal-  »  Knickerbocker  Life  Ins.  Co.  v. 

houn,  45  Ala.  582  (1871) ;  Loomis  v.  Nelson,  78  N.  Y.  137  (1879) ;    s.  c.  7 

Eaton,  32  Conn.  550  (1865) ;  Studa-  Abb.    (N.  Y.)  N.  C.   170,   aff'g  13 

baker    v.   Marquardt,   55  Ind.   341  Hun  (N.  Y.)  321  (1878).    See  Bennett 

(1876) ;  PinneU  v.  Boyd,  33  N.  J.  v.  Bates,  94  N.  Y.  354,  371  (1884> 
Eq.  (6  Stew.)  190  (1880) ;  Jones  v. 


CHAPTER  XIX. 

ANSWERS  AND  DEFENCES. 

RIGHT  OT  ACTION  NOT  ACCRIIED—MOIITGAGE  DEBT  NOT  DUE-PAT- 

HENT  AND  DISCHARGE  — DENIAL  Oi'   PERSONAL  LIABILITY  — 

BELEASE  OF  PAJIT  OP  MOBTGAGED  PREMISES. 


398.  Denial  of  right  of  action  ac- 

crued— Nothing  due. 

399.  Alleging  condition  precedent 

as  a  defence. 

400.  Breach    of   an   independent 

or  collateral  covenant  as  a 
defence. 

401.  Allegation  that  mortgage  is 

for  indemnity  only. 

402.  Extension   of   time  of  pay- 

ment as  a  defence. 

403.  Consideration   for  extension 

of  time.  * 

404.  Payment  as  a  defence. 

405.  What  amounts  to  a  payment. 

406.  Attorney's  fees  and  taxes  to 

be  paid  as  part  of  mortgage 
debt. 

407.  Payment    of    condemnation 

money  to  mortgagor  instead 
of  to  mortgagee. 

408.  Payment  by  deposit  of  col- 

lateral security  or  assump- 
tion of  prior  mortgage. 


§  409.  Application    of   payments — 
How  to  be  made. 

410.  Payments  by  mortgagor  after 

conveyance. 

411.  Payments  — How   pleaded — 

Inability   to   find   mortga- 
gee. 

412.  Payment  —  How  proved  in 

defence. 

413.  Alleging  discharge  and  satis- 

faction of  mortgage  in  de- 
fence. 

414.  Allegation  of  release  of  part 

of  mortgaged  premises. 

415.  Alleging   release  of  part  of 

moi  tgaged  premises  in  de- 
fence. 

416.  .Application   of  proceeds  on 

release    of    part    of    mort- 
gaged premises. 

417.  Denial   of  personal  liability 

uii    contract    of     assump- 
tion. 


§  398.  Denial  of  right  of  action  accrued — Nothing  due. 
— A  defendant  in  an  action  to  foreclose  a  mortgage  may 
show  in  defence,  while  admitting  the  validity  of  the  mort- 
gage, that  by  its  terms  nothing  is  due  thereon,  and  that  a 
cause  of  action  has  not  accrued.  Thus,  an  answer  showing 
an  agreement  between  the  parties,  contemporaneous  with 
the  execution  of  the  mortgage,  to  the  effect  that  the  mort- 
gage should  become  due  and  payable  only  on  the  occurrence 
of  an  event  which  never  happened,  pleads  a  good  defence  to 
an  action  to  foreclose  the  mortgage.'    Where  such  a  defence  is 


»  Lucas  V.  Hendrix,  93  Ind.  54  (1883). 

475 


476  DENTLNa    BIGHT   OF   ACTION    ACCRUED.        [§  399. 

set  up,  if  the  plaintiff  fails  to  establish  the  fact  that  a  portion 
of  the  debt  is  due,  or  that  a  cause  of  action  has  accrued,  his 
complaint  will  be  dismissed ;'  but  where  the  condition  of 
the  mortgage  is  other  than  for  the  payment  of  money,  and 
there  is  a  breach  of  it,  the  mortgagor  can  not  set  up  as  a 
defence  to  an  action  for  foreclosure  the  fact  that  nothing 
is  due. 

Where  the  condition  of  the  defeasance  in  a  mortgage  is, 
that  the  note  secured  thereby  shall  be  paid  within  sixty  days 
after  demand,  and  a  demand  is  made  by  a  person  claiming 
to  act  as  agent  for  the  owner,  but  whose  agency  is  denied, 
the  mere  possession  of  the  note  by  the  person  making  the 
demand  will  not  be  sufficient  proof  of  his  agency.' 

§  399.  Alleging  condition  precedent  as  a  defence. — 
Where  the  title  of  the  vendor  to  certain  premises  is  known  to 
be  defective  at  the  time  of  conveyance,  and  a  note  and 
mortgage  given  to  secure  the  whole  or  a  part  of  the  purchase 
price  of  the  property,  contain  a  stipulation  that  nothing 
shall  be  deemed  to  be  due  upon  the  note  until  the  vendor 
shall  have  perfected  the  title  to  the  premises,  the  mortgagor 
may  set  up  the  non-performance  of  this  condition  as  a 
defence  to  an  action  to  foreclose  such  mortgage.*  This  pro- 
position has  been  supported  where  a  vendor  covenanted  to 
pay  all  existing  incumbrances;*  also,  where  a  stipulation 
executed  with  the  mortgage  provided  that  it  should  not  be 
enforced,  until  a  quit-claim  deed  of  an  outstanding  title  had 
been  obtained  by  the  vendor.' 

But  where  the  mortgagor  sets  up  as  a  defence  failure  of 
title  to  the  whole  or  a  part  of  the  premises  conveyed,  he 
must  also  release  to  the  vendor  whatever  title  he  may  have 
acquired  by  his  deed  to  that  part  of  the  property,  to  which 
the  title  failed  or  was  defective  ;  and  in  case  of  the  failure 


'  See  Hall  v.  Davis,  73  Ga.  101  (1868).    See  Ryerson  v.   WUlis,  81 

(1885) ;  Lucas  v.  Hendrix,  92  Ind.  N.  T.  277  (1880).     See  post  %  400. 
54(1883).  "Stewart  v.   Clark,  8  Kan.   210 

'  Union    Central    Life    Insurance  (1871), 
Co.  V.  Jones,  35  Ohio  St.  351  (1880).  »  Ryerson  v.  Willis,  81  N.  Y.  277 

•Weaver  v.  Wilson,   48  111.  125  (1880). 


§  400.]         DEFJilN^CE   OF  BEEACH   OF   COVENANT.  477 

of  the  title  to  the  whole  property  he  must  offer  to  rescind 
the  contract,'  because  one  who  seeks  equitable  relief  must 
first  do  equity.' 

§  400.  Breach  of  an  independent  or  collateral  cove- 
nant as  a  defence. — A  mortgagor  can  not  set  up  the  breach 
of  an  independent  or  collateral  covenant  as  a  defence  in  an 
action  to  foreclose  a  mortgage,  where  the  payment  of  the 
debt  secured  is  not  made  to  depend  upon  the  performance 
of  such  independent  covenant.*  Thus,  where  a  mortgage  is 
given  to  secure  part  of  the  purchase  price  of  land,  the  title 
to  which  is  defective,  or  upon  which  there  is  a  prior  incum- 
brance, and  such  title  is  to  be  perfected  or  the  incumbrance 
removed  by  the  mortgagee,  an  answer  in  an  action  to  fore- 
close the  mortgage,  alleging  that  the  title  has  not  been 
perfected,  nor  the  incumbrance  removed,  will  be  unavailing, 
unless  the  payment  of  the  mortgage  is  made  dependent 
upon  the  perfection  of  the  title  or  the  removal  of  the 
incumbrance.* 

And  where  a  complaint  sets  forth  the  conditions  of  a  bond, 
and  avers  the  execution  of  the  mortgage  as  collateral  there- 
to with  the  same  conditions,  an  answer  merely  repeating 
the  words  of  the  conditions  as  stated  in  the  complaint  and 
alleging  that  such  conditions  are  not  contained  in  the  mort- 
gage, is  not  a  denial  that  they  are  in  substance  the  conditions 
of  the  mortgage  ;  to  raise  an  issue  upon  that  question,  the 
defendant  should  either  deny  the  debt  or  plead  the  conditions 
verbatim  from  the  bond  and  mortgage.*  In  an  action  to 
foreclose  a  purchase  money  mortgage,  if  the  answer  attempts 
to  show  a  failure  of  title,  but  does  not  set  forth  the  deed  or 


>  Ryerson  v.  Willis.  81  N.  Y.  377  son  v.  VanSyckle,  21  N.  J.  Eq.  (8 

(1880) ;  Baker  v.    Robbins,   2  Den.  C.  E.  Gr.)  93  (1870). 

(N.Y.)  136(1846);  Rosebaum  v.  Gun-  *  Courson  v.  VanSyckle,  21  N.  J. 

ter,  3  E.  D.Smith,  (N.T.)  203  (1854);  Eq.  (6  C.  E.    Gr.)  92  (1870).     See 

Fisher  v.  Conant,  3  E.  D.    Smith,  Duryea  v.  Linsheimer,  27  N.  J.  Eq. 

(N.  Y.)  199  (1854) ;  Weaver  v.  Wil-  (12  C.  E.  Gr.)  366  (1876).    See  ant« 

eon,  48  111.  125  (1868).  §  399. 

»  Ryerson  v.  Willis,  81  N.  Y.  277  *  Dimond  v.  Dunn,  15  N.  Y.  498 

(1880).  (1857),  reversing  8  How.  (N.  Y.)  Pr. 

»  Duryea  v.  Linsheimer,  27  N.  J.  16. 
Eq.  (12  C.  E.  Gr.)  366  (1876) ;  Cour- 


478  MORTGAGE   iOE   LNDE^JS'lTY.     [§§  401-402. 

any  covenants  therein,  nor  allege  fraud,  it  will  be  bad  on 
demurrer.' 

§  401.    Allegation  that  mortgage  is  for  indemnity  only. 

— The  defendant  may  set  up  by  way  of  defence  and  show 
by  parol  evidence,  that  the  mortgage  sought  to  be  foreclosed 
was  given  simply  to  indemnify  the  plaintiff  as  a  surety,'  that 
the  obligation  has  been  paid  and  satisfied,  and  that  the 
plaintiff  has  not  been  injured  in  any  way,  because  where  thee 
has  not  been  a  breach  of  the  conditions  of  the  mortgage, 
an  action  for  foreclosure  can  not  be  maintained.'  The  effect 
of  parol  evidence  in  showing  that  a  mortgage  given  for  the 
payment  of  money  was  in  reality  to  indemnify  the  plaintiff, 
is  not  to  counteract  or  to  vary  the  mortgage,  but  to  identify 
the  demand  to  which  it  refers ;  and  such  evidence  is  always 
competent.* 

§  402.     Extension  of  time  of  payment  as  a  defence. — 

A  mortgage  can  not  be  foreclosed  until  the  debt  which  it 
was  given  to  secure  has  become  due  and  payable,  even  though 
the   security   may   be   impaired    and    rendered    precarious 

1  Cornwell  v.  Clifford,  45  Ind.  393  '  On  a  recognizance  of  bail,  see 

(1873);  Church  v.  Fisher,  40  Ind.  145  Colman  v.  Past,  10  Mich.  422  (1862), 

(1872)  ;  McClerkin  V.  Sutton,  29  Ind.  or  on  a  note,  Kimball  v.  Myers,   21 

407  (1868).     See  Ryerson  v.  WilUs,  Mich.  276  (1870) ;  s.  c.  4  Am.  Rep. 

81  N.  Y.  277  (1880) ;   Piatt  v.  Gra-  487  ;   Ide  v.   Spencer,   50  Vt.   293 

ham,  3  Sandf.   (N.  Y.)  118  (1849)  ;  (1877). 

Wilbur  V.  Buchanan,     85  Ind.   42  » Ide  v.  Spencer,  50  Vt.  293  (1877). 

(1882) ;  Jenkinson  v.  Ewing,  17  Ind.  •*  Kimball  v.  Myers,  31  Mich.  376, 

505  (1861) ;   Woodforth  v.  Leaven-  285  (1870)  ;  s.  c.  4  Am.  Rep.  487. 

worth,  14  Ind.  311  (1860);  Laughery  Judge    Cooley    said,    in  delivering 

V.    McLean,    14    Ind.    106   (1860);  the  opinion  of  the  court :     "Weun- 

Chambers    v.    Cox,    23    Kan.    393  derstand  also  that  evidence  of  the 

(1880);  Mendenhall    v.    Steckel,   47  satisfaction    of  a  demand  actually 

Md.  453  (1877) ;  s.  c.  28  Am.  Rep.  received,  though  in  a  manner  vary- 

481  ;  Key  v.  Jennings,  66  ;^o.  356,  ing  from  that  agreed,  is  always  com- 

068  (1877) ;  Wheeler  v.  Standley,  50  petent,  notwithstanding  it  may  have 

Mo.  509  (1872);  Glenn  V.Whipple,  12  been  received  with  some  contempo- 

N.  J.  Eq.  (1  Beas.)  50  (1858) ;  Hill  raneous  agreement,"  citing  Crosman 

V.  Butler,   6  Ohio  St.   207  (1856) ;  v.  Fuller,  84  Mass.  (17  Pick.)  171, 

Darling    v.    Osborne,    51    Vt.    148  174  (1835);   Hagood  v.  Swords,   3 

(1878) ;  Booth  v.  Ryan.  31  Wis.  45  Bail  (S.  C.)  L.  305  (1831) ;  Bradley 

(1872) ;    Hall  V.  Gale,  14  Wis.    54  v.  Bentley,  8  Vt.  245  (1836). 
(1861). 


§  402.]      ALLEGING  EXTENDED  TDIE  OF  PAYSLENT.  479 

by  delay.'  And  the  time  within  which  a  mortgage  debt 
is  to  be  paid  may  be  extended  upon  a  vaHd  consideration, 
and  such  extension  will  be  a  bar  to  an  action  to  foreclose 
the  mortgage  until  after  the  period  of  extension  has  expired. 
An  extension  of  the  time  for  the  payment  of  a  mortgage 
affects  the  right  to  foreclose,  but  does  not  in  any  way  affect 
the  mortgage  lien  ;  for  neither  an  extension  of  time  nor  a 
change  in  the  indebtedness  secured  by  a  mortgage  will 
impair  or  in  any  way  affect  the  validity  of  the  mortgage.* 

Where  the  obligation  is  under  seal  and  an  agreement  for 
its  extension  is  made  before  maturity,  it  must  be  in  writing 
and  of  equal  legal  formality  as  the  original  instrument  ;* 
but  where  there  has  been  a  breach  of  the  conditions  of  a 
sealed  instrument,  the  time  for  payment  maybe  extended  by 
parol,  if  founded  upon  a  sufficient  consideration/  Thus, 
where  the  holder  of  a  mortgage  which  was  past  due  was 
about  to  enforce  it  by  an  action,  and  a  third  person  for  a 
valid  consideration  agreed  by  parol  with  the  plaintiff's  tes- 
tator, who  had  assumed  the  payment  thereof,  to  purchase 
said  mortgage  and  to  refrain  from  collecting  the  principal 
for  five  years,  the  court  held  in  an  action  to  foreclose  the 
mortgage  that  this  agreement,  having  been  executed  by 
the  taking  of  the  assignment  of  the  mortgage,  operated  as 
effectually  to  extend  the  time  of  payment  as  if  it  had  been 
under  seal.' 


'  Campbell  v.  Macomb,  4  Johns,  Cow.  (N.  T.)  48  (1827) ;   Townsend 

Cb,  (N.Y.)  534  (1820).    See  Building  v.    Empire   Stone  Dressing  Co.,   6 

Association  v.  Piatt,  5  Duer  (N.  T.)  Duer   (N.   Y.)    208    (1856) ;    Flynn 

675  (1856).  V.    McKeon,  6  Duer  (N.    Y.)  203 

»Shuey    v.   Latta,    90   Ind.    136  '(1856);   Fish  v.  Hay  ward,  28  Hun 

(1883).  (N.  Y.)  456  (1882) ;  Burt  v.  Saxton, 

»  Dodge  V.  Crandall,  30  K  Y.  306  1  Hun  (N.  Y.)  551  (1874) ;   s.  c.  4 

(1864) ;   Eddy  v.  Graves,  23  Wend.  T.  &.  C.  109  ;  Lattimore  v.  Harsen, 

(N.  Y.)  84  (1840);  Allen  v.  Jacquisb,  14  Johns.  (N.  Y.)  330  (1817) ;  Flem- 

21  Wend.  (N.  Y.)  628  (1839).  ing  v.  Gilbert,  3  Johns.  (K  Y.)  528 

*  Dodge  V.  Crandall,  30  N.  Y.  306  (1808) ;  Keating  v.  Price,  1  Johns. 

(1864) ;   Stone  v.  Sprague,  20  Barb.  Cas.  (N.  Y.)  22  (1799) ;  Newton  v. 

(N.  Y.)  509  (1855)  ;  Clark  v.   Dales,  Wales,  3  Robt.  (N.  Y.)  453  (1865) ; 

20  Barb.  (N.  Y.)  42  (1855);  Esmond  Delacroix  v.  Bulkley,  13  Wend.  (N. 

V.  Vanbenschoten,  12  Barb.  (N.  Y.)  Y.)  71  (1834). 

869  (1851) ;    Dearborn  v.   Cross,  7  »  Dodge  v.  Crandall,  80  N.  Y.  294 


480  ALLEGING  EXTENDED  TIME  OF  PAYMENT.      [§  403. 

While  an  executory  parol  agreement  is  not  technically 
sufficient  to  alter  the  terms  of  a  contract  under  seal,  yet 
when  made  before  a  breach  of  the  conditions  of  such  contract 
and  upon  a  sufficient  consideration,  it  may  operate  for  a 
limited  time  as  a  waiver  of  a  right  to  enforce  the  obligation 
of  such  contract ;'  and  where  such  parol  agreement  for  an 
extension  of  time  has  been  entered  into,  and  the  consider- 
ation paid,  no  court  will  enforce  the  contract  at  the  time  of 
its  maturity  merely  on  the  ground  that  such  agreement  was 
not  in  writing."  To  enforce  a  mortgage  in  opposition  to  an 
agreement  founded  upon  a  valuable  consideration  for  an 
extension  of  time  would  be  against  conscience  and  good 
faith,  and  a  fraud  upon  the  rights  of  the  mortgagor.*  An 
agreement  to  extend  the  time  for  the  payment  of  a  mortgage 
debt  must  be  made  after  the  execution  and  delivery  of  the 
mortgage  ;  and  both  the  mortgagor  and  the  mortgagee  must 
be  parties  to  the  contract  in  order  to  be  entitled  to  rights 
under  it.* 

§  403.  Consideration  for  extension  of  time. — In  order 
to  constitute  a  valid  defence  to  an  action  to  foreclose  a 
mortgage,  the  contract  for  an  extension  of  time  must  be 
founded  upon  a  valuable  new  consideration.*     But  it  has 


(1864);  Burtv.  Saxton,  1  Hun  (N.  »  Trayser  v.  Trustees  of  Indiana. 

Y.)  551  (1874)  ;  a  c.  4  T.  &.  C.  (N.  Asbury  University,  39  Ind.  556.  567 

Y.)  109.  (1873).    See  Fowler  v.  Brooks,  13  N. 

'  Trayser  v.  The  Trustees  of  In-  H.  240  (1842)  ;  Bailey  v.  Adams,  10 

dlana  Asbury  University,  39  Ind.  556  N.  H.  162  (1839) ;  Wheat  v.  Kendall, 

(1872);  VanHouten  v.  McCarty,  4  6  N.   H.   504  (1834);   McComb  v. 

N.  J.  Eq.  (3  H.  W.  Gr.)  141  (1842) ;  Kittridge,  14  Ohio,  348  (1846) ;  Aus- 

Klng  V.  Morford,  1  N.  J.  Eq.  (Saxt.)  tin  v.  Dorwin,  21  Vt.  38  (1846). 

274,  280  (1831) ;  Tompkins  v.  Tomp-  *  Lee  v.  West  Jersey  Land  Co.,  29 

kins,  21  N.  J.  Eq.  (6  C.  E.  Gr.)  338  N.  J.  Eq.  (2  Stew.)  377  (1878). 

(1871) ;  Cox  V.  Bennet,  13  N.  J.  L.  »  Pabodie  v.  King,  12  Johns.  (N. 

(1  J.  S.  Gr.)  165,  171  (1832).  Y.)  426  (1815) ;  Hall  v.  Constant,  2 

«  Scott  V.  Frink,  53  Barb.  (N.  Y.)  Hall  (N.  Y.)  185  (1829) ;  Gibson  v. 

633  (1868) ;  Burt  v.  Saxton,  1  Hun  Renne,  19  Wend.  (N.  Y.)389  (1838); 

(N.  Y.)  §51  (1874) ;  s.  c.  4  T.  «fc  C.  Patchin  v.  Peirce,  12  Wend.  (N.  Y.) 

(N.  Y.)  109.     In  re  Betts,  4  Dill  C.  61,  63  (1834) ;  Reynolds  v.  Ward,  5 

C.  93  (1877) ;  8.  c.  7  Rep.  225.     See  Wend.  (N.  Y.)  501  (1830) ;  Miller  v. 

Albert  y.  Grosvenor  Investment  Co.,  Holbrook,  1  Wend.  (N.  Y.)  317  (1828); 

L.  R.  8  Q.  B.  123,  127  (1867).  Harris  v.  Boone,  69  Ind.  300  (1879). 


§  403.]      ALLEGING  EXTENDED  TIME  OF  PAYMENT.  481 


been  said  that  mutual  promises,  on  the  one  hand,  to  waive 
payment  of  an  installment  at  the  time  when  it  matures,  and 
to  accept  it  at  a  later  date,  and,  on  the  other  hand,  to  pay 
the  whole  principal  and  the  interest,  at  the  expiration  of  the 
extended  time,  furnishes  a  sufficient  consideration  to  sustain 
an  extension  of  time.' 

An  agreement  between  a  mortgagor  and  a  mortgagee  to 
raise  the  interest  upon  a  bond  and  mortgage  from  six  per 
centum  to  the  highest  rate  allowed  by  law,  in  consideration  of 
an  extension  of  the  time  of  payment,  will  constitute  a  vahd 
consideration  ;'  so,  also,  will  the  payment  of  interest*  or  of 
an  installment  of  the  principal  in  advance,*  because  pay- 
ment before  the  day  on  which  a  debt  matures,  being  a  benefit 
to  the  creditor,  is  a  good  consideration  for  a  promise.*  The 
giving  of  additional  security,'  the  assuming  of  the  mortgage 
debt  by  a  purchaser  who  relies  upon  an  agreement  of  exten- 
sion,* or  the  payment  of  an  installment  of  interest  by  a 
grantee  of  the  mortgagor  not  personally  obliged  to  make 
such  payment,'  form  sufficient  considerations  to  support  a 
promise  for  the  extension  of  the  time  of  payment. 


'  Pierce  v.  Goldesbcrry,  31  Ind.  52 
(1869).  See  Wakefield  Bank  v. 
Truesdell,  55  BarJ).  (N.  Y.)  602 
(1864) ;  Clark  v.  Dales,  20  Barb.  (N. 
Y.)  42  (1855);  Burt  v.  Saxton,  1 
Hun  (N.  Y.)  551  (1874) ;  s.  c.  4  T. 
&  C.  (N.  Y.)  109  ;  Preston  v.  Ken- 
ning, 6  Bush  (Ky.)  556  (1869); 
Bailey  v.  Adams,  10  N.  H.  162 
(1839). 

'  Haggarty  v.  Allaire,  5  Sandf . 
(N.  Y.)  230  (1851).  See  Crosby  v. 
Wiatt,  10  K  H.  318  (1839) ;  Bailey 
V.  Adams,  10  N.  H.  162  (1839). 

*  Wakefield  Bank  v.  Ti;uesdell,  55 
Barb.  (N.  Y.)  602  (1864);  Maher 
V.  Lanfrom,  86  111.  513  (1877)  ; 
Pierce  v.  Goldesberry,  31  Ind.  52 
(1869);  Preston  v.  Henning,  6 
Bush  (Ky.)  556  (1869). 

*  Newsam  v.  Finch,  25  Barb.  (N. 
Y.)  175  (1857).  In  re  Betts,  4  Dill.  C. 
C.  93  (1877) ;  s.  c.  7  Rep.  225. 


But  it  has  been  said  that  the  pay- 
ment of  the  portion  of  a  debt  due  is 
not  a  suflicient  consideration  to  sup- 
port a  promise  to  give  further  time 
for  the  payment  of  the  balance.  Hall 
V.  Constant,  2  Hall  (N.  Y.)  185 
(1829). 

6  Austin  V.  .Dorwin,  21  Vt.  38,  44 
(1848) ;  Pinnel's  Case,  5  Coke,  117 
(1591). 

®  Trayser  v.  Trustees  of  Indiana 
Asbury  University,  39  Ind.  556 
(1872).  See  .Jester  v.  Sterling,  25 
Hun  (N.  Y.)  344  (1881) ;  Gibson  v. 
Renne,  19  Wend.  (N.  Y.)389  (1838). 

■>  Jester  v.  Sterling,  25  Hun  (N. 
Y.)  344  (1881);  Burt  v.  Saxton,  1 
Hun  (N.  Y.)  551  (1874);  s.  c.  4  T. 
&  C.  109. 

8  See  Grinnan  v.  Piatt,  31  Barb. 
(N.  Y.)  328  (1860);  Jester  v.  Sterling. 
25  Hun  (N.  Y.)  344  (1881). 

(31) 


482  DEFENCE   OF   PAYMENT.  [§  404. 

§  404.  Payment  as  a  defence.— The  existence  and  con- 
tinuance of  the  debt  is  essential  to  the  life  of  a  mortgage 
given  to  secure  it ;  whenever  the  debt  is  paid,  discharged, 
released  or  barred  by  the  statute  of  limitations,  the  mort- 
gage ceases  and  can  no  longer  have  any  legal  effect.*  The 
mortgagor  or  other  person  liable  for  the  payment  of  any 
deficiency  that  may  arise  on  the  sale  of  the  mortgaged 
premises,  as  well  as  the  owner  of  the  equity  of  redemption, 
has  a  right  to  answer  that  the  mortgage  debt  has  been  paid 
in  whole  or  in  part,  and  this  will  plead  a  good  defence 
to  a  foreclosure.'  And  where  an  action  is  brought  to  fore- 
close a  mortgage  for  an  unpaid  installment,  the  payment  of 
the  amount  due  with  costs  will  terminate  the  suit  ;*  while 
payment  in  whole  or  in  part,  when  properly  alleged  and 
proved,  is  a  good  defence  for  either  a  mortgagor  or  a  junior 
incumbrancer,*  yet  where  payment  is  set  up  as  a  defence,  it 
must  be  clearly  established.*  Whenever  a  defendant  pleads 
payment,  it  will  be  for  the  trial  court  to  decide  whether  a 
proper  defence  is  made  justifying  the  suspension  of  judg- 
ment for  the  plaintiff,  whose  legal  right  of  possession  is  not 
denied,  until  the  determination  of  the  question  whether  the 
mortgage  debt  has  or  has  not  been  paid.' 

The  equitable  assignee  of  a  mortgage,  in  order  to  protect 
hiij  rights  against  the  payment  of  the  debt  by  the  mortgagor 
to  the  mortgagee,  should  give  actual  or  constructive  notice 
of  his  assignment,  either  by  placing  the  assignment  on  record 
or  by  giving  notice  thereof  to  the  mortgagor  personally.    If 

>  Emory  v.  Keighan,  94  HI.  543  the  mortgage  debt  can  not  set  up  a 

(1880).  release  executed  by  one  who  had  no 

•  Prouty  V.  Price,  50  Barb.  (N.  T.)  authority  to  execute  it  at  the  time. 
844  (1867).  See  Lawson  v.  Barron,  Cornog  v.  Fuller,  30  Iowa,  213 
18  Hun  (N.  Y.)  414  (1879).  (1870). 

•  Brown  v.  Thompson,  29  Mich.  »  Suhr  v.  Ellsworth,  29  Mich.  57 
72  (1874).  See  Dow  v.  Moor,  59  Me.  (1874).  See  Finlayson  v.  Lipscomb, 
118(1871).  16   Fla.    751   (1878);    Cameron  v. 

«  Prouty  V.  Price,  50  Barb.  (N.  Y.)  Culkins,  44  Mich.  531  (1880) ;   Rich- 

844  (1867) ;    Prouty    v.  Eaton,    41  ardson  v.  Tolman,    44   Mich.    379 

Barb.  (N.  Y.)  409  (1863) ;  Edwards  (1880). 

V.  Thompson,  71  N.  C.  177  (1874) ;  «  Edwards  v.  Thompson,  71  N.  C. 

Hendrix  v.  Gore,  8  Oreg.  406  (1880).  177  (1874). 

But  a  mortgagor  who  has  not  paid 


§  404.]  DEFENCE    OF   PAYilENT.  483 

he  does  neither,  and  there  are  no  attending  circumstances 
to  put  the  mortgagor  on  inquiry  as  to  the  fact  of  the 
assignment,  a  payment  of  the  debt  to  the  mortgagee  will 
satisfy  the  mortgage  and  defeat  an  action  to  foreclose. 

But  payment  to  the  mortgagee  after  the  legal  transfer  of 
the  note  and  mortgage  before  maturity  will  not  satisfy  the 
note,  and  the  mortgage  may  be  enforced.'  It  has  been  held 
that  a  mortgagor  has  a  right  to  rely,  where  he  does  so  in 
good  faith,  upon  the  statement  of  the  mortgagee's  adminis- 
trator as  to  the  ownership  of  the  mortgage,  and  if  he  makes 
payments  to  the  person  who  the  administrator  says  owns 
the  note  and  mortgage,  they  will  be  valid  and  may  be 
set  up  as  a  defence  in  an  action  brought  by  the  right- 
ful owner  to  foreclose.'  It  has  been  said,  however,  that 
a  mortgage  may  be  kept  alive  even  after  payment  in  full, 
if  such  was  the  intention  of  the  parties,  or  if  there  are 
interests  which  require  it  for  their  protection  ;  but  where  a 
mortgagor  causes  a  first  mortgage  to  be  paid  with  his  own 
money,  his  payment  will  extinguish  such  mortgage  in  law 
and  in  equity,  as  between  the  rights  attaching  to  it  and 
those  attaching  to  a  second  mortgage.' 

The  payment  of  a  mortgage  debt  before  it  becomes  due 
will  operate  as  a  discharge  of  the  lien,  and  will  constitute  a 
good  defence  to  a  foreclosure  ;*  a  tender  or  payment  at 
maturity'  will  also  discharge  the  lien,  and  is  a  valid  defence." 
The  title  to  the  property  will  rest  in  the  mortgagor  free 
from  the  incumbrance.^ 


*  Towner  v.  McClelland,  110  111.  « Merrill  v.  Chase.  85  Mass.  (3 
542(1884).  Allen),   339  (1862);    Richardson  v. 

2  Reynolds  v.  Smith,  57  Mich.  194  Cambridge,  84  Mass.  (2  Allen),  118 

(1885).  (1861);  8.  c.  79  Am.  Dec.  767;  Shields 

»  Loverin  v.  Humboldt  Safe  De-  v.  Lozear,  34  N.  J.  L.  (5  Vr.)  496 

posit&  Trust  Co.,  113  Pa. St.  6(1886).  (1869);  s.  c.  3  Am.  Rep.  256.     See 

*  Holman  v.  Bailey,  44  Mass.  (3  Grover  v.  Flye,  87  Mass.  (5  Allen), 
Mete.)  55  (1841).  543  (1863). 

*  Kortright  v.  Cady,  21  N.  Y.  343  ■"  Shields  v.  Lozear,  34  N.  J.  L. 
(1860);  S.C.  78  Am.  Dec.  145;  Grain  v.  (5  Vr.)  496  (1869) ;  s.  c.  3  Am.  Rep. 
McGoon,  86  111.  431  (1877) ;  s.  c.  18  256. 

Am.  L.   Reg.  N.  S.  178,  and  notes 
182  to  186. 


484  DEFENCE    OF   PAYMENT.  [§  405. 

Payment  by  a  third  person  will  discharge  the  lien  of  a 
mortgage,  although  it  may  have  been  made  without  authority, 
if  it  was  subsequently  ratified  by  the  mortgagor,  in  which 
case  the  payment  by  an  agent  will  become  equivalent  to  an 
original  authorization  to  make  it.' 

§  405.  What  amounts  to  a  payment. — To  constitute  a 
payment  there  must  be  a  full  liquidation  of  the  debt ;  hence, 
a  mere  change  in  the  form  of  indebtedness  will  not  operate 
as  a  payment.  Thus,  it  has  been  held  that  the  fact,  that  the 
original  notes  secured  by  a  mortgage  have  been  surrendered 
and  other  forms  of  indebtedness  taken  in  their  stead,  will 
not,  as  between  the  parties,  while  the  original  indebtedness 
still  continues,  deprive  the  creditor  of  the  security  afforded 
by  his  mortgage ;"  and  a  mortgage  debt  will  not  be  satisfied 
by  the  mere  giving  of  other  notes  in  renewal,  because  it  is 
the  debt  and  not  the  mere  evidence  of  it  which  is  secured, 
and  so  long  as  the  debt  exists  in  any  form,  the  mortgage  will 
remain  unsatisfied.* 

The  acceptance  of  a  mortgagor's  note  for  interest  due  on 
a  mortgage,  will  not  pay  the  debts  nor  discharge  the  lien  of 
the  mortgage  for  such  interest.*  Payment  by  a  mortgagor  to 
the  next  of  kin  of  his  deceased  mortgagee  is  no  defence  to 
an  action  by  the  administrator  for  foreclosure  ;*  and  the  pay- 
ment of  part  of  a  mortgage  debt  after  the  commencement  of 
proceedings  to  foreclose  the  mortgage,  but  before  their  termi- 
nation, will  not  necessarily  delay  or  prevent  the  continuance 
of  the  foreclosure.* 

In  a  case  where  the  amount  of  a  mortgage  was  reduced  by 
the  court  on  an  appeal  by  the  mortgagor  on  a  bill  to  set  it 
aside,  the  complainant  was  allowed  costs  of  both  courts  and 
was  permitted  to  apply  them,  with  taxes,  as  a  payment /r<? 


•  Heermans  v.  Clarkson,  64  N.  Y.  *  Hutchinson  v.  Swartzweller,  31 
171    (1876);    Commercial  Bank   of  N.  J.  Eq.  (4  Stew.)  205  (1879). 
Buffalo  V.  Warren,   15   N.   Y.    577  *  Mitchell  v.  Moorman,  1  Young 
(1857) ;   Hayes  v.   Kedzie,   11   Hun  &  J.  21  (1826).     See  Story  v.  Kemp, 
(N.  Y.)  577,  581  (1877).  51  Ga.  399  (1874). 

*  Heively  v.  Matteson,   54  Iowa,  *  Welch  v.   Stearns,    74   Me.   71 
505  (1380;.  (1882). 

» Bodkin  v.Merit.86  Ind.  560  (1883). 


§  406.]  DEFEXCE    OF   PAYilEXT.  485 

tanto  on  the  mortgage.'  In  a  case  where  the  maker  of  a  note, 
secured  by  mortgage,  on  the  day  of  its  maturity  sent  checks 
to  the  mortgagee  for  the  amount  thereof  with  the  intention  of 
paying  it,  and  requested  the  same  to  be  applied  in  payment 
of  the  note,  the  mortgagee  objected  to  such  apphcation 
and  requested  that  the  checks  should  be  applied  towards  the 
payment  of  an  open  account,  stating  that  if  insisted  upon, 
the  application  would  be  made  in  payment  of  the  note  as 
required  but  that  in  such  case  the  open  account  would  be 
closed  and  payment  required,  and  that  further  credit  would 
not  be  given.  The  mortgagor  did  not  expressly  assent  to 
this,  though  no  further  directions  were  given  by  him  as  to 
the  application  of  the  check  and  he  did  not  make  a  demand 
for  the  note  ;  the  mortgagee  credited  the  checks  on  the  open 
account  and  delivered  receipted  vouchers  therefor  showing 
such  application,  and  the  mortgagor  continued  to  purchase 
and  the  mortagagee  to  sell  to  him  on  credit.  In  an  action 
brought  to  foreclose  the  mortgage,  it  was  held  that  the 
checks  were  not  a  payment  on  the  note,  because  the  above 
facts  showed  the  acquiescence  of  the  mortgagor  in  the  appli- 
cation as  made  on  the  open  account." 

§  406.  Attorney's  fees  and  taxes  to  be  paid  as  part  of 
mortgage  debt— Where  a  mortgage  provided  for  the  pay- 
ment of  an  attorney's  fee,  "  to  become  payable  on  filing  the 
complaint  for  foreclosure,"  and  after  the  commencement 
of  an  action  to  foreclose,  the  mortgagor  paid  the  principal 
and  interest,  together  with  the  court  costs,  but  not  the  attor- 
ney"s  fee,  and  was  informed  by  the  plaintiff  that  by  the  terms 
of  the  mortgage  there  was  an  attorney's  fee  due,  which  would 
have  to  be  paid  before  the  mortgage  would  be  discharged 
or  the  action  dismissed,  it  was  held  that  the  plaintiff  was 
entitled  to  proceed  with  the  action  to  enforce  the  payment 
of  the  attorney's  fee.'  And  it  has  been  held  that  the  pay- 
ment of  the  debt  secured  by  a  mortgage  does  not  extinguish 

'  Bowe  V.  Bowe,  42  Mich.  195  »  Stockton  Saving  and  Loan  Sec. 
(1879).  V.  DonneUy,  60  Cal.  4S1  (lttb2). 

»  Pennsylvania  Coal  Co.  v.  Blake, 
85  N.  T.  226  (1881).     See  post  §  409. 


486  DEFENCE    OF   PAYMENT.  [§§  407-408. 

the  lien  of  the  mortgage  as  a  security  for  taxes  properly  paid 
by  the  mortgagee  to  protect  his  mortgage  security.* 

§  407.  Payment  of  condemnation  money  to  mortgagor 
instead  of  to  mortgagee. — A  mortgagee  will  not  be  barred 
of  his  right  to  foreclose  by  the  payment  to  the  mortgagor, 
instead  of  to  him,  of  the  condemnation  money  found  to 
be  due  to  the  owner  of  the  property,  where  such  property 
is  taken  by  the  right  of  eminent  domain.'  Thus,  where  a 
railroad  company,  in  the  exercise  of  the  power  of  eminent 
domain,  seeks  to  appropriate  private  property  to  its  own  use 
for  the  purpose  of  a  right  of  way,  by  condemnation  and 
appraisement,  all  persons  having  an  interest  in  the  property* 
including  the  mortgagees,  should  be  made  parties  to  the 
proceeding  by  proper  notice;  and  if  such  company  fails  so  to 
do  and  pays  the  money  to  a  person  not  entitled  thereto,  the 
proceeding  and  payment  will  be  void  as  to  all  persons  not 
parties  to  it  and  therefore  not  binding  upon  a  mortgagee, 
who  may  foreclose  his  mortgage  as  against  the  railroad 
company.*  Where  the  entire  mortgaged  premises  are  taken, 
the  question  as  to  whether,  by  the  condemnation  proceed- 
ings, the  railroad  company  acquired  the  fee  to  the  land  or 
only  an  easement,  is  not  material ;  the  whole  of  the  property 
being  taken,  the  effect  upon  the  mortgagee's  security  is  the. 
same.* 

§  408.  Payment  by  deposit  of  collateral  security  or 
assumption  of  prior  mortgage. — In  a  recent  case*  a  party 
purchased  certain  premises  in  reliance  upon  representations  of 
the  vendor  that  they  were  free  and  clear  from  all  incumbrances, 
there  being  in  fact  a  mortgage  thereon  at  the  time.  Upon 
discovery  of  the  fraud  by  the  purchaser  an  oral  agreement 
was  made  between  him  and  his  grantor,  that  he  would  assume 
the  old  mortgage  and  that  the  amount  thereof  should  be 


'  Horrigan  v.  Wellmuth,  77  Mo.  *  Dodge  v.  Omaha  &  S.  W.   R. 

542  (1883).  Co.,  20  Neb.  276  (1886). 

»  Dodge  V.  Omaha  &  S.  W.  R.  R.  »  Green  v.    Fry,    93  N.   Y.    353 

Co.,  20  Neb.  276  (1»»6).  (1883). 

»  Dodge  V.  Omaha  &  S.  W.  R.  R. 
Co.,  20  Neb.  276  (1886). 


§  409.]  APPLICATION    OP   PAYMENTS.  487 

credited  as  a  payment  upon  a  mortgage  given  by  him  to  secure 
part  of  the  purchase  money.  The  vendor  subsequently 
assigned  his  mortgage  to  parties  who  had  no  knowledge  of  the 
agreement.  After  the  assignment,  for  the  purpose  of 
carrying  out  the  oral  agreement,  the  vendor  executed  to  the 
purchaser  a  receipt  for  the  amount  of  the  old  mortgage  to 
be  applied  upon  the  purchase  money  mortgage.  The 
mortgagor  at  that  time  had  knowledge  of  the  assignment. 
In  an  action  to  foreclose,  it  was  held  that  the  oral  agreement 
was  valid  and  effectual  as  a  payment,  and  that  its  effect  was 
not  impaired  by  taking  the  receipt. 

Where  the  attorney  of  a  mortgagee  refused  to  receive 
from  the  mortgagor  a  partial  payment  on  the  mortgage  to 
stop  the  interest,  but  consented  to  receive  it  as  a  deposit, 
with  the  understanding  that  if  the  mortgagee  would  take 
the  same  as  a  payment  and  allow  interest,  it  should  be  indorsed 
on  the  mortgage,  and  the  mortgagee  refused  to  receive  the 
money  unless  the  whole  debt  was  paid,  but  subsequently 
accepted  the  money  from  his  attorney  with  the  under- 
standing that  he  was  not  to  allow  interest  thereon  until  the 
residue  was  paid;  the  court  held  that  the  mortgagor  was 
equitably  entitled  to  have  the  money  applied  as  a  payment 
on  the  day  it  was  made,  and  that  it  wsls  pro  tanto  a  defence 
to  an  action  to  foreclose.* 

§  409.    Application  of  payments— How  to  be  made. — 

A  debtor  has  a  right  to  direct  the  application  of  his  pay- 
ments to  any  one  of  several  debts  owing  by  him  to  a  creditor,* 


>  Toll  V.  Hiiler,  11  Paige  Ch.  (X.  9  Cow.   (N.    Y.)  420   (1827) ;    Van 

Y.)  228  (1844).  Rensselaer  v.  Roberts,   5  Den.  (N. 

«  See  Bank  of  California  v.  Webb,  Y.)  470  (1848) ;   Allen  v.    Culver,  3 

94  N.  Y.  467  (1884) ;  National  Bank  Den.    (N.   Y.)  284  (1846);    Hall  v 

of  Newburgh  v.  Bigler,  83  N.  Y.  51  Constant,  2  Hall  (X.  Y.)  185  (1829) ; 

(1880) ;  Harding  v.  Tifft,  75  N.  Y.  Patty  v.  Milne.   16  Wend.  (N.  Y.) 

461  (1878) ;  Sheppard  v.   Steele,  43  557  (1837) ;   Stone  v.    Seymour,  15 

N.  Y.  53  (1870)  ;  Butler  v.  Ameri-  Wend.    (X.   Y.)   19    (1835) ;    Webb 

can  P.  L.  Ins.  Co.,  42  N.  Y.   Supr.  v.  Dickinson,  11  Wend.  (X.  Y.)  62 

Ct.  (10  J.  &  S.)  342  (1877) ;  Seymour  (1833) ;    Seymour    v.    VanSlyck,    8 

V.    Marvin,    11    Barb.    (N.    Y.)    80  Wend.  (X.  Y.)  403  (1832)  ;   King  v. 

(1851) ;  Mann  v.  Marsh,  2  Cai.  (X.  Andrews,  30  Ind.  429  (1868) ;  Bacon 

Y.)  99  (1804);  Baker  v.  Stackpoole,  v.  Brown,  1  Bibb  (Ky.)  334  (1809); 


488 


APPLICATION  OF  PAYMENTS — HOW  MADE.      [§  409. 


and  such  application  by  the  creditor  may  be  implied  from 
attending  circumstances.*  Where  the  debtor  fails  to  direct 
a  specific  application  at  the  time  of  the  payment,  the  creditor 
may  make  such  application  as  he  chooses."  Where  neither 
party  makes  an  application  of  the  payment  at  the  time  it  is 
made,  the  court  may  subsequently  direct  how  it  shall  be 
made.* 

If  the  application  of  payments  is  made  by  a  court,  it  will 
be  made  according  to  the  equitable  rights  of  all  interested 
parties.*  Where  a  debtor  owes  his  creditor  upon  various 
debts,  a  portion  of  which  are  secured,  the  application  of 
payments,  if  made  by  a  court,  will  usually  be  made  upon 
those  that  are  secured,  in  order  to  release  the   securities.* 


Champeuois  v.  Fort,  45  Miss.  355 
(1871);  Leef  v.  Goodwin,  Tan.  C.  C. 
460  (1841).     See  ante  %  405. 

'  Seymour  v.  VanSlyck,  8  Wend. 
(N.  Y.)  403  (1832).  See  Truscott  v. 
King,  6  K  Y.  147  (1853) ;  Robert 
V.  Garnie,  3  Cai.  (N.  Y.)  14  (1805) ; 
Allen  V.  Culver,  3  Den.  (N.  Y.)  284 
(1846) :  Stone  v.  Seymour,  15  Wend. 
(N.  Y.)  19  (1835) ;  Webb  v.  Dickin- 
son, 11  Wend.  (N.  Y.)  62  (1833). 

'  National  Bank  of  Newburgh  v. 
Bigler,  83  N.  Y.  51  (1880).  See  Feld- 
man  v.  Beier,  78  N.  Y.  293  (1879) ; 
Harding  v.  Tifft,  75  N.  Y.  461 
(1878) ;  Shipsey  v.  Bowery  Nat. 
Bank,  59  N.  Y.  485  (1875) ;  Bank  of 
California  v.  Webb,  48  N.  Y.  Supr. 
Ct.  (16  J.  &  S.)  175  (1882) ;  Seymour 
V.  Marvin,  11  Barb.  (N.  Y.)  80 
(1851) ;  Mann  v.  Marsh,  2  Cai.  (N. 
Y.)  99  (1804);  Baker  V.  Stackpoole,  9 
Cow.  (N.  Y.)  420  (1827) ;  VanRens- 
selaer  v.  Roberts,  5  Den.  (N.  Y.)  470 
(1848) ;  Allen  v.  Culver,  3  Den.  (N. 
Y.)  284  (1846) ;  Hall  v.  Constant,  2 
Hall  (N.  Y.)  185  (1829) ;  Godfrey  v. 
Warner,  Hill  &  Den.  (N.  Y.)  32 
(1842);  Webb  v.  Dickinson,  11 
Wend.  (N.  Y.)  62  (1833) ;  Trotter  v. 
Grant,  2  Wend.  (N  Y.)  413  (1829) ; 


Waterman  v.  Younger,  49  Mo.  413 
(1872) ;  Howard  v.  McCall,  21  Gratt. 
(Va.)  205  (1871) ;  Mayor  v.  Patten, 
8  U.  S.  (4  Cr.)  317  (1808) ;  bk.  2  L. 
ed.  632. 

8  Allen  V.  Culver,  3  Den.  (N.  Y.) 
284  (1846)  ;  Stone  v.  Seymour,  15 
Wend.  (N.  Y.)  19  (1835) ;  Righter  v. 
Stall,  3  Sandf.  Ch.  (N.  Y.)  608 
(1846) ;  Hargroves  v.  Cooke,  15  Ga. 
321  (1854);  Nutall  v.  Brannin,  5 
Bush  (Ky.)  11  (1868);  Calvert  v. 
Carter,  18  Md.  73  (1861). 

*  Jones  V.  Benedict,  83  N.  Y.  79 
(1880).  See  Griswold  v.  Onondaga 
Co.  &c.  Bank,  93  N.  Y.  301  (1883) ; 
Truscott  v.  King,  6  N.  Y.  147 
( 1852 ) ;  Dows  v.  Morewood,  10 
Barb.  (N.  Y.)  183  (1850) ;  Baker  v. 
Stackpoole,  9  Cow.  (N.  Y.)  420 
(1827) ;  Allen  v.  Culver,  3  Den.  (N. 
Y.)  284  (1846) ;  Stone  v.  Seymour, 
15  Wend.  (N.  Y.)  19  (1835) ;  Chester 
V.  Wheelwright,  15  Conn.  562 
(1843);  Bacon  v.  Brown,  1  Bibb 
(Ky.)  334  (1809) ;  Harker  v.  Conrad, 
12  Serg.  &  R.  (Pa.)  301  (1825)  ;  Ayer 
V.  Hawkins,  19  Vt.  26  (1846); 
Emery  v.  Titchout,  13  Vt.  15  (1841); 
Leef  V.  Goodwin,  Tan.  C.  C.  460 
(1841). 


§  409.]     APPLICATIOlf  OF  PAYMENTS — HOW  MADE.  489 

But  it  is  questionable  whether  in  all  cases,  as  between  a 
mortgage  and  an  open  account,  the  court  will  apply  a  general 
payment  upon  the  mortgage  instead  of  upon  the  open 
account.'  Some  of  the  cases  hold  that  such  an  application 
of  general  payments  should  be  made  as  will  be  most  bene- 
ficial to  the  debtor,  and  that  generally  such  payments  should 
be  applied  to  extinguish  the  debts  first  due.* 

Where  payments  are  made  by  a  party  upon  a  mortgage 
debt  in  pursuance  of  the  discharge  of  a  duty,  in  the  proper 
performance  of  which  others  are  interested,  such  payments 
must  be  applied  and  allowed  in  satisfaction  of  the  mort- 
gage, and  can  not  be  used  by  such  party  as  a  mere  con- 
sideration for  the  assignment  of  the  mortgage  and  debt  to 
a  third  person.*  And  money  once  paid  and  appropriated  by 
the  parties  to  a  note  secured  by  a  mortgage,  and  indorsed 
upon  it,  can  not  by  a  subsequent  agreement  be  transferred  to 
the  credit  of  another  debt,  and  such  satisfied  mortgage 
thereby  become  re-instated  and  made  good  as  against  a 
second  mortgage.* 

Where  a  mortgagee,  subsequent  to  the  execution  of  the 
mortgage,  has  become  indebted  to  the  mortgagor  upon  a 
book  account,  the  owner  of  the  equity  of  redemption  or 
a  junior  mortgagee  has  a  right  to  have  such  indebtedness, 
due  from  the  prior  mortgagee  to  the  mortgagor,  applied  in 
satisfaction  of  the  senior  mortgage.*     But  it  has  been  held. 


» Jones  V.  Benedict,  83  N.  Y.  79  »  Dows   v.   Morewood,   10  Barb. 

(1880) ;  Thomas  v.  Kelsey,  30  Barb.  (N.  Y.)  183  (1850).     See  Hunter  v. 

(N.  Y.)  268  (1859) ;  Dows  v.  More-  Osterhoudt,    11   Barb.   (N.   Y.)  33 

wood,  10  Barb.  (N.  Y.)  183  (1850) ;  (1851);  Allen  v.  Culver,  3  Den.  (N. 

Wright  V.  Wright,  7  Daly  (N.  Y.)  55  Y.)  284  (1846) ;  Wheeler  v.  Cropsey, 

(1877) ;  Jackson  v.  Johnson,  11  Hun  5    How.   (N.   Y.)  Pr.   288   (1850) ; 

(N.   Y.)    509    (1877) ;    Callahan   v.  Fairchild  v.   Holly,   10  Conn.   176 

Boazman,  21  Ala.  246  (1852)  ;  Stam-  (1834) ;  Sprague  v.  Hazenwinkle,  53 

ford  Bank  v.  Benedict,  15  Conn.  437  Bl.  419  (1870) ;  Crompton  v.  Pratt, 

(1843) ;  Langdon  v.  Bowen,  46  Vt.  105  Mass.  255  (1870) ;    Langdon  v. 

512    (1874) ;    Vance   t.   Monroe,    4  Bowen,  46  Vt.  512  (1874). 

Gratt.  (Va.)  53  (1847).    But  see  Field  «  Burnham  v.   Dorr,  72  Me.   198 

V.  Holland,  10  U.  S.  (6  Cr.)  8  (1810) ;  (1881). 

bk.  3  L.  ed  136.  '  York     Co.     Savings    Bank    v. 

'  Griswold  v.  Onondaga  Co.  &c.  Roberts,  70  Me.  384  (1879). 

Bank,  93  N.  Y.  301  (1883).  *  Prouty  v.  Price,  50  Barb.  (N.  Y.) 


490  PAYMENTS   BY   MORTGAGOR   AFTER   SALE.     [§410. 

that  the  question,  whether  a  balance  on  account  in  transac- 
tions between  a  mortgagee  and  a  mortgagor  after  the 
execution  of  the  mortgage,  which  is  equal  to  the  amount  of 
the  mortgage,  is  to  be  applied  upon  the  payment  of  such 
mortgage,  and  to  be  regarded  as  a  discharge  thereof,  depends 
upon  the  intention  of  the  parties  and  is  purely  a  question 
of  fact ;'  if  it  was  the  intention  and  agreement  of  the 
parties,  that  the  money  secured  by  the  mortgage  should 
remain  unpaid,  irrespective  of  the  current  balance  of  accounts, 
the  mortgagor  will  not  be  entitled,  as  against  an  assignee 
of  the  mortgage,  to  apply  such  balance  to  the  satisfaction  of 
the  mortgage  debt,  or  as  a  payment  thereon  pro  tanto* 
Where-  the  mortgagor  of  land  performs  labor  for  the  mort- 
gagee, under  an  agreement  that  his  wages  shall  be  applied 
upon  the  mortgage  debt,  and  earns  more  than  enough  to 
satisfy  the  same,  the  debt  will  nevertheless  remain  undis- 
charged until  the  actual  application  of  the  amount  to  such 
payment ;  yet  if  such  application  is  not  made,  and  the 
condition  of  the  mortgage  is  broken,  the  mortgagor  may 
maintain  an  action  to  redeem.* 

§  410.    Payments  by  mortgagor  after  conveyance.— A 

mortgage  is  valid  and  may  be  foreclosed  as  long  as  the  debt 
which  it  secures  is  not  barred  by  the  statute  of  limitations; 
and  a  partial  payment  or  an  acknowledgment  of  the  debt, 
which  would  prevent  the  statute  from  running  against  it,  will 
also  prevent  the  statute  from  running  against  the  remedy  on 
the  security.  Thus,  it  has  been  held  that  where  a  purchaser 
from  the  mortgagor  has  either  actual  notice  of  the  mortgage 
at  the  time  of  his  purchase,  or  constructive  notice  by  means 
of  public  records,  he  will  be  bound  by  a  previous  acknowl- 
edgment of  the  debt  made  by  his  grantor  within  twenty 
years.* 

844   (1867) ;    Rosevelt    v.    Bank  of  (1880) ;  Toll  v.  Hiller,  11  Paige  Ch. 

Niagara,   Hopk.    Ch.    (N.   Y.)  579  (N.  Y.)  228  (1844). 

(1825) ;   afl'd  9  Cow.   (N.  Y.)   409  «  Peck  v.  Minot,  3  Abb.  Ct.  App. 

(1827).  Dec.  (N.  Y.)  465  (1867). 

'  Peck  V.  Minot,  3  Abb.  Ct.  App.  *  Doody    v.   Pierce,   91   Mass.   (2 

Dec.  (N.  Y.)  465  (1867).     See  Bocks  Allen),  141  (1864). 

•».  Hathoru,  20  Hun  (N.   Y.)  503  *  See  Heyer  v.  Pruyu,  7  Paige  Ctu 


§  411.]    PAYMEI!TTS HOW   PLEADED   AS   DEFENCE.  491 

It  has  been  said  that  a  grantee  of  mortgaged  premises 
will  be  bound  by  the  acts  of  the  mortgagor,  or  other  person 
under  whom  he  claims,  made  subsequently  to  the  vesting  of 
his  estate,  as  well  as  by  those  prior  thereto ;  and  that  a  pay- 
ment or  a  new  promise  made  by  such  person  after  the 
transfer  of  the  property  to  the  grantee,  will  keep  the  debt 
and  security  alive  against  the  estate.'  And  it  has  been  held 
that  a  payment  of  interest  by  a  tenant  for  life,  will  keep  the 
mortgage  alive  as  against  a  person  entitled  to  the  mortgaged 
premises  in  remainder."  But  it  is  also  held  that,  where  the 
mortgagor  conveys  the  equity  of  redemption  and  ceases  to 
pay  interest  on  the  mortgage  note,  the  regular  payment  of 
interest  by  the  grantee  will  not  operate  to  prevent  the  run- 
ning of  the  statute  of  limitations  against  the  liability  of  the 
mortgagor  on  the  mortgage  and  the  note.*  The  doctrine, 
however,  that  a  payment  made  by  the  mortgagor  or  other 
party  liable  for  the  debt  after  he  has  parted  with  all  interest 
in  the  property,  will  keep  alive  the  debt  and  the  lien  on 
the  property,  is  repudiated  in  California,*  Kansas,'  Mas- 
sachusetts' and  Texas.* 

§  411.  Payments — How  pleaded — Inability  to  find  mort- 
gagee.— Payment  may  be  pleaded  by  answer  and  need  not 
be  set  up  as  a  counter-claim  to  be  available.  Thus,  the  defence 
that  the  mortgagee  has  received  a  conveyance  of  property 
or  payments  in  money,  which  should  be  applied  on  the  mort- 
gage debt,  may  be  taken  by  answer  without  filing  a  cross- 
bill.' And  where  a  defendant  in  his  answer  to  a  complaint 
to  foreclose  a  mortgage  alleges  that  the  debt  has  been  fully 


(N.  T.)  465  (1839) ;   s.   c.   34  Am.  » Trustees   of    old   Alms    House 

Dec.  355 ;  Hughes  v.  Edwards,  23  Farm  v.  Smith,  53  Conn.  434  (1884). 

U.  S.  (9  Wheat.)  489  (1824) ;  bk.  6  *  Low  v.  Allen,  26  Cal.  141  (1864). 

L.  ed.  142.     See  ante  chap.  iv.  *  Schmucker  v.  Seibert,  18  Kan. 

>  N.  Y.  Life  Ins.  &  Trust  Co.  v.  104  (1877)  ;  s.  c.  26  Am.  Rep.  765. 

Covert,  6  Abb.  (N.  Y.)  Pr.  N.  S.  154  »  Butler  v.    Price,  115  Mass.  578 

(1867) ;  s   c.  3  Abb.  App.  Dec.  (N.  (1874) ;  Pike  v.   Goodnow,  94  Mass. 

Y".)  350,  reversing  29  Barb.  (N.  Y.)  (12  Allen),  473  (1866). 

435  ;  Barrett  v,  Prentiss,  57  Vt.  297  '  Cason  v.  Chambers,  62  Tex.  305 

(1885),  (1884). 

«  Roddam  v.  Morley,  1  De  G.  &  J.  »  Edgertou  v.  Young,  43  111.  464 

1  (1856).  (1867). 


492  PAYMENTS HOW    PLEADED    EN    DEFENCE.     [§  412. 

paid,  he  will  be  entitled  to  prove  on  the  trial  that  the  plain- 
tiff received  money  at  different  times,  to  be  applied  as  pay- 
ments on  the  mortgage,  although  he  did  not  plead  such 
payments  as  a  counter-claim.*  Where  a  mortgage  contains 
a  stipulation  that  the  mortgagor  may  make  payments  before 
the  debt  falls  due,  at  his  option,  he  must  distinctly  and 
afifirmatively  elect  to  do  so  in  order  to  make  a  valid  tender 
of  the  whole  amount  secured ;  and  if  he  relies  upon  such 
election  and  a  tender  thereunder  as  a  defence  against  a 
foreclosure,  he  must  not  only  allege  it  in  his  answer,  but 
prove  it.* 

In  an  action  brought  to  foreclose  a  mortgage,  containing  a 
clause  making  the  principal  due  in  case  of  default  in  paying 
the  interest  after  a  certain  number  of  days,  it  is  not  a  valid 
defence  or  ground  of  relief  that  the  defendant  could  not  find 
the  holder  of  the  mortgage  until  after  the  time  for  the  pay- 
ment of  the  interest  had  expired,  where  the  answer  does  not 
set  out  a  trick  or  fraud  on  the  part  of  the  plaintiff  to  prevent 
the  payment  of  the  interest.* 

§  412.  Payment — How  proved  in  defence. — Where  the 
defendant  sets  up  satisfaction  of  the  debt  as  a  defence, 
the  only  question  being  one  of  fact,*  payment  may  be  proved 
by  parol,*  or  inferred  from  attending  circumstances.'  Thus, 
in  an  action  to  foreclose  a  mortgage,  which,  by  its  terms,  was 
given  to  secure  the  payment  of  moneys  according  to  the 
conditions  of  a  bond,  where  the  defence  of  payment  is  inter- 
posed, the  failure  of  the  plaintiff  to  produce  the  bond  will 
be  evidence  of  the  satisfaction  of  the  mortgage  debt,  and,  if 
unexplained,  will  be  conclusive  against  the  plaintiff's  right 


» Hendrix  v.  Gore,  8  Oreg.   406  »  Thornton  v.  Wood,  43  Me.  282 

(1880).  (1856) ;  Ackla  v.  Ackla,  6  Pa.  St. 

*  Post  V.  Springsted,  49  Mich.  90  228  (1847);  McDaniels  v.  Lapham,  21 
(1882).  Vt.  222  (1849). 

*  Dwight  V.  Webster,  32  Barb.  (N.  *  Waugh  v.  Riley,  49  Mass.  (8 
Y.)  47  (1860) ;  a.  c.  10  Abb.  (N.  T.)  Mete.)  290  (1844) ;  Morgan  v.  Davis, 
Pr.  128.  See  Ferris  v.  Ferris,  16  2  Ear.  &  McH.  (Md.)  9  (1781) ; 
How.  (N.  Y.)  Pr.  102  (1858).  Deming  v.  Comings,  11  N.  H.  474 

*  See  Wells  v.  Lawrence,  65  Iowa,  (1841). 
873  (1884). 


§4:13.]  ALLEGING    DISCHARGE   EST    DEFENCE.  493 

to  recover.'  But  the  presumption  of  payment  arising  from  the 
possession  of  the  notes  and  mortgage  by  the  mortgagor  may 
be  rebutted,'  as  may  also  the  entry  of  discharge  on  the 
record  by  the  mortgagee,'  even  where  such  discharge  was 
made  under  seal.* 

§  413.  Alleging  discharge  and  satisfaction  of  mortgage 
in  defence. — What  acts  amount  to  a  discharge  of  mortgage 
is  a  question  of  law  for  the  court.  The  simple  discharge  of 
a  mortgage  of  record  is  not  necessarily  a  satisfaction  of  the 
debt,  nor  evidence  of  its  payment,  although  it  may  be  a 
complete  bar  to  an  action  to  foreclose.*  Thus,  innocent  pur- 
chasers of  land  will  take  it  discharged  of  a  mortgage  lien 
which  has  been  satisfied  of  record,  although  the  satisfaction 
was  procured  by  fraud.* 

Where  a  mortgage  is  given  by  a  debtor  to  two  persons  to 
secure  the  payment  of  a  sum  of  money  owing  to  them  jointly, 
a  discharge  by  either  on  payment  to  him  of  the  amount 
of  the  joint  debt  will  be  valid.'  And  where  the  holder 
of  a  note  received  a  mortgage  with  the  understanding  that 
he  was  to  retain  it  as  security  for  the  payment  of- the  note, 
only  until  he  could  assure  himself  of  the  solvency  of  another 
party,  who  was  offered  as  surety,  and  having  satisfied  himself 
on  this  point,  he  obtained  the  signature  of  the  proposed 
surety  to  the  note  and  thereafter  kept  the  note  without  dis- 
charging the  mortgage  of  record,  it  was  held  that  this  was  an 
equitable  discharge  of  the  mortgage.*  But  where  a  mort- 
gagee agreed  to  discharge  a  mortgage  upon  the  consideration 
that  the  mortgagor  would  insure  his  life  to  secure  the  debt, 
which  insurance  was  never  obtained,  and  a  power  of  attorney 
was  written  upon  the  mortgage  authorizing  the  recorder  to 


'  Bergen  v.  Urbahn,  83  N.  Y.  49  *  Fleming  v.  Perry,  24  Pa.  St.  47 

(1880).  (1854). 

•Crocker  v.  Thompson,  44  Mass.  *  Mason  v.Beach,  55  "Wis.607  (1882). 

(3  Mete.)  224  (1841)  ;  Smith  v.  Smith,  «  Burton  v.  Reagan,  75    Ind.    77 

15  N.  H.  55(1844).  (1881). 

»  Robbinson  v.  Sampson,  23  Me.  '  Lyman  v.  Gedney,  114  111.  388 

388  (1844) ;  Trenton  Banking  Co.  v.  (1885). 

Woodruff,  2  N.  J,  Eq.  (1  H.  W.  Gr.)  «  Baile    v.    St.    Joseph's    Fire  & 

117  (1838).  Marine  Ins.  Co.,  73  Mo.  371  (1881). 


494  ALLEGING   DISCHARGE   IN   DEFXNOE.  [§413. 

enter  satisfaction  thereof,  which  was  never  delivered,  but  was 
retained  by  the  mortgagee,  and  a  new  note  was  taken  and  the 
old  one  was  marked  canceled,  but  was  not  surrendered,  it  was 
held  that  such  authorization  was  not  sufificient  to  show  a 
discharge  of  the  mortgage.' 

Where  the  owner  of  the  equity  of  redemption  pays  off  a 
mortgage  with  his  own  funds  for  the  purpose  of  re-pledging 
the  land,  such  payment  will  constitute  a  satisfaction  of  the 
mortgage  lien ;"  but  it  will  be  otherwise,  if  the  owner  of 
the  equity  of  redemption  pays  off  the  mortgage  with  the  funds 
of  a  third  person,  for  the  purpose  of  purchasing  the  mortgage 
for  such  third  person.  Under  such  circumstances  the  mort- 
gage will  not  be  considered  satisfied  nor  the  lien  discharged, 
either  as  to  the  owner  or  as  to  subsequent  incumbrancers.* 
Where  a  mortgagee,  after  a  foreclosure  sale  for  an  installment 
due  and  an  entry  on  the  premises,  conveyed  the  land  by 
warranty  deed,  it  was  held  that  such  deed  discharged  the 
mortgage  lien  and  released  the  indorsers  of  such  notes  as 
were  secured  by  subsequent  installments.* 

Where  a  party  holding  a  mortgage  discharges  it  of  record 
solely  for  the  purpose  of  giving  priority  to  a  second  mort- 
gage held  by  another  person,  the  first  mortgage  will  still  sub- 
sist as  between  the  parties  thereto  and  may  be  foreclosed 
against  the  mortgagor,  the  same  as  though  no  discharge  had 
been  made.*  And  where  a  mortgage  is  given  to  secure  a 
debt,  and  the  debt  subsequently  becomes  merged  in  a 
judgment,  the  mortgage  lien  will  not  be  thereby  discharged, 
but  will  stand  as  security  for  the  judgment.  So,  where  a 
settlement  is  had  between  a  mortgagor  and  a  mortgagee  and 
a  new  note  is  given  for  the  balance  due,  upon  which  a 
judgment  is  subsequently  taken  by  confession,  the  new 
note  and  judgment  will  not  operate  as  a  discharge  of  the 
mortgage.* 


'  National  Bank  v.  Dayton,   116  *  Bridgman  v.  Johnson,  44  Mich. 

111.  257  (1886).  491  (1880). 

«  Denton  v.  Cole,  30  N.  J.  Eq.  (3  *  Wood  v.  Wood,    61  Iowa,  56 

Stew.)  244  (1878).  (1883). 

3  Denton  v.  Cole,  30  N.  J.  Eq.  (3  «  Darst  v.  Bates,  95  m.  493  (1880). 
Stew.)  244  (1878). 


§  414.]  KELEASE    OF   PAET    OE   PREMISES.  405 

§  414.  Allegation  of  release  of  part  of  mortgaged 
premises. — A  proper  release  of  a  mortgage  discharges  the 
released  portion  of  the  mortgaged  premises  from  the  lien  of 
Ihe  mortgage  debt,  and  is  a  good  defence  to  a  foreclosure; 
but  a  fraudulent  release,  or  a  release  by  a  party  having  no 
authority  to  execute  the  same,  will,  of  course,  be  void.' 

And  a  release  by  a  mortgagee,  with  notice  of  subse- 
quent incumbrances,  will  not  give  priority  to  a  fourth  mort- 
gage over  the  lien  of  the  intermediate  incumbrances ;'  but 
where  the  holder  of  a  mortgage  takes  a  new  mortgage  as  a 
substitute  for  an  existing  mortgage  in  ignorance  of  an  inter- 
vening lien,  equity  will  restore  the  lien  of  the  first  mortgage,* 
because  a  court  will  always  keep  an  incumbrance  alive  to 
subserve  the  purposes  of  justice  and  to  give  effect  to  the  actual 
intention  of  the  parties.*  Thus,  the  payee  of  a  note  has  no 
authority  after  its  transfer  to  release  a  mortgage  executed 
to  secure  it.*  And  where  notes  and  a  mortgage  were  left 
with  an  attorney  with  power  to  cancel  the  original  mortgage 
upon  the  receipt  of  a  new  mortgage,  and  the  attorney 
canceled  the  original  mortgage  without  receiving  such  new 
mortgage,  it  was  held  that  such  cancellation  was  without 
authority.*     A  release  of  mortgaged  lands  at  the  instance  of 


•  Kendall  v.  Woodruff,  87  N.  Y.  1  As  to  a  fraudulent  entry  of  satis- 

(1881);  Kendall  v,  Niebuhr,  58  How.  faction  of  a  mortgage  and  its  effects, 

(N.  T.)  Pr.  156  (1879);  VanSlyke  v.  see  Hays  v.  O'Connor,  1  N.  Y.  Leg. 

VanLoan,  26  Hun  (K  Y.)  344(1882);  Obs.  505  (1843) ;   Remann  v.  Buck, 

Darst  V.  Bates,  95  111.  493  (1880) ;  master,  85  111.  403  (1877) ;   Fine  v. 

Meacham  V.  Steele,  93  111.  135  (1879) ;  King,  33  N.  J.  Eq.  (6  Stew.)  108 

Hawhev.  Snydaker,  86111. 197(1877);  (1880) ;  Wier  v.  Mosher,  19  Wis.  311 

Dewey  v.Ingersoll,42  Mich.l7  (1879);  (1865). 

Benton  v.Nicoll,  24 Minn.  221  (1877);  »  Taylor  v.  Wing,  84  K  Y.  471 

Mount  V.  Potts,  23  N.  J.  Eq.  (8  C.  (1881).     See  Bernhardt  v.  Lymbur- 

E.  Gr.)  188  (1872) ;  Stillman  v.  Still-  ner,  85  N.  Y.  172  (1881). 

man,  21  N.  J.  Eq.  (6  C.  E.  Gr.)  126  «  Geib  v.  Reynolds,  35  Minn.  331 

(1870)  ;  Hoy  v.  Bramhall,  19  N.  J.  (1886). 

Eq.  (4  C.  E.  Gr.)  563  (1868) ;  Gaskill  *  Sidener  v.  Pavey,   77  Ind.    241 

V.  Sine,  13  N.  J.  Eq.  (2  Beas.)  400  (1881). 

(1861) ;  Johnson  v.  Olcott,  8  N.  J.  «  Hagerman  v.  Sutton,  91  Mo.  513 

Eq.  (4  Halst.)  561  (1851) ;  Mcllvain  (1887). 

V.  Mutual  Assurance  Co.,  93  Pa.  St.  *  Foster   v.   Paine,    63  Iowa,   85 

30  (1880) ;    Kelley  v.  Whitney,  45  (1884). 
Wia.  110  (1878). 


496  RELEASE    OF    PART    OF    PREMISES.  [§415. 

the  mortgagor  is  not  a  good  defence  in  an  action  to  fore- 
close, where  there  is  nothing  to  indicate  that  the  release  was 
against  the  rights  of  any  of  the  defendants.' 

If  a  release  of  a  mortgage  is  relied  upon  as  a  defence  in 
an  action  for  foreclosure,  the  answer  should  either  give  a 
brief  description  of  the  release  with  averments  of  the  facts 
connected  therewith,  or  should  set  it  out  at  length.  An 
answer  which  merely  alleges  that  the  mortgage  is  of  no 
binding  effect  and  is  not  a  lien  upon  the  premises  described, 
simply  states  a  conclusion  of  law  and  is  insufificient.*  Where 
a  mortgagee  of  land  releases  a  portion  thereof  from  the 
operation  of  his  mortgage,  with  actual  or  constructive  notice 
that  any  other  part  thereof  has  a  right  to  exemption  from 
contribution  to  the  payment  of  his  mortgage,  such  exemp- 
tion may  be  pleaded  as  a  defence  to  an  action  to  foreclose, 
and  the  mortgagee  will  thereby  be  estopped  from  enforcing 
his  mortgage  against  such  exempt  portion.* 

§  415.  Alleging  release  of  part  of  mortgaged  premises 
in  defence. — The  general  rule  that  the  release  of  the  part  of 
mortgaged  premises  still  owned  by  the  mortgagor,  will 
operate  as  a  discharge  of  the  part  aliened  by  him  does  not 
apply,  unless  the  releasor  has  knowledge  of  the  fact  of  the 
alienation  or  notice  sufficient  to  put  him  on  inquiry.*  A 
release  of  a  part  of  mortgaged  premises  given  with  knowledge 
of  a  prior  conveyance  of  another  part  is  not  a  technical  dis- 
charge of  the  part  conveyed ;  nor  will  it  amount  to  an  equi- 
table release  or  discharge,  unless,  upon  the  principles  of 
natural  equity  and  justice,  it  ought  thus  to  operate  against  the 
mortgagee  giving  the  release.*  Where  a  release  is  made  by 
the  mortgagee  of  a  portion  of  the  premises,  with  full  knowl^ 
edge  of  a  previous  sale  of  the  remaining  portion,  the  payment 
of  the  purchase  money  and  the  fact  that  the  vendee  relied 
upon  the  transfer  of  the  lien  of  the  mortgage  to  the  unsold 


'  Botsford  V.  Botsford,  49  Mich.  *  Kendall  v.  Niebuhr,  45  N.   Y. 

29  (1882).  Supr.  Ct.  (13  J.  &  S.)  542  (1879). 

«  Caryl  v.  Williams,  7  Lans.  (N.  «  Kendall  v.  Woodruff,  87  N.  Y.  1 

Y.)  416  (1873).  (1882) ;  Schrack  v.  Shriner,  100  Pa. 

» George   v.  Wood,  91  Mass.  (9  St.  451  (1882). 
Allen).  81  (1864). 


§  416.]      KELEASE  OF  PAET  OF  PEEMISEa        497 

portion,  will  discharge  the  entire  mortgaged  premises  from 
the  lien  of  the  mortgage.*  If  the  part  of  the  premises 
released  is  not  sufficient  in  value  to  discharge  the  debt,  such 
release  will  be  a  discharge  pro  tanto  of  the  portion  previously 
conveyed.* 

In  determining  whether  the  release  of  the  remaining 
portion  discharges,  pro  tanto,  the  portion  conveyed,  the  valu- 
ation of  the  part  released  must  be  taken  at  the  time  when 
the  mortgage  was  given.* 

A  mortgagee  may  release  a  part  or  the  whole  of  the  mort- 
gaged premises  without  inquiring  whether  a  junior  incum- 
brancer has  intervened,  because  it  is  the  duty  of  the 
latter,  if  he  intends  to  claim  an  equity  through  the  prior 
incumbrance,  to  give  the  holder  thereof  notice  in  order  that 
he  may  act  understandingly ;  and  if  he  fails  to  do  so,  the  con- 
sequence of  his  neglect  must  be  visited  upon  himself.* 

§  416.  Application  of  proceeds  on  release  of  part  of 
mortgaged  premises. — An  agreement  by  a  mortgagee  with 
a  mortgagor  to  release  portions  of  the  mortgaged  premises, 
on  the  payment  of  specified  sums,  may  be  enforced.  Thus, 
where  an  arrangement  was  made  with  a  mortgagee  by  which 
he  was  to  receive  the  proceeds  of  certain  lots  whenever  sold, 
and  to  release  one  lot  from  the  lien  of  his  mortgage  for  every 
$1,000  paid  to  him,  and  a  larger  amount  of  such  proceeds 
was  received  by  him  in  bonds,  it  was  held  that  the  excess 
should  be  applied  in  discharge  of  the  mortgage.'  In  a 
recent  case  in  New  York,'  the  facts  were  as  follows:  A 
mortgage  originally  covered  several  pieces  of  land,  all  of 
which,  except  two  pieces,  were  released  on  sales  thereof 


>  Schrack  v.  Shriner,  100  Pa.  St.  »  Cook  v.  Woodruff,  97  Ind.  134 

451  (1883).  (1884).     It  was  held  in  this  case  that 

*  Martin's  Appeal,  97  Pa.  St.  85  the  plaintiff  was  subject  to  an  exam- 
(1881).  ination  in  regard  to  an  indemnifying 

»  Stevens  v.  Cooper,  1  Johns.  Ch.  bond,  executed  by  parties  in  interest 

(N.    Y.)    435    (1815) ;    Parkham  v.  to  secure  the  payment  of  the  bonds 

Welch,    36   Mass.    (19    Pick.)    331  received  on  the  sales  of  the  lots,  to 

(1837);    Johnson    v.    Williams,    4  ascertain  what  application  he  had 

Minn.  360  (1860).  made  of  the  proceeds  thereof. 

*  Mcllvain  v.  Assurance  Co.,  93  *  Griswold  v.  Onondaga  Co.  Sav- 
Pa.  St.  30  (1880).  ings  Bank,  93  N.  Y.  801  (1883). 


498  APPLYING    PKOCEEDS    OF    RELEASE.  [§417. 

made  by  the  mortgagor,  and  the  proceeds  of  such  sales  were 
applied  upon  the  mortgage  debt.  Another  parcel  was  sold 
and  this  also  was  released  in  accordance  with  the  contract  and 
a  mortgage  was  taken  for  the  purchase  money,  which  was 
assigned  to  the  original  mortgagee.  The  original  mortgagor 
was  at  this  time  indebted  to  the  original  mortgagee  upon 
an  unsecured  account;  no  application  of  the  assigned 
mortgage  was  made  by  either  party.  About  ten  years  after 
such  assignment  the  mortgagor  conveyed  the  remaining 
parcel  of  land  and  requested  the  plaintiff  to  execute  a 
discharge  of  the  original  mortgage  on  the  ground  that  it  was 
paid  by  the  assignment  of  the  purchase  money  mortgage. 
This  the  plaintiff  declined  to  do,  but  for  about  seventeen 
years  made  no  claim  under  his  mortgage.  In  an  action  to 
foreclose  such  mortgage  it  was  held,  that  equity  required 
the  proceeds  of  the  assigned  mortgage  to  be  applied  as 
a  payment  upon  the  original  mortgage  instead  of  upon  the 
open  account.' 

§  417.  Denial  of  personal  liability  on  contract  of 
assumption. — A  mortgagee  has  a  right  to  proceed  in  equity 
against  one  who  has  assumed  and  agreed  to  pay  his  mort- 
gage.' But  where  the  mortgagee  seeks  to  hold  the  grantee 
of  the  mortgaged  premises  personally  liable,  such  grantee 
may  deny  on  the  foreclosure  of  the  mortgage,  tnat  he 
assumed  the  payment  of  the  mortgage  debt  or  any  part 
thereof,  and  that  he  is  personally  liable.     And  where  the 


>  Griswold  v.  Onondaga  Co.  Sav-  171  (1852) ;    Cornell  v.   Prescott,  3 

ings  Bank,  93  N.  Y.  301  (1883).  Barb.  (N.  Y.)  16  (1847);  Marsh  v. 

It  is  not  settled  whether  the  court  Pike,   10   Paige  Ch.    (N.   Y.)    597 

•will  in  all  cases,  as  between  a  mort-  (1844) ;   King  v.  Whitely,  10  Paige 

gage  and  an  open  account,  apply  a  Ch.  (N.  Y.)  465  (1843) ;   Halsey   v. 

general  payment  upon  the  mortgage.  Reed,  9  Paige  Ch.  (N.  Y.)  446  (1842); 

See  Dows  v.  Morewood,  10  Barb.  Curtis  v.  Tyler,  9  Paige  Ch.  (N.  Y.) 

(N.    Y.)    183    (1850) ;   Griswold    v.  483  (1842). 

Onondaga  Co.  Savings  Bank,  93  N.  But  this  right  does  not  embrace  a 

Y.  301  (1883).    See  ante  §  409.  claim  to  the  purchase  money  on  a 

*  Burr  V.  Beers,  24  N.  Y.  178  (1861).  sale  of  the  mortgaged  premises  or  to 

See  Garnsey  v.  Rogers,  47  N.  Y.  236  the  vendor's  lien  to  secure  it.    Emley 

(1872) ;  Trotter  v.  Hughes,  12  N.  Y.  v.  Mount,  32  JST.  J.  Eq.  (5  Stew.) 

74  (1854) ;  RusseU  v.  Pistor,  7  N.  Y.  470  (1880). 


§  417.]  DENYING    PEESONAL   LIABILITY.  499 

deed  makes  the  grantee  liable  for  the  mortgage  debt,  he  may 
set  up  in  defence  and  show  by  parol,  that  the  deed  under 
which  he  holds  does  not  express  the  contract  of  the  parties.* 
Where  the  defendant  has  purchased  the  mortgaged 
premises  and  agreed  to  pay  the  mortgage  debt  or  a  portion 
thereof,  his  liability  depends  upon  the  nature  of  the  dealing 
in  which  the  assumption  was  made,  and  is  subject  to  any 
condition  or  defeasance  attached  thereto."  If  the  consider- 
ation for  the  assumption  fails,  or  there  is  a  good  defence  to 
it,  as  between  the  parties,  it  is  questionable  whether  it  can  be 
enforced  by  the  mortgagee.*  And  a  contemporaneous  agree- 
ment by  a  separate  instrument  will  qualify  or  control  it  even 
as  to  the  mortgagee.*  Hence,  one  who  has  purchased  a 
part  of  the  mortgaged  lands  and  agreed  with  the  mortgagor  to 
assume  and  pay  the  whole  mortgage,  may  discharge  his  land 
from  the  consequences  of  that  assumption  by  an  agreement 
made  with  the  grantor  while  the  latter  was  still  the  owner 
of  the  residue;  and  the  grantee  of  such  residue,  after  such 
discharge,  can  not  claim  the  benefit  of  the  assumption, 
because  the  grantee  succeeds  only  to  the  equities  of  his 
grantor  existing  at  the  time  of  the  conveyance,  and  that 
without  regard  to  any  question  of  notice.* 


'  Selchow  V,  Stymus,  26  Hun(N.  379(1880).  SeeWadsworthv.  Nevin, 

Y.)  145  (1881).  64  Iowa,  64  (1884). 

» Judson  V.  Dada,  79  N.  Y.  373,  ■•  Judson  v.  Dada,  79  N.  T.  373, 

379  (1880) ;  Garnsey  v.  Rogers,  47  379  (1880) ;  Flagg  v.  Munger,  9  N. 

N.  Y.   233  (1872).    See  ante  chap.  Y.  483  (1854). 

xi.  *  Judson  v.  Dada,  79  N.  Y.  873, 

»  Judson  V.  Dada,  79  N.  Y.  373,  879  (1880). 


CHAPTER   XX. 


ANSWERS  AND   DEFENCES. 

ADVERSE    AND    PARAMOUNT    CLAIMS  OF   TITLE-DEFECTIVE  TITLE- 
FIXTURES-EVICTION— OUTSTANDING  TITLE— WANT  OF  TITLE. 


§  418.  Adverse  and  paramount 
claims  of  title  can  not  be 
litigated  in  a  foreclosure. 

419.  Defective  title  of  mortgagor 

can  not  be  set  up  iu  deience. 

420.  Claim  of  paramoimt  title  can 

not  be  pleaded  in  answer. 
431.  Effect  of  making  owner  of 
paramount  title  a  defendant. 

423.  Paramount  title  by  widow's 

right  of  dower. 
433.  Answers  by  prior  lien  holders 
as  defendants. 

424.  Pleading    in    defence    para- 

mount   title     subsequently 
acquired  by  mortgagor. 

425.  What  claims  as  to  priority 

may  be  set  up  in  answer. 

436.  Pleading  ownership  of  fix- 
tures in  answer. 

427.  Gas  fixtures,  burners,  brack- 
ets and  chandeliers. 


§  428.  Fixtures  where  land  leased 
for  a  term  of  years. 
439.  Settlement    of    equities    be- 
tween mortgagees. 

430.  Demiuid  in  answer  for  sale 

in  inverse    order  of  aliena- 
tion. 

431.  Allegation     of     outstanding 

title  or  incumbrance. 

432.  Wlien  purchaser  may  set  up 

outstanding    title  as  a  de- 
fence. 

433.  Payment  of  an  outstanding 

claim    by    purchaser  as    a 
defence. 

434.  Eviction  as  a  defence. 

435.  Defence  of  want  of  title. 

436.  Allegation     of    failure      of 

title. 

437.  Denial  of  title  in  mortgagor 

at  the  time    of    executing 
mortgage. 


§  418.  Adverse  and  paramount  claims  of  title  can  not 
be  litigated  in  a  foreclosure. — It  is  well  settled,  that  the 
object  of  an  action  to  foreclose  a  mortgage  is  to  bar  the  mort- 
gagor and  all  parties  claiming  under  him,  subsequent  to  the 
mortgage,  and  that  in  such  an  action  the  plaintiff  can  not  be 
required  to  litigate  questions  of  adverse  or  paramount  title  ;' 
neither  can  the  legal  title  of  the  mortgagee  be  questioned.' 


'  Hekla  Fire  Ins.  Co.  v.  Morrison, 

58  Wis.  133  (1888);  Macloon  v.  Smith, 
49  Wis.  200  (1880).  See  ante  chap.  ix. 
2  Skelton  v.  Scott,  18  Hun  (N.  Y.) 
875  (1879)  ;  Cross  v.  Robinson,  21 
Conn.  379  (1851)  ;  Palmer  v.  Mead. 
7   Conn.    149    (1828);    Broome    v. 


Beers,  6  Conn.  198  (1826).  See  Hol- 
comb  V.  Holcomb,  2  Barb.  (N.  Y.) 
20  (1847) ;  Eagle  Fire  Ins.  Co.  v. 
Lent,  6  Paige  Ch.  (N.  Y.)  637  (1837); 
Frelinghuysen  v.  Colden,  4  Paige 
Ch.  (N.  Y.)  206  (1833) ;  Lange  v. 
Jones.   5    Leigh    (Va.)  193   (1834); 


500 


§419.]  PLEADING   ADVEESE   TITLE.  501 

A  foreclosure  suit  is  not  a  proper  proceeding  in  which  to 
litigate  the  adverse  and  paramount  title  of  a  defendant  who 
claims  under  the  foreclosure  of  a  prior  mortgage,  from 
which  the  complainant  does  not  seek  to  redeem ;'  and  in  a 
suit  to  foreclose,  the  mortgagor,  though  in  possession,  can  not 
defend  merely  on  the  ground  that  the  lien  of  the  mortgage 
has  been  divested  by  the  foreclosure  of  a  prior  mortgage.* 
The  reason  for  this  would  seem  to  be  that  in  the  usual  form 
of  mortgage,  the  mortgagor  covenants  to  warrant  and 
defend,  and  one  who  has  covenanted  to  defend  the  title 
against  all  adverse  claims,  is  estopped  from  alleging  title  para- 
mount in  a  third  person ;'  and  where  an  action  at  law  is 
brought  to  recover  possession  of  the  mortgaged  premises, 
the  mortgagor  will  be  estopped  by  his  deed  from  denying 
that  he  had  title  to  the  mortgaged  premises  at  the  time  of 
making  the  mortgage.* 

A  mortgagor  who  is  bound  to  pay  the  taxes  upon  the 
mortgaged  premises  can  not  acquire  and  hold  a  tax  title 
as  against  his  mortgagee  ;  his  purchase  of  the  title  at  a  tax 
sale  will  operate  merely  as  a  payment  of  the  taxes.*  A 
mortgagor  can  not  set  up  a  matter  going  behind  the  mort- 
gage as  a  defence  to  an  action  of  foreclosure,  where  there 
has  been  neither  fraud  nor  misrepresentation.* 

§  419.  Defective  title  of  mortgagor  can  not  be  set  up 
in  defence. — In  an  action  to  foreclose  a  mortgage  the  mort- 
gagor can  not  plead  as  a  defence  a  defect  in  his  title  at  the 
time  of  the  execution  and  delivery  of  the  mortgage ;'  and 
the  court  has  no  authority  to  determine  a  controversy, 
between  defendants  jointly  liable  on  a  note  which  the  mort- 
gage was  given  to  secure,  as  to  which  of  them  was  the 
principal  debtor  and  which  the  surety.* 


Stewart's  Heirs  v.  Coalter,  4  Rand.  » Renshaw  v.  Stafford,  30  La.  An. 

(Va.)  74(1826).  858(1878);  Dunn  v.  SneU,  74  Me. 

I  Bell  V.  Pate,  47  Mich.  468  (1882).  22  (1882) ;  Allison  v.  Armstrong,  28 

» Herber    v.    Christopherson,    30  Minn.  276  (1881), 

Minn.  395  (1883).  •  Northrop  v.  Sumney,  27  Barb. 

»  Macloon  v.  Smith,  49  Wis.  200  (N.  Y.)  196  (1858). 

(1880).  ""  Dime  Savings  Bank  of  Brooklyn 

*  Concord  M.  F.  Ins.  Co.  v.  Wood-  v.  Crook,  29  Hun  (N.  Y.)  671  (1883). 

bury,  45  Me.  447  (1858).  *  Hovenden  v.  Knott,  12  Oreg.  267 


502  DETEOnVE  TITLE  CAN  NOT  BE  PLEADED.       [§  420. 

The  foreclosure  of  a  mortgage  is  not  a  proper  action  for 
the  settlement  of  a  disputed  title,  and  there  is  no  reason 
why  the  court  should  entertain  a  question  concerning  the 
title  to  the  premises.  Thus,  a  mortgagee  seeking  to  fore- 
close his  mortgage  and  having  no  interest  in  a  litigation 
between  the  defendants  on  a  cross-bill  by  one  of  them  for 
the  specific  performance  of  an  alleged  contract  for  the  sale 
of  the  equity  of  redemption,  will  not  be  compelled  to  wait  for 
a  decree  of  sale  until  such  other  litigation  has  been  decided.* 
The  purchaser  at  a  sale,  made  under  a  decree  of  foreclosure, 
will  acquire  whatever  interest  the  mortgagor  had  in  the 
premises  at  the  time  of  the  execution  of  the  mortgage.'  A 
title,  which  was  before  defeasible,  will  become  absolute  upon 
sale  ;  if  there  is  a  dispute  respecting  its  nature  and  extent, 
it  must  be  adjudicated  in  some  form  of  action  in  which  the 
pleadings  and  proceedings  are  adapted  to  that  purpose.* 

§  420.  Claim  of  paramount  title  can  not  be  pleaded  in 
answer. — The  only  questions  that  can  be  determined  con- 
cerning a  title  upon  the  foreclosure  of  a  mortgage  are  such  as 
affect  the  equity  of  redemption  ;  the  plaintiff  has  no  right 
to  make  a  third  person,  who  claims  an  adverse  title  not 
derived  from  either  the  mortgagor  or  the  mortgagee  and 
who  can  not  be  affected  by  the  judgment,  a  defendant  for  the 
purpose  of  litigating  his  claim  to  a  paramount  title.* 


(1885).     See  Handley  v.  Munsell,  109  3  Barb.  Ch.  (N.  Y.)  438  (1848);  Bank 

111.  362  (1884).  of  Orleans  v.  Flagg,  3  Barb.  Ch.  (N. 

'  Handley  v.  Munsell,  109  111.  362  Y.)  316,   318  (1848) ;  Brundage  v. 

(1884).     See  N.  Y.  Code  Civ.  Proc.  Domestic  and    Foreign  Missionary 

§§  521, 1205.  Society,  60  Barb.  (N.  Y.)  204  (1871); 

*  N.  Y.  Code  Civ.  Proc.  §  1632.  Holcomb  v.  Holcomb,  2  Barb.  (N. 
»  Dime  Savings  Bank  of  Brooklyn  Y.)  20,  22  (1847)  ;  Meigs  v.  Willis, 

V.  Crook,  29  Hun  (N.Y.)  671  (1883).  66  How.  (N.Y.)  Pr.  466  (1884);  Em- 

*  Emigrant  Industrial  Savings  igrant  Industrial  Savings  Bank  v. 
Bank  v.  Goldman,  75  N.  Y.  127  Clute,  33  Hun  (N.  Y.)  82  (1884) ; 
(1878) ;  Ratkbone  v.  Hooney,  58  N.  Eagle  Fire  Ins.  Co.  v.  Lent,  6  Paige 
Y.  463  (1874) ;  Merchant's  Bank  v.  Ch.  (N.  Y.)  635  (1837) ;  Jones  v.  St. 
Thomson,  55  N.  Y.  7  (1873) ;  Frost  John,  4  Saudf.  Ch.  (N.  Y.)  208 
V.  Koon,  30  N.  Y.  428  (1864) ;  Lewis  (1846);  City  of  San  Francisco  v.  Law- 
V.  Smith.  9  N.  Y.  502  (1854) ;  s.  c.  ton.  21  Cal.  589  (1863) ;  s.  c.  79 
61  Am.  Dec.  706  ;  Corning  V.  Smith,  Am.  Dec.  187;  Bozarth  v.  Lan- 
6  N.  Y.  82  (1851) ;  Banks  v.  Walker,  ders,   113  Bl.  181  (1885);  Banning 


§  421.]  PLEADLNa   PARAMOUNT   TITLE.  503 

The  only  proper  parties  to  a  foreclosure  are  the  mortgagor 
and  the  mortgagee,  and  those  who  have  acquired  rights  or 
interests  under  them  subsequent  to  the  execution  and  delivery 
of  the  mortgage,  for  they  are  the  only  persons  who  have  any 
rights  or  obligations  growing  out  of  the  mortgage,  or  who 
can  be  affected  in  any  manner  by  the  litigation.  A  stranger 
claiming  adversely  to  the  title  of  the  mortgagor  can  in 
no  way  be  affected  by  the  foreclosure  suit.  It  can  make  no 
difference  to  him  whether  the  mortgage  is  valid  or  invalid, 
whether  it  is  discharged  or  foreclosed,  or  whether  the  estate 
mortgaged,  the  only  estate  which  can  be  affected  by  the 
decree,  remains  in  the  mortgagor,  or  is  transferred  to  another. 
As  such  adverse  claimant  is  a  stranger  to  the  mortgage  and 
to  the  mortgaged  estate,  he  can  have  no  interest  in  the  sub- 
ject matter  of  the  action ;  there  is  no  privity  between  him 
and  the  plaintiff,  and  the  plaintiff  has  no  right  to  make  him  a 
party  defendant  to  a  foreclosure,  for  the  purpose  of  trying 
his  adverse  title.* 

§  421.  Effect  of  making  owner  of  paramount  title  a 
defendant. — But  w  here  a  person  claiming  a  paramount  title 
is  made  a  party  to  a  foreclosure,  under  an  allegation  that  he 


V.    Bradford,   21  Minu.  308  (1875) ;  444  (1864) ;  Lewis  v.  Smith.  9  N.  T. 

6.    c.    18  Am.    Rep.    398  ;    Dorr  v.  502  (1854) ;  s.  c.  61  Am.    Dec.  706  ; 

Leach,    58  N.  H.   18  (1878);   Kins-  Corning  v.  Smith,  6  N.  Y.  82(1851); 

ley  V.  Scott,  58  Vt.  470(1886);  Hekla  Holcomb  v.  Holcomb,  2  Barb.  (N. 

Fire  Ins.  Co.  v.  Morrison,  56  Wis.  Y.)  20  (1847) ;  Eagle  Fire  Ins.  Co.  v. 

133  (1882);  Macloon  v.  Smith,   49  Lent,  6  Paige  Ch.  (N.  Y.)  635  (1837); 

Wis.  200  (1880) ;  Roberts  v.  Wood,  Hibernia  S.  &  L.  Co.  v.  Ordway,  38 

38  Wis.  60  (1875) ;  Supervisors  v.  Cal.  79  (1869);  City  of  San  Francisco 

MineralPointR.  R.  Co.,24Wis.  93,  v.    Lawton,    21    Cal.    589    (1863); 

120,  121   (1869);  Roche  v.    Knight,  s.   c.  79  Am.  Dec.  187;  Wright  v. 

2lWis.  324(1867);  Palmer  V.  Yager,  Dudley,    8  Mich.    74,    115    (1860); 

20  Wis.  91  (1865) ;  Pelton  v.  Farmin,  Chamberlain    v.     Lyell,     3    Mich. 

18Wis.222(1864);  Straight  V.  Harris,  448     (1855);     Banning    v.     Brad- 

14  Wis.  509  (1861)  ;  Strobe  v.  Dow-  ford,  21  Minn.  308  (1875) ;  Newman 

ner,  13  Wis.  10  (1860);  s.  c.  80  Am.  v.   Home   Ins.    Co.,   20  Minn.    422 

Dec.  709  ;  Peters  v.  Bowman,  98  U.  (1874) ;  Pelton  v.  Farmin,   18  Wis. 

S.  (8  Otto),  56  (1878);  bk.  25  L.  ed.  222  (1864) ;  1  Dan.  Ch.  Pr.  (3d  Am. 

91  ;  Dial  v.  Reynolds,    96  U.  S.   (6  ed.)  239,  330,  331,  582,  605  ;    Story 

Otto),  340  (1877)";  bk.  25  L.  ed.  644.  Eq.  PI.  §§  226,  227,  230,  231,  262, 

See  ante  chap.  ix.  513,  517,  519. 
1  Frost  V.  Koon,  30  N.   Y.  428, 


d04  owner  of  adverse  title  defendant.     L§  -121. 

claims  an  interest  in,  title  to,  or  a  lien  upon  the  property 
mortgaged  subsequent  to  the  plaintiff's  mortgage,  and  such 
party  answers  by  filing  a  general  denial,  the  decree  will  be 
binding  on  him,  if  a  judgment  is  rendered  against  all 
the  defendants  foreclosing  their  equity  of  redemption,  and 
he  will  not  be  again  entitled  to  litigate  matters  which  he 
could  have  set  up  in  the  foreclosure.'  And  where  in  an 
action  of  foreclosure  the  defendants,  claiming  under  a  title 
paramount  to  the  mortgage,  set  up  their  claim  by  answer, 
and  the  same  was  litigated  without  objection,  and  decided  in 
their  favor,  the  judgment  should  not  be  reversed  on  appeal 
on  the  ground  that  the  question  could  not  properly  be 
litigated  in  the  action.  Both  parties  having  appeared  and 
having  actually  litigated  the  issue  in  this  form,  will  be  bound 
by  the  judgment." 

But  where  a  party,  who  is  made  a  defendant  as  a  subsequent 
incumbrancer  or  purchaser,  sets  up  in  his  answer  a  claim  of 
title  prior  to  the  mortgage,  such  title  can  not  properly  be 
investigated,  and  the  complaint  of  the  plaintiff  should  be 
dismissed  as  to  such  defendant,  unless  the  plaintiff  is  prepared 
to  prove  that  such  claim  in  fact  arose  subsequent  to  the  mort- 
gage. Where  this  is  not  done  and  a  judgment  in  the  usual 
form  is  entered  against  all  the  defendants,  it  will  not  bind 
his  prior  interest  and  will  be  reversed  on  appeal,  even 
though  made  after  a  hearing  on  the  pleadings  and  proofs,* 
because  there  can  be  no  foundation  in  the  complaint  for  a 
decree  upon  a  question  of  paramount  title.* 


>  Wolfinger  v.  Betz,  66  Iowa,  594  Jordon  v.  VanEpps,  85  N,  T.  427, 

(1885).      See    Newby   v.    Caldwell,  435(1881). 

54    Iowa,    102    (1880);    Mally    v.  » Corning  v.  Smith,    6  N.  Y.  82 

Mally,  52  Iowa,  654  (1879) ;  Patten  (1851).       See    Merchants'    Bank  v. 

V.  Loughridge,  49  Iowa,  218  (1878) ;  Thomson,  55  N.  Y.  7  (1873) ;  Barker 

Painter    v.    Hogue,    48    Iowa,    426  v.    Burton,   67  Barb.  (N.    Y.)   458 

(1878);     Lawrence    Savings    Bank  (1877) ;  Lee  v.  Parker,  43  Barb.  (N. 

V.    Stevens,    46   Iowa,    429    (1877);  Y.)  611  (1865);   Summers  v.  Brom- 

Hackworth  v.  Zollars,  30  Iowa,  433  ley,  28  Mich.  125  (1873) ;  Wurcherer 

(1870).  V.    Hewitt,    10    Mich.    453    (1862); 

^  Helck  V.  Reinheimer,  105  N.  Y.  Chamberlain  v.   Lyell,  3  Mich.  448 

470  (1887).     See  Barnard  v.  Onder-  (1855). 

donk,   98   N.   Y.   158,  163    (1885);  *  See  cases  cited  above;  also  Moran 


§  421.]       OWNER  OF  ADVERSE  TITLE  DEFEND A]?n?. 


505 


In  an  action  to  foreclose  a  mortgage  the  validity  of  a  trust 
deed  executed  prior  to  the  mortgage  can  not  be  tried,  where 
there  is  no  allegation  of  fraud.*  The  validity  of  such  a  deed 
is  a  paramount  question  of  law  and  should  be  decided 
in  an  action  for  ejectment.'  A  foreclosure  is  not  a  proper 
proceeding  in  which  to  litigate  the  adverse  and  paramount 
title  of  a  defendant  who  claims  under  the  foreclosure  of 
a  previous  mortgage,  from  which  the  plaintiff  does  not 
seek  to  redeem.* 

A  person  who  accepts  a  mortgage  on  real  estate  will  be 
estopped  from  claiming  title  thereto.*     And  a  mortgagee  in 


V.  Palmer,  13  Mich.  367  (1865); 
Wright  V.  Dudley,  8  Mich.  115 
(1860). 

>  Helck  V.  Reinheimer,  105  N.  Y. 
470  (1887). 

In  this  case  the  General  Term,  [see 
23  N.  Y.  Week.  Dig.  473 ;  s.  c.  40 
Hun  (N.  Y.)  637  (1886)],  on  appeal 
from  the  judgment  at  Special 
Term,  decided  that  the  question 
of  the  validity  and  effect  of  the 
trust  deed  sliould  not  have  been 
tried  in  this  action;  the  interests  of 
those  claiming  under  that  deed,  not 
being  subsequent  to  the  mortgage, 
but  being  adverse  to  it,  the  complaint 
should  have  been  dismissed  with 
costs  as  to  the  two  defendants  whose 
interests  were  alleged  to  be  adverse 
to  the  mortgagor.  No  decision  was 
made  on  the  merits,  and  as  to  the 
other  defendants  the  usual  decree  of 
foreclosure  was  granted.  Judgment 
was  entered,  in  conformity  with  this 
decision,  containing  a  provision  that 
the  judgment  should  not  prejudice 
any  parties  who  might  be  interested 
under  the  trust  deed,  nor  involve  its 
validity  or  effect.  The  Court  of  Ap- 
peals say  :  "  We  do  not  concur 
in  the  view  taken  by  the  court 
at  General  Term.  If  the  defen- 
dants had  claimed  that  they  had 
been   improperly  made  parties  de- 


fendant, because  their  rights  were 
paramount  and  not  subsequent  to 
the  mortgage  and  could  not  properly 
be  litigated  in  this  action,  it  might, 
as  before  stated,  have  been  proper  to 
dismiss  the  complaint  with  costs, 
as  to  them,  for  that  reason.  But  in 
this  case,  instead  of  taking  any  such 
ground,  they  themselves,  in  their 
answer,  set  up  their  claims  under 
the  trust  deed,  and  asked  that  they 
be  adjudicated  upon,  and  demanded 
judgment  that  the  mortgaged  prem- 
ises be  freed  from  the  mortgage, 
and  that  it  be  discharged  of  rec- 
ord, and  on  the  trial  both  parties 
litigated  the  question,  and  the 
defendants  obtained  judgment  in 
their  own  favor  thereon.  Under 
these  circumstances  we  think  that  it 
was  too  late  to  take  the  ground  that 
the  dismissal  of  the  complaint,  as  to 
them,  should  be  sustained  on  the 
ground  that  the  questions  could  not 
properly  be  litigated  in  this  action." 
See  Barnard  v.  Onderdonk,  98  N. 
Y.  158,  163  (1885) ;  Jordan  v.  Van 
Epps,  85  N.  Y.  427,  435,  436  (1881). 

*  Davison  v.  The  Associates  of  the 
Jersey  Co.,  71  N.  Y.  333,  340  (1877). 
See  also  Helck  v.  Reinheimer,  105 
N.  Y.  470  (1887). 

3  Bell  V.  Pate,  47  Mich.  468  (1882). 

<Voss    V.    Eller,    109    Ind.     260 


506  PARAMOUNT  TITLE  BY  DOWEE.    [§§  422-423. 

possession  of  fands,  being  required  to  pay  taxes  thereon, 
can  not  set  up  against  the  mortgagor  a  tax  title  acquired 
while  thus  in  possession.' 

§  422.  Paramount  title  by  widow's  right  of  dower. — 
Where  a  married  woman  was  made  a  party  to  an  action  to 
foreclose  a  mortgage,  under  the  general  allegation  that  she 
had,  or  claimed  to  have,  some  interest  in  or  lien  upon  the 
mortgaged  premises,  or  some  part  thereof,  which  had 
accrued  subsequently  to  the  lien  of  the  mortgage,  and  she 
answered,  setting  forth  a  statement  of  facts  upon  which 
she  claimed  a  right  of  dower  in  the  property  superior  to 
the  mortgage,  and  upon  a  trial  of  the  issues  thus  pre- 
sented, introduced  evidence  having  some  tendency  to 
establish  the  correctness  of  her  answer,  and  the  court 
directed  a  judgment  in  the  usual  form,  barring  and  foreclos- 
ing the  defendants  of  all  right,  claim,  interest  and  equity  of 
redemption  in  the  mortgaged  premises  and  every  part 
thereof ;  it  was  held  on  appeal,  that  the  complaint  should 
have  been  dismissed  as  to  her  in  so  far  as  the  action  had  a 
tendency  to  affect  the  paramount  right  claimed  in  her 
behalf,  or  else  that  her  interest  should  have  been  protected 
by  an  express  qualification  in  the  judgment.* 

§  423.    Answers  by  prior  lien  holders  as  defendants. — 

The  holder  of  a  mortgage,  prior  in  record,  but  subsequent 
in  fact,  to  a  mortgage  under  foreclosure,  may  be  made  a 
defendant  to  the  action ;  and  it  will  be  sufficient  to  allege 
that  he  has,  or  claims  to  have,  some  lien  upon  or  interest  in 
the  mortgaged  premises,  or  some  part  thereof,  which  lien 
or  interest,  if  any,  is  subsequent  to  the  plaintiff's  mortgage  ; 
special  allegations  will  not  be  necessary.* 


(1886).     Estoppel  from  asserting  title  67  Barb.  (N.  Y.)  458  (1877) ;  Eliaa 

under  a  prior  mortgage  should  be  set  v.   Verdugo,   27    Cal.    418    (1865) ; 

up  under  by  amendment  to  the  com-  City  of  San  Francisco  v.  Lawton,  21 

plaint  in  foreclosure.    Connerton  v.  Cal.  589  (1863) ;  s.  c.  79  Am.  Dec. 

Millar,  41  Mich.  608  (1879).  187.     See  ante  §§  134-139. 

•  Schenck  v.  Kelley,  88  Ind.  444  "  Constant  v.  American  Bap.  &c. 

(1882).  Soc,  53  N.  Y.  Supr.  Ct.  (21  J.  &  S.) 

»  Lanier  v.  Smith,  37  Hun  (N.  Y.)  170  (1886). 
529  (1885).     See  Barker  v.  Burton, 


§424.]  ANSWERS   BY   PRIOR   LIEN   HOLDERS.  507 

A  prior  mortgagee  or  lien  holder,  who  is  made  a  party  to 
a   foreclosure,  is   not   obliged   to   set  up  his  rights  by  an 
answer  in  order  to  protect  them.'     But  where  in  an  action 
to    foreclose   a   mortgage  a   person  holding   a   subsequent 
mortgage  is  made  a  defendant,  and  such  defendant  is  also 
the  owner  of  mortgages  prior  to  that  of  the  plaintiff,  he  may 
answer  in  the  action  and  ask  to  have  such  prior  mortgages 
paid  out  of  the  proceeds  of  the  sale,  before   any   portion 
thereof  is  applied  to  the  satisfaction  of  the  plaintiff  s  claim^ 
Where  a  prior  mortgagee  is  made  a  party  defendant  and 
does  not  answer,  the  entrance  of  a  decree  of  foreclosure  will 
not  exclude  him  from  his  interest  in  the  equity  of  redemption. 
This  rule  applies  to  all  holders  of  prior  liens  and  interests 
as  well  as  to  prior  mortgagees;    thus,  it  applies  to  prior 
incumbrancers  by  judgment,'  or  mechanic's  hen,*  to  a  life 
estate  not  bound  by  the  mortgage,'  and  to  a  claim  to  an 
inchoate  right  of  dower  by  a  wife   who  did  not  join  her 
husband  in  the  execution  of  a  mortgage/ 

8424.  Pleading  in  defence  paramount  title  subse- 
quently acquired  by  mortgagor.-A  sale  under  a  decree 
of  foreclosure  can  have  no  broader  effect  than  to  vest  in  the 
purchaser  the  title  which  the  mortgagor  held  at  the  time  of 
the  execution  ef  the  mortgage.'  It  is  held  in  some  states 
that  a  purchaser  at  a  tax  sale,  after  the  execution  of  a 
mortgage,  may  be  made  a  defendant,  and  that  his  title  will  be 
barred  under  a  foreclosure.* 

1  Payn  v  Grant,  23  Hun  (N.  Y.)      N.  Y.  502  (1854) ;  8.  c.  61  Am.  Dec. 

'~06 

^^S;.^nii^^Hun(N.Y.)  ;;s;^^^^:t^:;;^ir: 

^S-^Kor sV??:  Y.  .28      l^l^^^^^    -^•- 

i^^.llifS^-"^^'""^'^'  %rv"powVn%    A..    351 

^-Emiir"    Industrial      Savings  (1884) ;  Randle  v  Boyd  73  Ala.  283 

BankT  Goldman.   75  N.    Y.    127  (1882).      On  a  bill  in   chancery  to 

Uant  V.   w  foreclose  a  mortgage,  tlie  complam- 

^  s  Rathbone  v.  Hooney,  58  N.  Y.  ant  also  sought  to  have  a  tax  deed 

.R^nsTT  ot    the    premises    covered   by    the 

e  Merchants' Bank  V.Thomson,  55  mortgage  set  aside,    as  an   alleged 

N  Y    7  (1873);  Lewis  v.  Smith,  9  cloud  upon  his  tule.     The  plamtifE 


508 


TITLE    SUBSEQUENTLY    ACQUIRED. 


[^  424. 


It  has  been  stated  as  a  general  rule,  that  where  a  mortgagor 
has  acquired  a  paramount  title  subsequently  to  the  execu- 
tion of  a  mortgage,  that  such  title  will  not  be  affected  by 
a  foreclosure  and  sale.*  There  is  an  exception  to  this 
rule,  however,  where  the  mortgagor  has,  subsequently  to  the 
execution  of  the  mortgage,  acquired  a  title  which  inures 
by  way  of  estoppel  to  the  benefit  of  the  mortgagee.  In 
such  a  case  a  sale  under  foreclosure  will  pass  the  subsequently 
acquired  title  to  the  same  extent  as  if  originally  held  by  the 
mortgagor." 

Thus,  where  a  mortgagor  in  his  mortgage  warrants  the 
title  to  lands  which  he  really  does  not  possess,  and  subse- 
quently acquires  title  thereto,  the  title  subsequently  acquired 
will  inure  to  the  benefit  of  the  mortgagee,  the  same  as  if  the 
entire  title  had  been  originally  possessed  by  the  mortgagor,* 
and  will  estop  such  mortgagor,*  and  all   persons  claiming 


made  the  alleged  owner  of  the  tax 
deed  a  party  defendant,  averring 
that  his  claim  of  title  was  acquired 
under  a  tax  sale  which  was  void, 
and  that  whatever  interest  he  had  in 
the  premises  Aas  subordinate  to 
the  rights  of  the  mortgagee.  For 
want  of  any  answer  by  such  defen- 
dant, the  bill  was  taken  as  con- 
fessed against  him,  and  a  tlnal 
decree  was  entered  annulling  and 
setting  aside  his  tax  deed  as  a  cloud 
upon  the  complainant's  title.  Upon 
the  question  as  to  the  right  of  the 
court  below,  to  entertain  the  bill  at 
all,  in  so  far  as  it  concerned  the 
alleged  claim  under  the  tax  deed, 
the  appellate  court  said  there  seemed 
to  be  a  misapprehension  as  to  the 
true  scope  and  effect  of  the  decision 
in  Gage  v.  Perry,  93  111.  176  (1879), 
where  it  was  held  that  a  court  of 
equity  had  no  right,  upon  a  bill  to 
foreclose  a  mortgage,  to  consider  and 
pass  upon  an  independent  adverse 
claim  of  title,  unconnected  with  that 
under  which  the  mortgagee  claimed. 


and  alleged  to  be  a  cloud  upon  the 
mortgagee's  title.  In  that  case  the 
owner  of  the  tax  title,  which  consti- 
tuted the  alleged  cloud,  appeared 
and  answered,  setting  up  his  title  as 
adverse  to,  and  independent  of  the 
supposed  title  of  the  mortgagor  or 
of  the  mortgagee.  That  decision 
should  be  limited  to  the  facts  so  dis- 
closed. In  this  case  no  such  defence 
was  set  up,  and  the  allegations  of  the 
bill  were  admitted  by  the  default  to 
be  true  ;  Chicago  Theological  Sem. 
v.  Gage,  103  111.  175  (1882). 

'  Weil  v.  Uzzell,  92  N.  C.  515 
(1886). 

*  City  of  San  Francisco  v.  Lawton, 
21  Cal.  589  (1863). 

'  Vallejo  Land  Assoc,  v.  Viera,  48 
Cal.  572,  579  (1874) ;  City  of  San 
Francisco  v.  Lawton,  21  Cal.  589 
(1863)  ;  s.  c.  79  Am.  Dec.  187  ;  Clark 
V.  Baker,  14  Cal.  612  (1860) ;  Pan- 
coast  V.  Travelers'  Ins.  Co.,  79  Ind. 
176,  177  (1881) ;  Marrier  v.  Lee,  3 
Utah,  262  (1880). 

*  Clark    V.    Baker,    14    Cal.    612 


§  42 1]  TITLE  subseque^t:ly  acquiked.  509 

under  him,  from  subsequently  asserting  any  title  against  the 
mortgagee  and  those  claiming  under  him.*  The  reason  for 
this  seems  to  be  that  the  mortgagor  will  not  be  permitted  to 
attack  a  title,  the  validity  of  which  he  has  covenanted 
to  maintain." 

The  supreme  court  of  the  United  States  held,  in  the  case 
of  VanRensselaer  v.  Kearney,'  that  "whatever  may  be  the 
form  or  nature  of  the  conveyance  used  to  pass  real  property, 
if  the  grantor  sets  forth  on  the  face  of  the  instrument  by 
way  of  recital  or  averment,  that  the  grantor  is  seized  or 
possessed  of  a  particular  estate  in  the  premises,  and  which 
estate  the  deed  purports  to  convey ;  or  what  is  the  same 
thing,  if  the  seizin  or  possession  of  the  particular  estate  is 
affirmed  in  the  deed,  either  in  express  terms  or  by  necessary 
implication,  the  grantor,  and  all  persons  in  privity  with  him, 
shall  be  estopped  from  ever  afterwards  denying  that  he  was 
so  seized  and  possessed  at  the  time  he  made  the  conveyance. 
The  estoppel  works  upon  the  estate  and  binds  the  after 
acquired  title  as  between  parties  and  privies. 

"The  reason  is,  that  the  estate  thus  affirmed  to  be  in  the 
party  at  the  time  of  the  conveyance  must  necessarily  have 


(1860).    See  also  Jackson  v.  Hubble,  (1882) ;    Sherman  v.  McCarthy,  57 

I  Cow.  (N.  Y.)  613  (1823) ;  Edwards  Cal.  507  (1881) ;  Vallejo  Land  Assoc. 
V.  Varlck,  5  Den.  (N.  Y.)  665  (1846);  v.  Viera,  48  Cal.  579  (1874) ;  Christy 
•Jackson  v.  Wright,  14  Johns.  (N.  v.  Dana,  34  Cal.  548  (1868)  ;  8.  c.  42 
Y.)  193  (1817) ;  Varick  v.  Edwards,  Cal.  179  (1871) ;  Green  v.  Clark,  31 

II  Paige  Ch.  (N.  Y.)  289  (1844);  Cal.  593(1867);  Kirkaldie  v.  Larra- 
Jackson  v.  Waldron,  13  Wend.  (N.  bee,  31  Cal.  457  (1866) ;  Lent  v. 
Y.)  178  (1834) ;  Pelletreau  v.  Jack-  Morrill,  25  Cal.  500  (1864) ;  City  of 
son,  11  Wend.  (N.  Y.)  110  (1833) ;  San  Francisco  v.  Lawton,  21  Cal. 
Jackson  v.  Bradford,  4  Wend.  619  589  (1863) ;  s.  c.  79  Am.  Dec.  187  ; 
(1830)  ;  Dart  v.  Dart,  7  Conn.  250  Baxter  v.  Bradbury,  20  Me.  260 
(1828) ;  Oomstock  v.  Smith,  30  Mass.  (1841) ;  s.  c.  37  Am.  Dec.  49  ;  Mc 
(13  Pick.)  116  (1832) ;  s.  c.  23  Am.  Williams  v.  Nisley,  2  Serg.  &  R. 
Dec.  670  ;  Some  v.  Skinner,  20  (Pa.)  507  (1816) ;  a.  c.  7  Am.  Dec. 
ilass.  (3  Pick.)  52  (1825)  ;  Kimball  654  :  Marrier  v.  Lee,  2  Utah,  462 
V.  Blaisdell,  5  K  H.  533  (1831) ;  s.  (1880). 

c.  22  Am.  Dec.   476  ;   Kinsman  v.  «  Hoppin  v.  Hoppin,  96  III.  272 

Loomis,   11  Ohio,  475  (1842);  Dos-  (1880). 

well  V.  Buchanan,  3  Leigh  (Va.)  365  »  25  U.  S.  (11  How.)  297, 325  (1850) ; 

(1831).  bk.  13  L.  ed.  703. 
>  See 'Camp  v.  Grider,  62  Cal.  20,  25 


510  ANSWERING  PROPER  CLAIMS  OF  PRIORITY.    [§  425. 

influenced  the  grantee  in  making  the  purchase.  And  hence, 
the  mortgagor  and  those  in  privity  with  him,  in  good  faith 
and  fair  dealing,  should  be  forever  thereafter  precluded  from 
gainsaying  it." ' 

§  425.  What  claims  as  to  priority  may  be  set  up  in 
answer. — The  court  may  entertain  questions  which  are 
necessary  to  be  determined  in  order  that  complete  justice 
may  be  done  between  the  parties  whose  rights  in  the  equity 
of  redemption  are  to  be  barred  by  the  decree  of  foreclosure. 
A  party  asserting  a  right  under  the  mortgagor  prior  to  the 
mortgage,  is  sometimes  a  proper  party  to  an  action  to  fore- 
close the  mortgage,  and  the  question  of  priority  is  then  a 
proper  one  to  be  determined."  It  is  held  that,  in  an  action 
to  foreclose  a  mortgage,  defendants  claiming  under  an 
attachment  lien  accruing  after  the  mortgage  was  given,  are 
entitled  to  prove  the  existence  of  their  lien  and  to  show  that, 
in  consequence  of  certain  acts  of  the  plaintiff  set  forth  in 
their  answer,  their  lien  under  the  attachment  is  superior  to 
the  lien  of  the  mortgage.*  And  it  is  said  to  be  proper 
to  determine  in  a  foreclosure  suit  a  controversy  between 
the  plaintiff  and  the  grantee  of  the  mortgagor,  as  to  the  right 
of  the  latter  to  remove  a  building  erected  by  him  on  the 
land  ;  and  the  court  may,  by  a  provision  in  the  judgment,  in 
case  the  right  is  established,  protect  it  by  authorizing  the 
removal  of  the  building  before  sale  or  by  directing  that  the 
sale  shall  be  made  subject  to  such  right.* 

The  holder  of  a  mortgage,  dated  and  recorded  prior  to  a 
deed  of  the  same  property,  is  entitled  to  treat  all  subsequent 
rights  under  the  deed  as  subordinate ;  and  on  a  foreclosure 
of  his  mortgage  such  rights  need  not  be  brought  into  issue 
by  him.*  But  where  a  person  executes  a  mortgage  upon 
premises  which  he  had  previously  contracted  to  sell,  and  the 


'  See  also  Crews  v.  Burcham,  66  Mineral  Point  R.  R.  Co.,  24  Wis.  93 

U.  S.  (1  Black),  357  (1861) ;  bk.  17  (1869).     See  ante  %%  188,  190. 

L.  ed.  93.  »  Scrivener  v.Dietz,  68  Cal.  1  (1885). 

*  Brown  v.  Volkening,  64  N.  T.  *  Brown    v.    Keeney    Settlement 

76  (1876) ;  Bank  of  Orleans  v.  Flagg,  Cheese  Assoc,  59  N.  Y.  242  (1874). 

3   Barb.   Ch.    (N.  Y.)  316  (1848);  «  Shelden  v.  Warner,  45  Mich.  638 

Board  of  Supervisors  of  Iowa  Co.  v.  (1881).                                                * 


§426.]      DEFEI^CE    OF   OWNERSHIP    OF   FIXTURES.  511 

mortgagees  file  a  complaint  to  foreclose  such  mortgage, 
making  the  purchaser  a  party  thereto,  if  they  claim  to  be 
entitled  to  a  preference  over  such  purchaser  as  bona  fide 
mortgagees  without  notice,  the  complaint  will  not  be  suffi- 
cient, if  it  merely  alleges  generally  that  such  purchaser  has  or 
claims  to  have  some  interest  in  the  premises  which  is  subse- 
quent to  their  mortgage  ;  it  should  state  that  such  purchaser 
claims  an  interest  under  a  contract  to  purchase,  prior  to  the 
mortgage,  and  that  if  he  had  any  such  interest  the  com- 
plainants had  no  notice  or  knowledge  thereof  at  the  time 
they  took  their  mortgage.  The  complaint  should  also  show 
the  other  facts  which  are  necessary  to  entitle  the  complain- 
ants to  protection  as  bona  fide  mortgagees.* 

§  426.  Pleading  ownership  of  fixtures  in  answer.— 
Personal  property  attached  to  the  land  will  be  regarded  as 
a  fixture,  where  it  is  necessary  to  the  full  enjoyment  of  the 
freehold,  and  will  pass  under  a  foreclosure  to  the  purchaser 
of  the  premises.'  Thus,  fencing  material,  accidentally  or 
temporarily  detached  from  the  realty  after  having  been  used  as 
a  part  of  a  fence,'  or  placed  along  the  line  of  a  contemplated 
fence,*  machinery  in  a  building  fitted  up  as  a  manufactory 
by  the  owner  and  essential  to  the  purposes  thereof;*  manure 


»  Bank    of    Orleans   v.   Flagg,   3  E.   Gr.)  395  (1866) ;  Hill  v.  We&t- 

Barb.  Ch.  (N.  Y.)  316  (1848).  worth,  28  Vt.  428  (1856). 

«  Voorhees  v.  McGinnis,  48  N.  Y.  «  Goodrich  v.  Jones,  2  Hill  (N.  Y.) 

278,  289  (1872).      See  Sisson  v.  Hib-  142  (1841). 

bard,  75  N.  Y.  542,  544  (1879) ;  Tifft  *  Conklin  v.   Parsons,   1    Chand. 

V.  Horton,  53  N.  Y.  380  (1873) ;  Shel-  (Wis.)  240  (1849). 

don  V.Edwards,  35 N.  Y.  283(1866);  *  Ottumwa    Woolen   Mill  Co.  v. 

Ford  V.  Cobb,  20  N.  Y.  344  (1859) ;  Hawley,  44  Iowa,  57  (1876) ;  Farrar 

Main  v.  Schwarzwaelder,  4    E.  D.  v.  Stackpole,  6  Me.  (6  Greenl.)  154 

Smith  (N.  Y.)  275  (1855) ;  Eaves  v.  (1829) ;  Green  v.  Phillips,  26  Gratt. 

Estes,  10  Kan.  314  (1873) ;  s.  c.  15  (Va.)  752  (1875) ;  s,  c.  21  Am.  Rep. 

Am.    Rep.   345 ;  Pierce  v.  George,  323 ;  Longbottom  v.  Berry,  L.  R.  5 

108  Mass.  78  (1871) ;   s.  c.  15  Am.  Q.  B.   123  (1869) ;  Reg.  v.   Inhabi- 

Rep.   345 ;    Richardson  v.  Borden,  tants  of  the  Parish  of  Lee,  L.  R.  1 

42  Miss.  71  (1868) ;  s.  c.  2  Am.  Rep.  Q.  B.  241  (1866) ;  Hubbard  v.  Bag- 

595;   Wadleigh  v.  Janvrin,  41   N.  shaw,    4    Sim.    326    (1831).      See 

H.  503  (1860);  s.  c.  77  Am.  Dec.  Stockwell  v.    Campbell,   39    Conn. 

780 ;  Potts  V.  New  Jersey  Arms  &  362  (1872) ;  s.  c.  12  Am.  Rep.  393 ; 

Ordinance  Co.,  17  N.  J.  Eq.  (2  C.  McConneU  v.  Blood,  123  Mass.  47 


512  DEFENCE    OF   OWNERSHIP    OF   FIXTURES.      [§426. 


produced  upon  a  farm ;'  hop  poles,  although  pulled  up 
and  piled  upon  the  land  at  the  time  of  the  conveyance ;' 
a  bell  hung  upon  a  frame  and  fastened  to  it  by  a  hasp,  the 
frame  being  nailed  to  the  cupola  of  a  barn,'  or  otherwise 
permanently  attached ;  platform   scales  bolted  and  fastened 


11877);  Pierce  v.  George,  108  Mass.  78 
(1871) ;  s.  c.  11  Am.  Rep.  310,  314 ; 
McMillan  v.  Fish,  29  N.  J.  Eq. 
610  (1878);  s.  c.  6  Rep.  661  ; 
Meigs'  Appeal,  62  Pa.  St.  28  (1869)  ; 
Hill  V.  National  Bank.  97  U.  S.  (7 
Otto),  450  (1878);  bk.  24  L.  ed.  1051; 
Holland  v.  Hodgson.  L.  R.  7  C.  P. 
828  (1872) ;  s.  c.  41  L.  J.  C.  P.  (N. 
S.)  146 ;  20  W.  R.  990  ;  Boyd  v. 
Shorrock,  L.  R.  5  Eq.  72  (1867) ;  a 
c.  16  W.  R.  102;  Hutchinson  v. 
Kay,  23  Beav.  413  (1857);  Wynne  v. 
Ingleby,  1 D.  <&  R.  247  (1822);  Jenkins 
V.  Gething,  2  Johns.  &  Hem.  520 
(1862) ;  Walmsley  v.  Milne,  7  C.  B. 
N.  S.  115  (1859) ;  8.  c.  6  Jur.  K  S. 
125 ;  29  L.  J.  0.  P.  97 ;  1  L.  T.  N. 
S.  92 ;  Mather  v,  Fraser,  2  K.  «&  J. 
536  (1856) ;  8.  c.  2  Jur.  N.  S.  900  ; 
35  L.  J.  Ch.  361 ;  Ux  parte  Reynal, 
2  M.  D.  &  DeG.  443  (1841).  See  also 
McRea  v.  Central  National  Bank,  66 
N.  Y.  489  (1876) ;  Eaves  v.  Estes,  10 
Kan.  314  (1872) ;  s.  c.  15  Am.  Rep. 
345. 

If  a  part  of  a  machine  is  an  im- 
movable fixture,  and  another  part 
thereof  is  movable  without  any 
damage  to  the  freehold,  the  latter 
must  also  be  treated  as  realty, 
Mather  v.  Fraser,  2  K.  &  J.  536 
(1856) ;  8.  c.  2  Jur.  N.  S.  900 ;  25  L. 
J  Ch.  361. 

'  Chase  v.  Wingate,  68  Me.  204 
(1878) ;  8.  c.  28  Am.  Rep.  36  ;  Kitt- 
redge  v.  Woods,  3  N.  H.  503  (1826) ; 
B.  c.  14  Am.  Dec.  393.  See  Goodrich 
V.  Jones,  2  Hill  (N.  Y.)  142  (1841) ; 
Middlebrook  v.  Corwin,  15  Wend. 
(N.  Y.)  169  (1836);  Parsons  v.  Camp, 


11  Conn.  525  (1836) ;  Gallagher  v. 
Shipley,  24  Md.  418,  427,  428  (1865); 
Fletcher  v.  Herring,  112  Mass.  382, 
384  (1873);  Strong  v.  Doyle,  110 
Mass.  92  (1872);  Perry  v.  Carr, 
49  N.  H.  65  (1869);  Plumer  -v. 
Plumer,  30  N.  H.  558  (1855).  Contra, 
Ruck  man  v.  Cutwater,  28  N.  J.  L. 
(4  Dutch.)  581  (1860);  Sanders  v. 
Ellington,  77  N.  C.  255  (1877); 
Smithwick  v.  Ellison,  2  Ired.  (N. 
C.)  L.  326  (1842) ;  Lewis  v.  Jones, 
17  Pa.  St.  262,  264  (1851) ;  Wing  v. 
Gray,  36  Vt.  261,  267  (1863). 

But  where  the  manure  is  not  made 
in  the  course  of  husbandry,  it  is  per- 
sonalty and  does  not  pass  with  the 
estate.  Proctor  v.  Gilson,  44  N.  H. 
118  (1862).  See  Lassell  v.  Reed,  6 
Me.  (6  Greenl.)  222  (1829);  Daniels  v. 
Pond.  38  Mass.  (21  Pick.)  367  (1838). 

«  See  Bishop  v.  Bishop,  11  N.  Y. 
123  (1854) ;  Walker  v.  Sherman,  20 
Wend.  (N.  Y.)  636,  655  (1839). 

It  is  said  in  Noyes  v.  Terry,  1 
Lans.  (N.  Y.)  222  (1869),  that  Bishop 
V.  Bishop,  supra,  carried  the  rule  to 
the  extremest  point  and  is  only  to  be 
sustained  on  the  ground  that,  as  the 
hop  root  was  perennial  and  would 
pass  with  a  conveyance,  so  the  pole, 
which  is  used  exclusively  in  connec- 
tion with  the  root  and  is  indispen- 
sable to  its  cultivation,  would  pass 
also.  The  growing  crop  of  hops 
upon  the  vines  is  regarded  as  per- 
sonalty. Frank  v.  Harrington,  36 
Barb.  (N.  Y.)  415  (1862). 

*  Weston  V.  Weston,  102  Mass. 
514  (1869). 


§427.]      DEFENCE    OF    OWNERSHIP    OF   FIXTURES.  513 


to  sills  laid  upon  a  brick  wall  set  in  the  ground,  and  intended 
for  permanent  use  on  a  farm  for  weighing  stock  and 
grain  ;*  a  sugar  mill  on  a  plantation  ;'  a  hot  air  furnace  in  a 
house;*  a  cotton-gin  and  stand  ;^  salt  pans  in  use  in  salt 
works ;'  a  threshing  machine  fastened  in  a  barn  by  means 
of  bolts  and  screws*  and  tapestry,  pictures  in  panels, 
frames  filled  with  satin  and  attached  to  the  walls  of  a 
house,  statues,  figures,  vases  and  stone  garden  seats,^  as 
between  a  mortgagor  and  a  mortgagee,  have  been  held  to  be 
a  part  of  the  realty  and  to  pass  with  the  estate.* 

§  427.  Gas  fixtures,  burners,  brackets  and  chandeliers. 
— Regarding  gas  fixtures,  such  as  burners,  brackets,  chande- 
liers and  the  like,  there  is  a  conflict  in  the  decisions  ;  but  by 
the  weight  of  American  authority  they  are  not  regarded  as 
fixtures,  but  as  mere  articles  of  furniture,  and  do  not  pass 
with  a  conveyance  of  the  premises,*  though  as  to  gas 
fittings  or  pipes,  to  which  the  fixtures  are  attached,  the  rule 
is  different." 

In  Vaughen  v.  Haldeman"  the  supreme  court  of  Pennsyl- 
vania, in  holding  that  gas  fixtures  are  personal  property  and 


'Arnold  v.  Crowder,  81  111.  56 
(1875) ;  8.  c.  25  Am.  Rep.  260.  See 
Bliss  V.  Whitney,  91  Mass.  (9  Allen), 
114  (1864). 

*  Hutchins  v.  Masterson,  46  Tex. 
551  (1877) ;  s.  c.  26  Am.  Rep.  286. 

*  Jarechi  v.  Philharmonic  Society, 
79  Pa.  St.  403  (1875) ;  s.  c.  21  Am. 
Rep.  78,  80  and  note. 

*  Richardson  v.  Borden,  42  Miss. 
71  (1868) ;  8.  c.  2  Am.  Rep.  599. 

»  Lawton  v.  Salmon,  1  H.  Bl.  259 
(1782). 

«  Wiltshear  v.  Cottrell,  1  E.  &  Bl. 
674  (1853). 

'  D'Eyncourt  v.  Gregory,  L.  R.  3 
Eq.  Cas.  383  (1866) ;  8.  c.  36  L.  J. 
Ch.  107 ;  15  W.  R.  186. 

»  Witmer's  Appeal,  45  Pa.  St.  462 
(1863);  Rogers  v.  Gilinger,  30  Pa. 
St.  189  (1858) ;  Heaton  v.  Findlay, 
12  Pa.   St.   307    (1849);   Covey    v. 


Pittsburgh,  F.  W.  &  C.  R.  Co.,  3 
Phila.  (Pa.)  173  (1858);  Lemar  v. 
Miles,  4  Watts.  (Pa.)  332  (1835); 
Morgan  v.  Arthurs,  3  Watts.  (Pa.) 
140  (1834) ;  Voorhis  v.  Freeman,  2 
Watts.  &  S.  (Pa.)  119  (1841). 

»  See  Rogers  v.  Crow,  40  Mo.  91 
(1867) ;  Jarechi  v.  Philharmonic 
Society,  79  Pa.  St.  404  (1875); 
Vaughen  v.  Haldeman,  33  Pa.  St. 
522  (1859);  Montague  v.  Dent,  10 
Rich.  (S.  C.)  L.  135  (1856) ;  Sewell  v. 
Angerstein,  18  L.  T.  N.  S.  300  (1868). 

'"  Lawrence  v.  Kemp,  1  Duer  (N. 
Y.)  363  (1852) ;  Wall  v.  Hinds,  70 
Mass.  (4  Gray),  256  (1855) ;  Rogers 
V.  Crow,  40  Mo.  91  (1867);  Montague 
V.  Dent,  10  Rich.  (S.  C.)  135  (1856); 
Ewell  on  Fixtures,  299  ;  Tyler  on 
Fixtures,  396,  et  seq;  Brown  on  Fix- 
tures, appx.  A. 

"  33  Pa.  St.  522  (1859). 
(33) 


514  DEFEN"OE   OF   OWlSrERSHTP    OF   FIXTURES.      [§  427. 

do  not  pass  with  the  land,  said  that  there  is  "  really  nothing  to 
distinguish  this  new  apparatus  from  the  old  lamps,  candle 
sticks  and  chandeliers,  which  have  always  been  considered 
as  personal  chattels.  Gas  stoves  are  largely  used  for  bath 
and  other  rooms,  and  are  necessarily  connected  with  the  gas 
pipes  in  the  same  way,  but  no  one  would  think  of  saying  that 
they  are  fixtures  which  it  would  be  waste  to  remove.  It  is, 
therefore,  more  simple  to  consider  all  these  gas  fixtures, 
whether  stoves,  chandeliers,  hall  and  entry  lamps,  drop  lights 
or  table  lamps,  as  governed  by  the  same  rules  as  the  article 
for  which  they  were  substituted ; "  and  this  decision  was 
approved  by  the  same  court  in  the  later  case  of  Jarechi  v. 
Philharmonic  Society.'  The  supreme  court  of  Missouri,' 
following  the  Pennsylvania  cases,  has  held  that  the  fixtures 
of  a  church  are  movable  chattels.* 

The  doctrine  laid  down  in  these  cases  is  evidently  too 
broad,  because  gas  fixtures  may  or  may  not  become  attached 
to  the  realty,  and  pass  by  a  conveyance  of  the  land,  accord- 
ing to  the  particular  circumstances  of  each  case  and  the 
intention  of  the  parties.*  In  a  late  case  in  New  Jersey,* 
which  was  a  suit  between  the  mortgagee  of  chattels  on 
certain  premises  and  a  subsequent  mortgagee  of  the  realty 
on  which  the  chattels  were  situated,  it  was  held  that  the  gas 
burners  were  fixtures.  The  court  held  that  they  were  in  no 
sense  furniture,  but  mere  accessories  to  the  building.* 


»  79  Pa.  St.  404  (1875).  that,  "  the  question  whether  chattels 

*  Rogers  v.  Crow,  40  Mo.  91  (1867).  are  to  be  regarded  as  fixtures  de- 

*  This  decision  is  apparently  based  pends  less  upon  their  manner  of 
upon  the  additional  cases  of  Law-  acquisition  to  the  freehold,  than  upon 
rence  v.  Kemp,  1  Duer  (N.  Y.)  363  their  own  nature  and  their  adapta- 
(1853),  and  Wall  v.  Hinds,  70  Mass.  tion  to  the  purposes  for  which  they 
(4  Gray),  256  (1855) ;  but  the  court  are  used."  See,  sustaining  this  doc- 
seems  to  have  overlooked  the  fact  trine,  McRea  v.  Central  National 
that  these  were  cases  between  land-  Bank,  66  N.  Y.  494  (1876) ;  Hoyle 
lord  and  tenant.  v.  Pittsburgh  &  M.  R.  R.  Co. ,  54  N. 

*  SeweU  V.  Angerstein,  18  L.  T.  Y.  314,  334  (1873) ;  Voorhees  v. 
N.  S.  300  (1868).  McGinnis,  48  N.  Y.  278,  324  (1872) ; 

» Keeler  v.  Keeler,  31  N.  J.  Eq.  Potter  v.  Cromwell,  40  N.  Y.  287 

(4  Stew.)  191  (1879).  (1869) ;  Quinby  v.  Manhattan  C.  & 

In  Johnson's  Ex'rs  v.  Wiseman,  4  P.  Co.,  24  N.  J.  Eq.  (9  0.  E.  Gr.) 

Met.  (Ky.)  361  (1863),  the  court  held  260  (1873). 


§428.]      OWNERSHIP    OF    FIXTURES    AS    DEFEIS^CE.  515 

While  it  is  true  that  personal  property  attached  to  the  land 
will  be  regarded  as  fixtures,  where  such  is  the  manifest  inten- 
tion of  the  parties/  yet  under  certain  circumstances  such 
chattels  remain  personal  property  and  may  be  removed  with- 
out the  consent  of  the  owner  of  the  land  or  those  claiming 
under  him  ;  thus,  where  rails  are  built  into  a  fence  by  a 
tenant  under  an  agreement  that  he  may  remove  them  from 
the  land,  they  are,  it  seems,  as  between  such  tenant  and  the 
owner  of  the  soil,  personal  property."  It  is  proper  to  deter- 
mine in  a  foreclosure  suit  a  controversy  between  a  mortgagee 
and  the  grantee  of  the  mortgagor,  as  to  the  right  of  the  latter 
to  remove  an  erection  made  by  him  on  the  land,  and  the 
court  may,  by  a  provision  in  the  judgment,  in  case  the  right 
is  established,  protect  it  by  authorizing  the  removal  of  the 
building  before  the  sale,  or  by  providing  that  the  sale  shall 
be  subject  to  the  right.* 

§  428.     Fixtures  where  land  leased  for  a  term  of  years. 

— As  between  a  mortgagor  and  a  mortgagee,  fixtures  placed 
upon  land  leased  for  a  term  of  years,  become  a  part  of  the  realty 
and  will  pass  under  a  mortgage  of  the  land.*  The  rule  in 
respect  to  what  fixtures  shall  be  deemed  a  part  of  the  realty, 
is  more  liberally  construed  in  favor  of  a  mortgagor  than  in 
favor  of  a  tenant  holding  under  the  mortgagor.  All  fixtures, 
attached  to  the  land  and  which  are  habitually  used  and 
enjoyed  therewith,  whether  for  the  purposes  of  trade  and 
manufacture  or  not,  pass  with  the  freehold  ;  and  as  betweea 
the  mortgagee  and  a  tenant  of  the  mortgagor,  they  are  a  part 
of  the  realty.*  But  it  has  been  held  that  machinery  attached 
to  a  building  for  manufacturing  purposes  and  connected  with 
the  motive  power  by  leather  belts,  and  not  otherwise  annexed 


•  See  Hutchinson  v.  Kay,  23  Beav.  *  Day  v.  Perkins,  2   Sandf .    Ch. 
414  (1857),  where  the  gas  light  was  (N.  Y.)  359  (1845). 

said  to  be  a  necessary  part  of  a  mill.  *  Breese  v.  Bange,  2  E.  D.  Smith 

^  See  authorities  cited   above   in  (N.  Y.)  474  (1854).      See  Sands  v. 

this  section.  PfeiHer,  10  Cul.  258  (1858) ;  Sparks 

«  Mott  V.  Palmer,   1  N.   Y,   564  v.  State  Bank,  7  Blackf.  (Ind.)  469 

(1848).     See  Ford  v.  Cobb,  20  N.  Y.  (1845) ;   Fullam  v.  Stearns,  30  Vt. 

344  (1859).  443  (1857). 

*  Brown    v.    Keeney    Settlement 
Cheese  Assoc,  59  N.  Y.  242  (1874). 


516  OWIfEESHIP   OF   FIXTUEES   AS   DEFENCE.      [§  428. 

to  the  building  than  by  screws  holding  it  to  the  floor,  which 
keep  it  steady  while  working,  and  which  can  be  removed 
•without  injury  to  the  machinery  or  building,  is  a  chattel  and 
not  a  part  of  the  realty,  and  does  not  pass  with  the  land 
under  a  mortgage.' 

While  it  is  true  that  all  the  cases  upon  this  subject  can  not 
be  reconciled,  and  that  no  rule  can  be  stated  in  exact  terms, 
which  will  furnish  a  clear  guide  for  every  case,  yet  the  true 
doctrine,  as  established  in  New  York  and  in  other  states, 
seems  to  be  that,  where  the  chattel,  as  attached  to  the 
realty,  is  useful  and  necessary  to  its  enjoyment,  and  adds 
value  thereto,  and  when  detached  loses  its  character  and 
usefulness,  then  the  chattel  becomes  a  fixture  and  passes 
with  the  freehold.  Applying  this  principle  to  the  case  of 
a  factory,  the  wheel  or  engine  which  furnishes  the  motive 
power,  and  all  that  part  of  the  gearing  and  machinery  which 
has  special  relation  to  the  building  with  which  it  is  con- 
nected, would  belong  to  the  freehold,  while  an  independent 
machine,  like  a  loom,  which,  if  removed,  still  remains  a  loom, 
and  can  be  used  as  such  wherever  it  is  wanted  and  power 
can  be  applied  to  it,  will  retain  its  character  as  a  chattel. 
With  the  rule,  as  thus  stated,  a  majority  of  the  cases  coin- 
cide.' 

It  is  stated  as  a  rule  of  law  in  respect  to  mills  and  manu- 
factories, that  in  the  absence  of  custom  or  agreement, 
anything  that  can  be  removed  without  injury  to  itself  or  to 
the  freehold,  is  a  chattel  and  does  not  pass  with  the  convey- 
ance of  the  realty.*  Thus,  machines  and  such  articles  as 
may  be  used  in  any  other  building,  as  well  as  in  that  in 


•  Murdock  v.  Gifford,  18  N.  Y.  28  Y.  283  (1872) ;  Walker  v.  Sherman, 
(1858).  20  Wend.   (N.  Y.)  636,  657  (1839) ; 

*  Vanderpoel  v. VanAllen,  10 Barb.  Wade  v.  Johnston,  25  Ga.  331  (1858); 
(N.  Y.)  157  (1850) ;  Cresson  v.  Stout,  Richardson  v.  Copeland,  72  Mass, 
17  Johns.  (N.  Y.)  116,  117  (1819) ;  (6  Gray),  536  (1856) ;  Hill  v.  Sewald, 
Swift  V.  Thompson,  9  Conn.  63  53  Pa.  St.  274  (1866) ;  Sweetzer  v. 
(1831) ;  Gale  v.  Ward,  14  Mass.  Jones,  35  Vt.  317  (1862) ;  Fullam  v. 
352  (1817) ;  Teaff  v.  Hewitt,  1  Ohio  Stearns,  30  Vt.  443  (1857) ;  Hill  v. 
St.  511  (1853) ;  Powell  V.  Monson,  3  Wentworth,  28  Vt.  436  (1856); 
Mason  C.  C.  459  (1824).  Walmsley  v.  Milne,  7  C.  B.  N.  S. 

» See  Voorhees  v.  McGinnis,  48  N.  115  (1859). 


§429.]  EQUITIES    BETWEEN    M0ETGAGEE3.  517 

1 

which  they  are  placed,  are  ordinarily  deemed  to  be  chattels, 

if  they  can  be  removed  without  injury  to  the  freehold.' 

§  429.    Settlement  of  equities  between  mortgagees.— 

In  an  action  of  foreclosure  the  court  may  adjust  all  rights 
and  equities  between  incumbrancers.  The  rights  and  equi- 
ties of  the  parties  are  sometimes  as  much  affected  by  the 
order  in  which  separately  encumbered  pieces  of  land  are 
to  be  sold,  as  by  the  determination  which  is  the  primary 
and  which  the  auxilliary  security.  Thus,  it  has  been  held  that 
where  one  holds  a  mortgage  on  real  estate  to  secure  the 
payment  of  money  owing  to  him,  and  before  the  payment  of 
the  money  secured  by  the  mortgage,  such  mortgagee 
becomes  indebted  to  the  mortgagor  on  a  book  account,  a 
junior  incumbrancer,  whether  general  or  specific,  of  the 
mortgaged  premises,  will  have  a  right  to  have  such  indebted- 
ness applied  in  extinguishing  the  mortgage  debt."  This 
right  of  a  junior  incumbrancer  is  absolute,  and  can  not  be 
defeated  by  the  parties  to  the  mortgage  in  the  absence  of 
equities  in  favor  of  the  mortgagee.* 

And  where  a  mortgagor  makes  general  advances  to  his 
mortgagee,  although  such  advances  may  not  be  applied  upon 
the  mortgage  by  the  parties,  yet  if  they  are  such  that  the 
mortgagee  would  have  the  right  to  apply  them  as  a  satisfaction 
of  the  mortgage  debt,  a  judgment  recovered  against  the 
mortgagor  by  a  third  person  will  determine  the  application, 
so  far  as  to  give  the  judgment  creditor  a  right  to  demand 
such  set-off,  and  to  compel  a  reduction  of  the  amount  of  the 
prior  mortgage,  which  right  the  parties  to  the  mortgage  can 
not  defeat.* 

Where  a  mortgagee  has  a  lien  upon  several  distinct  parcels 
of  land,  and  some  of  the  lands  still  belong  to  the  person 
who  in  equity  ought  to  pay  and  discharge  the  debt,  and 
other  parcels  have  been  sold  by  him,  the  lands  still  belonging 


•  Vanderpoelv.VanAllen,  lOBarb.  »  Rosevelt   v.    Bank  of  Niagara, 

(N.  Y.)  157  (1850) ;  Swift  v.  Thomp-  Hopk.  Ch.  (N.  Y.)  579  (1825) ;  affd 

son,   9  Conn.   63  (1831) ;    Gale   v.  9  Cow.  (N.  Y.)  409. 

Ward,  14  Mass.  352  (1817).  *  Bank  of  Niagara  v.  Rosevelt,  9 

«  Prouty  V.  Price,  50  Barb.  (N. Y.)  Cow.  (N.  Y.)  409  (1827),  aff'g  Hopk. 

344  (1867).  Ch.  (N.  Y.)  579  (1825). 


518  SALE  IN  INVERSE  ORDER  OF  ALIEjS^ATIOK     [§  430. 

to  such  person  are  in  equity  first  chargeable  with  the  payment 
of  the  debt.  And  if  the  person  who  ought  to  pay  the  niortgage 
has  conveyed  the  several  parcels  of  the  land  upon  which  it 
is  a  lien  at  different  times  to  bona  fide  purchasers,  the  lands, 
as  between  the  purchasers,  will  be  chargeable  with  the  pay- 
ment of  the  debt  in  the  inverse  order  of  their  alienation,'  on 
the  principle  that  as  between  equal  equities,  he  who  is  prior 
in  time  is  strongest  in  right.*  The  first  purchaser  from  the 
mortgagor  will  have  a  prior  equity,  although  his  consideration 
may  not  actually  be  paid  until  after  the  other  portion  of  the 
lands  is  sold  and  paid  for." 

§  430.  Demand  in  answer  for  sale  in  inverse  order  of 
alienation. — The  rule  that  the  lands  are  to  be  sold  to  satisfy 
the  mortgage  debt  in  the  inverse  order  of  their  alienation, 
is  not  confined  to  the  original  alienation  of  the  mort- 
gagor who  is  personally  liable  for  the  debt.  It  is  equally 
applicable  to  the  several  conveyances  of  the  separate  parcels 
of  the  mortgaged  premises  made  at  different  times  by  his 
grantees  who  convey  with  a  warranty.*  And  where  there  are 
general  liens  upon  the  whole  land,  and  subsequent  mortgages 
lupon  parts  of  such  land,  the  parts  of  the  land  not  covered  by 
the  subsequent  mortgages  are  primarily  chargeable  with  the 
prior  liens  covering  the  whole  land,  and  the  property  so  mort- 
gaged is  chargeable  in  the  inverse  order  of  the  mortgages.* 

And  where  mortgaged  premises  are  sold  subsequent  to  the 
date  of  the  mortgage  to  different  purchasers  in  parcels,  such 
parcels,   upon  the  foreclosure  of   the  mortgage,  are  to  be 


>  Crafts  V.  Aspinwall,  2  N.  Y.  289  (N.  Y.)  183  (1840).  qui  prior  est 
(18-49);  Skeel  v.  Spraker,  8  Paige  Ch.  tempore,  potior  est  jure.  See  James 
(N.  Y.)  183  (1840).  See  Clowes  v.  v.  Morey,  3  Cow.  (N.  Y.)  246,  316 
Dickenson,  5  Johns.  Ch.  (N.Y.)  235  (1823);  s.  c.  14  Am.  Dec.  475; 
(1821) ;  Gill  V.  Lyon,  1  Johns.  Ch.  Berry  v.  Mutual  Ins.  Co.,  2  Johns. 
(N.    Y.)  447  (1815);    Rathbone    v.  Ch.  (N.  Y.)  603  (1817). 

Clark,  9  Paige  Ch.  (N.  Y.)  648  (1843);  ^  Gouverneur  v.  Lynch,  2  Paige 

Schryver  v.  Teller,  9  Paige  Ch.  (N.  Ch.  (N.  Y.)  300  (1830). 

Y.)  173  (1841) ;  Guion  v.  Knapp,   6  *  Guion  v.  Knapp,  6  Paige  Ch.  (N. 

Paige  Ch.  (N.  Y.)  35  (1836):  Gouver-  Y.)  85  (1836). 

neur  v.  Lynch,  2  Paige  Ch.  (N.  Y.)  ^  Schryver  v.  Teller,  9  Paige  Ch. 

300  (1830).  (N.  Y.)  173  (1841). 

>  Skeel  V.  Spraker,   8  Paige  Ch. 


§  431.]      SALE  LN  LNYEPvSE  OEDER  OF  ALIEN ATIOU".  519 

sold  in  the  inverse  t  rder  of  their  alienation,  so  as  to  protect 
the  equitable  rights  of  the  defendants  respectively,  as 
between  themselves,  in  reference  to  the  payment  of  the 
mortgage  which  is  a  lien  upcn  the  equity  of  redemption  in 
all  the  parcels.'  This  principle  is  also  applicable  to  subse- 
quent incumbrancers  upon  different  parcels  of  the  mort- 
gaged premises  either  by  mortgage,  judgment  or  otherwise." 

The  right  of  the  subsequent  grantee  of  a  part  of  mortgaged 
premises,  to  have  the  different  parcels  charged  with  the  debt 
in  the  inverse  order  of  their  alienation,  is  an  equitable  and 
not  a  strictly  legal  right,  and  is  governed  by  the  same 
principles  upon  which  a  court  of  equity  protects  the  rights 
of  sureties  or  those  standing  in  the  situation  of  sureties.^ 

The  duties  of  the  party  who  holds  the  incumbrance  will 
not  be  affected,  unless  he  is  informed  of  the  existence  of  facts 
upon  which  the  right  depends,  or  he  has  a  sufficient  notice 
of  the  probable  existence  of  such  a  right,  to  make  it  his  duty 
to  inquire  for  the  purpose  of  ascertaining  whether  any 
equities  in  fact  exist.*  Thus,  the  recording  of  a  subsequent 
deed  given  by  a  mortgagor,  is  not  constructive  notice  to 
the  mortgagee  of  the  equitable  right  of  the  grantee  to  have  the 
residue  of  the  mortgaged  premises,  not  embraced  in  his  deed, 
first  charged  with  the  payment  of  the  amount  due  upon  the 
mortgage.' 

§  431.  Allegation  of  outstanding  title  or  incumbrance. 
— In  an  action  to  foreclose  a  mortgage,  the  defendant  will 
not  be  permitted  to  allege,  by  way  of  defence,  that  there  is 
an  outstanding  title  or  incumbrance  prior  to  the  mortgage,* 
for  it  is  a  well  settled  principle  that,  where  no    fraud   is 


'  Stuyvesant  v.  Hall,  2  Barb.  Ch.  "*  Stuyvesant  v.  Hall,  2  Barb.  Ch. 

(N.  Y.)  151  (1847) ;  New  Tork  Ins.  (N.  Y.)  151,  159  (1847). 

&  Trust  Co.  V.  Milnor,  1  Barb.  Ch.  *  Stuyvesant  v.  Hall,  2  Barb.  Ch. 

(N.  Y.)  353  (1846) ;  Guion  v,  Knapp,  (N.   Y.)  151,   159  (1847);   Guion  v. 

6  Paige  Ch.  (N-  Y.)  35  (1836).  Knapp,  6  Paige  Ch,  (K  Y.)  35,  42 

*  Stuyvesant  v.  Hall,  2  Barb.  Ch.  (1836). 

(N.  Y.)  151  (1847).  *  Parkinson  v.  Sherman,  74  N.  Y. 

»  Guion  V.  Knapp,  6  Paige  Ch.  (N.  88  (1878) ;  B.  C.  30  Am.    Rep.  268  ; 

T.)  35,  42  (1836).    See  Stuyvesant  v.  Glenn  v.  Whipple,  12  N.  J.  Eq.  (1 

Han,  2  Barb.  Ch.  (N.  Y.)  151,  158  Beas.)  50  (1858) ;  Van  Waggoner  v. 

(1847).  McEwen,  2  N.  J.  Eq.  (1  H.  W.  Gr.) 


520 


OUTSTANDLNG   TITLE    AS    A   DEFENCE. 


[§  432. 


alleged,  and  where  the  grantee  or  the  person  claiming  under 
him  entered  into  possession  on  receiving  the  conveyance  and 
continued  in  possession  without  disturbance,  and  the  deed 
conveying  the  premises  contains  covenants  of  seizin  and 
warranty,'  in  an  action  to  foreclose  a  mortgage  given  to  secure 
a  part  of  the  purchase  money,  the  defendant  can  not  have 
relief  against  the  mortgage  on  the  ground  of  an  outstanding 
incumbrance  or  of  a  failure  of  title.''  The  defendant  will  be  left 
to  his  remedy  on  the  covenants  in  the  deed.'  The  reason  for 
this  rule  is  that  the  incumbrance,  if  let  alone,  may  never  be 
asserted  against  the  property,  as  it  may  be  paid  off  or  satis- 
fied in  some  other  way;  it  would  then  be  inequitable  that 
any  part  of  the  purchase  money  should  be  retained.* 

§  432.  When  purchaser  may  set  up  outstanding  title 
as  a  defence. — Where  there  has  been  an  imposition  or 
fraud  upon  the  purchaser  by  the  vendor,  through  any  willful 


412  (1841) ;  Shannon  v.  Marselis,  1 
N.  J.  Eq.  (Saxt.)  413,  426  (1831). 
See  Odell  v.  Wilson,  63  Cal.  159 
(1883) ;  Doss  v.  Ditmars,  70  Ind.  451 
(1880). 

'  Edwards  v.  Bodine,  26  Wend. 
(N.  Y.)  109  (1841). 

But  it  seems  that  the  rule  will  be 
otherwise,  if  the  deed  does  not  con- 
tain a  covenant  of  warranty.  Grant 
V.  Tallman,  20  K  Y.  191  (1859); 
s.  c.  75  Am.  Dec.  374 ;  Tallmage  v. 
Wallis,  25  Wend.  (N.  Y. )  107 
(1840). 

*  Parkinson  v.  Sherman,  74  N. 
Y.  88  (1878) ;  s.  c.  sub  nom.  Parkin- 
son V.  Jacobson,  13  Hun  (N.  Y.) 
317;- York  v.  Allen,  30  N.  Y.  104 
(1864);  Curtiss  v.  Bush,  39  Barb. 
661  (1863);  Burke  v.  Nichols,  34 
Barb.  (N.  Y.)  430  (1861) ;  s.  c.  21 
How.  (N.  Y.)  Pr.  459  ;  aff'd  2  Keyes 
(N.  Y.)  670  ;  Sandford  v.  Travers,  7 
Bosw.  (N.  Y.)  498  (1860);  Leggett 
V.  McCarty,  3  Edw.  Ch.  (N.  Y.)  124 
(1837) ;  Denston  v.  Morris,  2  Edw. 
Ch.  (N.  Y.)  37  (1833) ;  Gouverneur 


V.  Elmendorf,  5  Johns.  Ch.  (N.  Y.) 
79  (1821) ;  Chesterraan  v.   Gardner, 

5  Johns.  Ch.  (N.  Y.)  29  (1820)  ;  9.  c. 
9  Am.  Dec.  265  ;  Abbott  v.  Allen,  2 
Johns.  Ch.  (N.  Y.)  519  (1817);  s.  c. 
7  Am.  Dec.  554  ;  Bumpus  v.  Platner 
1  Johns.  Ch.  (N.  Y.)  213,  218(1814) ; 
Banks  v.  Walker,  2  Sandf.  Ch.  (N. 
Y.)  344  (1845) ;  Stahl  v.  Hammon- 
tree,  72  Ind.  103  (1880);  Mahoney 
V.  Bobbins,  49  Ind.  146  (1874)  ; 
Hulfish  V.  O'Brien,  20  N.  J.  Eq.  (5 
C.  E.  Gr.)  230  (1869) ;  Hill  v.  Butler, 

6  Ohio  St.  207  (1856). 

^  Parkinson  v.  Sherman,  74  N.  Y. 
88,  92  (1878);  s.  c.  30  Am.  Rep.  268  ; 
York  V.  Allen,  30  N.  Y.  104  (1864) ; 
Curtiss  V.  Bush,  39  Barb.  (N.  Y.) 
661  (1864).  See  Withers  v.  Morrell, 
3  Edw.  Ch.  (N.  Y.)  560  (1842); 
Glenn  v.  Whipple,  12  N.  J.  Eq.  (1 
Beas.)  50  (1858)  ;  Abbott  v.  Allen,  2 
Johns.  Ch.  (X.  Y.)  519  (1817)  ;  8.  c. 

7  Am.  Dec.  554;  Bumpus  v.  Platner, 
1  Johns.  Ch.  (N.  Y.)  213  (1814). 

*  Grant  v.  Tallman,  20  N.  Y.  191, 
195  (1859);  s.  c.  75  Am.  Dec.  374. 


§  432.] 


OUTSTANDING   TITLE   AS   A    DEFENCE. 


521 


misrepresentation  or  concealment,  it  will  take  the  case  out 
of  the  general  rule  and  entitle  the  purchaser  to  redress  in 
equity  in  addition  to  and  beyond  his  covenants.*  Where 
a  tax  deed  is  set  up  in  an  action  to  foreclose  a  mort- 
gage, Avith  a  view  to  extinguishing  the  mortgage  lien,  the 
mortgagee  will  have  a  right  to  litigate  the  validity  of  the  tax 
deed  ;  and  in  such  case  a  tender  of  the  taxes  paid  will 
not  be  necessary."  And  where  the  mortgagor  has  been 
evicted,'  or  an  ejectment  suit  has  been  commenced  against 
him  on  an  outstanding  title,*  or  the  defendant  has  paid  or 
discharged  the  incumbrance,  or  a  part  thereof,'  the  court 
will  interfere,*  and  will  enjoin  a  foreclosure  until  the  action 


'  Denston  v.  Morris,  2  Edw.  Ch 
(N.  Y.)  37  (1833).  See  Gouverneur 
V.  Elmendorf,  5  Johns.  Ch.  (N.  Y.) 
79  (1821) ;  Chesterman  v.  Gardner,  5 
Johns.  Ch.  (N.  Y.)  29  (1820)  ;  8.  c.  8 
Am.  Dec.  265 ;  Johnson  v.  Gere,  2 
Johns.  Ch.  (N.  Y.)  546  (1817); 
Abbott  V.  Allen,  2  Johns.  Ch.  (N.Y.) 
519  (1817);  s.  c.  7  Am.  Dec.  554 ; 
Bumpus  V.  Platner,  1  Johns.  Ch. 
(N.  Y.)  213  (1814).  See  also  Legge  v. 
Croaker,  1  Bal.  &  B.  506,  514  (1811). 

'  Hoffman  v.  Groll,  35  Kan.  652 
(1886). 

»  Ryerson  v.  Willis,  81  N.  Y.  277 
(1880);  Tallmage  v.Wallis,  25  Wend. 
(N.  Y.)  107  (1840)  ;  Price  v.  Lawton, 
27  N.  J.  Eq.  (12  C.  E.  Gr.)  325 
(1876) ;  Hile  v.  Davison,  20  N.  J. 
Eq.  (5  C.  E.  Gr.)  228  (1869) ;  Glenn 
V.  Whipple,  12  N.  J.  Eq.  (1  Beas.) 
50  (1858) ;  VanWaggoner  v.  Mc- 
Ewen,  2  N.  J.  Eq.  (1  H.  W.  Gr.)412 
(1841) ;  Shannon  v.  Marselis,  1  N.  J. 
Eq.  (Saxt.)  413  (1831).  Where  there 
has  been  an  eviction,  and  the  pur- 
chaser is  liable  to  the  true  owner  for 
mesne  profits  to  an  amount  equal  to 
the  sum  demanded  by  his  vendor,  he 
may  plead  such  facts  in  bar  of  an 
action  for  the  breach  as  showing  a 
total      failure      of     consideration  ; 


whether  a  total  or  a  partial  failure  of 
consideration  by  reason  of  defective 
title  can  be  shown  where  the  convey- 
ance was  with  warranty  and  there 
has  not  been  an  eviction,  qu(rre. 
Tallmage  v.  Wallis,  25  Wend.  (N.  Y.) 
107  (1840). 

*  Price  v.  Lawton,  27  N.  J.  Eq. 
(12  C.  E.  Gr.)  325  (1876) ;  Hile  v. 
Davison,  20  N.  J.  Eq.  (5  C.  E.  Gr.) 
228  (1869)  ;  Glenn  v.  Whipple,  12 
N.  J.  Eq.  (1  Beas.)  50  (1858);  Van 
Waggoner  v.  McEwen,  2  N.  J.  Eq. 
(1  H.  W.  Gr.'!  412  (1841). 

'  Grant  v.  Tallman,  20  K  Y.  191 
(1859)  ;  s.  c.  75  Am.  Dec.  384 ;  Coy 
V.  Downie,  14  Fla.  544  (1874).  It 
has  been  said  that  the  court  will  not 
relieve  against  a  mortgage,  on  the 
ground  of  any  outstanding  claim 
which  the  mortgagor  for  greater 
security  to  his  title  has  paid  off, 
without  any  judicial  investigation  or 
decision  on  such  claim  in  a  proceed- 
ing in  which  all  proper  persons  were 
made  parties  and  were  called  on  to 
bring  forward  their  title.  Lee  v. 
Porter,  5  Johns.  Ch.  (N.  Y.j  268 
(1821). 

®  It  was  held  in  Coy  v.  Downie.  14 
Fla.  544  (1874),  that  the  defendant, 
in  an  action  to  foreclose  a  mortgage, 


622  DEFENCE  OF  OUTSTANDING  TITLE.  [§§  433-434. 

in  ejectment  has  been  determined,  even  though  the  mort- 
gage  contains  a  power  of  sale  not  requiring  a  foreclosure  by 
action.* 

§  433'  Payment  of  an  outstanding  claim  by  a  pur- 
chaser as  a  defence. — Where  a  defendant  has  paid  and 
caused  an  incumbrance  to  be  discharged  to  protect  his  title, 
he  must  show,  in  order  to  avail  himself  of  such  defence, 
either  that  what  he  paid  was  actually  due,  or  that  he  had 
given  notice  to  his  vendor  requiring  him  to  satisfy  the  incum- 
brance within  a  limited  time.  Some  of  the  authorities 
establish  the  rule,  without  any  qualification,  that  the  pur- 
chaser may  set  off  or  recover  the  amount  paid  by  him  to 
protect  his  title ;  but  it  seems  reasonable  that  a  vendor  who 
has  been  innocent  of  any  fraud  should  have  an  opportunity 
to  correct  the  mistake,  before  being  obliged  to  pay  more  than 
the  amount  actually  due  on  the  incumbrance." 

Thus,  where  the  grantee  of  land  was  allowed  to  with- 
hold part  of  the  consideration  for  a  specified  time  in  order 
to  take  up  an  outstanding  title,  and,  as  a  security  for  the 
money  withheld,  gave  a  mortgage  to  the  vendor,  in  an 
action  to  foreclose  the  mortgage  it  was  held,  that  it  was  no 
defence  that  in  order  to  perfect  his  title  he  had  paid  the 
amount  withheld  to  a  person  who  claimed  to  have  obtained 
a  quit  claim  of  the  outstanding  title,  where  it  was  neither 
averred  in  the  answer  nor  shown  by  the  proof  that  the  claim 
on  which  the  money  was  paid  was  valid  or  enforceable.* 

§  434.  Eviction  as  a  defence. — In  an  action  to  foreclose 
a  mortgage  given  to  secure  part  of  the   purchase   money. 


may  resist  the  foreclosure  by  recoup-  Bodine,  26  Wend.  (N.  Y.)  109  (1841); 

ment   or   off-set  of  damages  for  a  Peters  v.  Bowman,  98  U.  S.  (8  Otto), 

breach  of  the  covenant  to  the  extent  56  (1878) ;  bk.  25  L.  ed.  84.    Contra, 

of  the  damages  sustained  for  the  Piatt  v.  Gilchrist,  3  Sandf.  (N.  Y.) 

failure  or  partial  failure  of  the  title.  118  (1849). 

But  it  has  been  questioned  in  Indi-  «  Grant  v.  Tallman,  20  N.  Y.  191 

ana  whether  there  can  be  any  de-  (1859);    s.   c.   75    Am.    Dec.    384; 

fence  by  way  of  recoupment  before  Richardson  v,  Tolman,  44  Mich.  379 

an  actual  eviction.     Church  v.  Fish-  (1880). 

er,  40  Ind.  145  (1872).  »  Richardson  v.  Tolman,  44  Mich. 

'  Johnson  v,  Gere,  2  Johns.  Ch.  379  (1880). 
(N.    Y.)    54§    U817);    Edwards    v 


§434.]  EVICTION   AS   A   DEFENCE.  523 

where  the  defendant  has  been  evicted  from  the  premises 
under  a  paramount  title,  such  eviction  will  afford  a  complete 
bar  to  the  foreclosure.'  To  constitute  an  eviction,  a  forcible 
dispossession  of  the  premises,  or  an  actual  physical  expul- 
sion, is  not  necessary.*  An  eviction  can  not  be  more  than 
an  ouster,  and  a  constructive  eviction  will  be  as  effective 
as  an  actual  eviction.' 

The  peaceable  surrender  of  property  under  and  in  pursu- 
ance of  a  judgment  directing  the  delivery  of  possession  in  an 
action,  which  the  mortgagor  is  unable  to  resist,  constitutes  an 
eviction,*  and  this  may  be  accomplished  without  suffering 
an  actual  change  of  possession,  as  by  the  purchase  of  the 
property  under  the  foreclosure  of  a  prior  incumbrance,*  or 
by  being  compelled  to  purchase  an  outstanding  paramount 
title  in  order  to  protect  his  interest.' 

It  was  held  at  one  time  that  to  constitute  an  eviction 
"there  must  be  a  disturbance  of  the  premises  by  legal 
process,"  but  such  is  not  now  the  rule  ;  possession,  without 
a  struggle  to  maintain  it,  may  be  surrendered  to  persons 
holding  a  paramount  title  ;'  in  such  a  case  the  burden  will  be 


1  Coudrey  v.  Coit,  44  N.  Y.  382  *  Coudrey  v.  Coit,  44  N.  Y.  382 

(1871);  Curtiss  v.  Bush,  39  Barb.  (N.  (1871). 

Y.)  661  (1863) ;  Banks  v.  Walker,  2  *  Coudrey  v.  Coit,  44  N.  Y.  382 

Sandf.  Ch.  (N.  Y.)  344  (1845).  (1871).    Tucker  v.  Coouey,  34  Hun 

»  Coudrey  v.  Coit.  44  N.  Y.  382,  (N.  Y.)  227  (1884). 

386  (1871) ;  Dyett  v.    Pendleton,   8  «  Wiiitney  v.  Dinsmore,  60  Mass. 

Cow.  (N.  Y.)  727  (1826).  (6  Cush.)  124  (1850).     See  Coudrey 

3  Dyett  V.  Pendleton,  8  Cow.  (N.  v.  Coit,  44  N.  Y.  382  (1871) ;    Tucker 

Y.)  727,    731    (1826) ;    Whitney    v.  v.    Cooney.    34    Hun  (N.    Y.)    227 

Dinsmore,  60  Mass.  (6  Cush.)  124,  (1884);  Loomis  v.  Bedell,  11  N.  H. 

126  (1850) ;  Whitney  v.  Whiting,  44  74(1840) ;  Foote  v.  Burnet,  10  Ohio, 

Mass.  (3  Mete.)  81  (1841) ;  Sprague  330  (1840) ;  King  v.  Kerr,   5   Ohio, 

V.    Baker,    17    Mass.    586    (1822);  158  (1831) ;  Brown  v.  Dickerson,  12 

Hamilton    v.    Cutts,    4    Mass.    349  Pa.    St.    372    (1819);     Stewart    v. 

(1808);  s.  c.  3  Am.  Dec.  222.  Drake,    8  N    J.  L.  (4  Halst.)  139 

Lord    Mansfield    says:     "Some  (1827);     Davenport    v.    Bartlett,   9 

ambiguity  seems  to  have  arisen  from  Ala.    179    (1846).       See    Bender  v. 

the   term    'actual  ouster,'  as  if  it  Fromberger,  4  U.  S.  (4  Dull.)  436; 

meant  some    act    accompanied    by  bk.  1  L.  ed.  898. 

real  force,  and  as  if  a  turning  out  '  Coudrey  v.  Coit,  44  N.Y.  382,  386 

by  the  shoulders  were    necessary  ;  (1871) ;  Simers  v.  Saltus,  3  Den.  (N. 

but  this  is  not  so."     Fisher  v.  Pros-  Y.)214,  217(1846);  Greeuvault  v.  Da. 

ger,  Cowp.  217  (1774).  vis,  4  Hill  (N.  Y.)  643,  045,  610  (1843). 


524  DEFENCE    OF    WANT    OF   TITLE.  [§435. 

on  the  defendant  to  show  that  the  title  to  which  he  yielded 
possession  was  paramount.  He  can  not  voluntarily  surren- 
der the  possession  to  one  having  no  title  and  then  set  up  the 
defence  of  an  eviction.'  And  it  has  been  held  that  an 
eviction  may  be  established  by  proof  that  at  the  time  of  the 
purchase,  the  lands  sold  were  actually  occupied  under  a 
valid  hostile  title,  so  that  the  purchaser  could  not  obtain 
possession  of  them,  and  that  in  consequence  he  never 
obtained  actual  possession.' 

§  435.  Defence  of  want  of  title.— A  defendant  may 
plead  as  a  defence  to  the  foreclosure  of  a  mortgage  a  want 
of  or  a  defect  in  the  title.  Thus,  where  a  person  purchases 
land  and  gives  his  note  secured  by  a  mortgage  for  the  whole 
or  a  part  of  the  purchase  price,  but  really  acquires  no  interest 
in  the  land  because  of  defects  in  the  title  of  his  vendor,  in  an 
action  on  the  note  and  mortgage  the  defendant  may  set  up 
such  defects  in  his  vendor's  title  as  a  bar  to  the  action,'  if 
the  property  was  conveyed  with  covenants  of  warranty  ;  but 
if  the  conveyance  was  made  without  covenants  with  regard 
to  the  title,  the  failure  thereof  is  said  to  be  no  defence  to 
an  action  upon  the  note  given  for  the  purchase  money.* 

Where  a  mortgage  was  given  upon  one  tract  of  land  to 
secure  the  purchase  money  of  another  tract,  which  latter 
tract  the  mortgagee  covenanted  by  his  bond  to  convey  with 
covenants  of  warranty,  in  an  action  to  foreclose  such  mort- 
gage, the  failure  of  the  title  of  the  vendor  was  said  to  be  a 
good  defence,  upon  the  ground  that  the  mortgagor  under- 
took to  pay  the  mortgage,  only  on  condition  that  the  mort- 
gagee had  a  good  title  to  the  tract  he  agreed  to  convey.*  It 
has  been  said,  that  upon  principles  of  natural  justice  the 


»  York    V.    Allen,  30  N.   Y,    104  35  Am.  Dec.  116.    See  Dickinson  v. 

(1864).  Hall,  31  Mass.  (14  Pick.)  217  (1833); 

'  Withers  v.  Powers,  2  Sandf.  Ch.  Hunt  v.    Livermore,    22  Mass.    ( 5 

(N.  Y.)  350,  note,  (1842) ;  Banks  v.  Pick.)  395  (1827).     See  ante  §  431. 
Walter,  2  Sandf.   Cli.  (N.   Y.)  344         *  Owinger  v.  Thompson,  4  111.  (3 

(1845).  Scam.)  502,  508  (1842). 

'  Frisbee  v.  HofEnagle,  11   Johns.  «  Smith   v.   Newton,  38   111.   230 

(N.  Y.)  50  (1814) ;  Tyler  v.  Young,  (1865). 
8  HI.  (2  Scam.)  444,  447  (1840)  ;  s.  c. 


§  436.]  DEFEITGE   OF   FAILUKE   OF   TITLE.  525 

defendant  can  not  be  required  under  such  circumstances  to 
pay  for  lands  which  can  never  be  conveyed  to  him  by  the 
party  contracting  to  convey.' 

Where  a  note  secured  by  a  mortgage  is  negotiable  in 
form,  title  to  it  may  be  passed  by  indorsement  and  delivery. 
In  an  action  brought  by  an  assignee  of  such  a  note  to  fore- 
close the  mortgage,  failure  of  title  to  a  portion  of  the 
premises  for  which  the  note  was  given  as  a  part  of  the 
purchase  price,  constitutes  no  defence  if  such  assignee  had 
no  notice  of  such  failure  of  title.' 

§  436.  Allegation  of  failure  of  title.— Failure  of  title 
may  be  pleaded  as  a  defence  to  an  action  to  foreclose  a 
mortgage,  whether  the  failure  is  as  to  the  whole  or  only  as 
to  a  part  of  the  property  purchased ;'  and  a  failure  of  title 
may  be  shown  although  the  deed  contains  covenants  of 
warranty.*  Where  there  is  only  a  partial  failure  of  title  it 
will  be  a  defence /r^;  tanto.* 

It  has  been  held  that  in  a  suit  upon  a  promissory  note  and 
and  to  foreclose  a  mortgage  given  for  the  purchase  money 
of  real  estate,  an  answer  attempting  to  set  up  a  failure  of 
title,  but  which  does  not  set  out  a  deed  or  any  covenants 
therein,  or  allege  fraud,  is  insufficient.'  It  is  a  general  rule 
that  a  purchaser  who  has  paid  part  of  the  purchase  money, 
and  given  notes  secured  by  a  mortgage  for  the  residue,  will 
not  be  relieved  against  an  action  to  foreclose  such  mortgage, 
on  the  ground  of  defect  of  title  where  there  is  no  allegation 


>  Tyler  v.  Young,  3  El.  (3  Scam.)  Scam.   (3  III.)  414  (1840);  s.  c.   35 

444,  447  (1840);  8.  c.  35  Am.   Dec.  Am.  Dec.  116. 
116.  *  Banks  v.  Walker.  2  Sandf.  Ch. 

»  Dutton  V.  Ives,  5  Mich.  515  (1858).  (N.  Y.)  344  (1845).     See  ante  §  431. 
See   Stillwell  v.   Kellogg,  14  Wis.  *  Pacific  Iron  Works  v.  Newhall, 

461  (1861) ;  Cornell  v.  Hichens,   11  34  Conn.  67,  77,  78  (1867) :  Avery  t. 

Wis.  353  (1860) ;  Croft  v.  Bunster,  Brown,  31  Conn.  398  (1863). 
9  Wis.  503  (1859).  *  Church  v.  Fisher,   40  Ind.    145 

» See  Banks  v.  Walker,  2  Sandf.  (1872).     See  McClerkin  v.   Sutton, 

Ch.  (N.  Y.)  344  (1845) ;  Pacific  Iron  29   Ind.   407    (1868);    Jenkiuson  v. 

Works  V.  Newhall,  34  Conn.  67,  77,  Ewing,  17  Ind.   505  (1801) ;  Wood- 

78(1867);    Robinson  v.  Wilson,    19  ford  v.   Leavenworth,  14  Ind.    311 

Ga.  505  (1856);  Smith  v.  Newton,  38  (1860);  Laughery  ?.  McLean,  14  Ind. 

111.  230  (1865)  ;  Conway  v.  Case,  22  106  (1860). 
lU.  127  (1859) ;  Tyler  v.   Young,  2 


526  DEFENCE   OF   FAILURE    OF   TITLE.  [§437. 

of  fraud  in  the  sale,  and  he  has  not  been  evicted.'  In  such 
cases  the  purchaser  will  be  confined  to  his  remedy  at  law 
upon  the  covenants  contained  in  his  deed.' 

If  there  is  an  entire  failure  of  title  to  the  land  conveyed 
and  the  purchaser  is  unable  to  obtain  possession  under  it, 
such  failure  to  obtain  possession  will  constitute  a  defence  to 
an  action  to  foreclose  a  mortgage,  given  for  the  purchase 
price,  and  no  personal  judgment  can  be  rendered  in  such 
action  because  of  the  failure  of  consideration,  even  in 
the  absence  of  covenants  of  title  in  the  deed  of  conveyance  ;* 
but  it  would  seem  that  where  the  vendee  acquires  any  title 
whatever  under  his  purchase,  or  even  possession,  if  there 
is  no  fraud,  he  can  not  have  such  relief.*  And  the  fact  that 
a  purchaser  who  has  obtained  possession,  has  been  sued  by 
persons  claiming  title  paramount  to  his  deed,  for  the  pur- 
pose of  recovering  such  possession,  will  not  constitute  a 
defence  to  an  action  to  foreclose  a  purchase  money  mort- 
gage.* 

§  437.  Denial  of  title  in  mortgagor  at  time  of  execut- 
ing mortgage. — Generally  a  mortgagor  in  possession  can 
not  set  up  an  outstanding  title  in  a  third  person  as  a  bar  to 
a  bill  for  the  foreclosure  of  a  mortgage  ;  nor  can  a  purchaser 


'  Ryerson  v.  Willis,  81  N.  T.  277  Johns.  Ch.   (N.  T.)  213,  218  (1814) ; 

(1880).  See  Piatt  V.Gilchrist,  3  Sandf.  Patton  v.  Taylor,  48  U.  S.  (7  How.) 

(N.  Y.)  118  (1849) ;  ConweU  v.  Clif-  132  (1849);  bk.  12  L.  ed.  637. 

ford.  45  Ind.  392  (1873) ;  Key  v.  Jen-  »  Shattuck  v.  Lamb,  65  N.  Y.  499 

nings,  66  Mo.  356, 368(1877);  Wheeler  (1875) ;  Sandf  ord  v.  Travers,  40  N. 

V.    Standley,    50    Mo.    509   (1832) ;  Y.   140  (1869);  Banks  v.  Walker,  2 

Glenn  v.  Whipple,  12  N.  J.  Eq.  (1  Sandf.  Ch.  (N.  Y.)  344  (1845) ;  afid 

Beas.)  50  (1858) ;  Hill  v.   Butler,  6  3  Barb.  Ch.  (N.Y.)  438;  Withers  v. 

Ohio  St.   207  (1856);  Darling  v.  Os-  Powers,  2  Sandf.  Ch.  (N.  Y.)  350, 

borne,  51  Vt  148  (1878) ;  Booth  v.  note,  (1842). 

Ryan,  81  Wis.  45  (1872).     But  com-  *  Abbott  v.  Allen,  2  Johns.   Ch. 

pare  Wilber  v.   Buchanan,   85  Ind.  (N.  Y.)  519  (1817) ;  B.  c.  7  Am.  Dec. 

42  (1882) ;  Chambers  v.  Cox,  23  Kan.  554. 

393  (1880) ;  Mendenhall  v.  Steckel,  »  Miller  v.  Avery,  2  Barb.  Ch.  (N. 

47  Md.  453  (1877);  Hall  v.  Gale,  14  Y.)  582  (1848).     See  Banks  v.  Wal- 

Wis.  54  (1861).  ker,  2  Sandf.  Ch.  (N.  Y.)  344  (1845) ;. 

*  Ryerson  v.  WiUis,  81  N.  Y.  277,  aff'd  3  Barb.  Ch.  (N.  Y.)  438  ;  Piatt 

280(1880);  Abbott  V.Allen,  2  Johns.  v.  Gilchrist,   3  Sandf.   (N.  Y.)  118 

Ch.  (N.  Y.)  519  (1817)  ;  b.  c.  7  Am.  (1849).     Contra,  Johnson  v.  Gere,  3 

Dec.  654  ;    Bumpus  v.   Plainer,   1  Johns.  Ch.  (N.  Y.)  546  (1817). 


§437.]  DEXIAL    OF   TITLE   IN   MOETGAGOE.  527 

in  possession  set  up  such  outstanding  title  as  a  defence  to  a 
bill  to  enforce  the  vendor's  lien  for  the  purchase  money, 
because  each  is  alike  estopped  from  denying  the  title 
asserted  against  him.*  A  mortgagor  who  has  covenanted  to 
defend  the  title  against  all  adverse  claims,  is  estopped  from 
alleging  title  paramount  in  a  third  person.' 

It  would  seem  that  in  an  action  to  foreclose  a  mortgage, 
the  defendant  may  deny  any  title  to  the  premises  covered 
by  the  mortgage  at  the  time  it  was  executed,'  especially 
where  there  is  no  recital  of  a  particular  fact  forming  an 
inducement  for  the  contract,  general  words  not  being  suffi- 
cient to  create  an  estoppel.  When  the  mortgagor  conveys 
without  title,  but  with  covenants  of  warranty,  he  will  be 
concluded,  and  an  after  acquired  estate  will  pass  to  the 
mortgagee,  not  because  the  mortgagor  had  a  title  at  the 
time  of  the  execution  of  the  mortgage,  but  because  his  deed 
will  raise  an  equitable  estoppel.* 


>  Strong  V.  WaddeU,  56  Ala.  471  Ins.  Co.  v.  McKay,  43  N.  T.  Suit. 

(1876).  Ct.    (1    Sheld.)    138    (1867);    Van 

«  Macloon  v.  Smith,  49  Wis.  200  Amburgh  v.  Cramer,  16  Hun  (N.Y.) 

(1880).  205  (1878). 

*  See  Sparrow  v.  Kingman,  IN.  •*  Sparrow  v.  Kingman,  1  N.  T. 

T.  242,  246  (1848) ;   National  Fire  242,  246  (1848). 


CHAPTER  XXI. 

PRACTICE  ON  FAILURE  TO   ANSWER— DEFAULT— PRACTICE 
ON  TRIAL  AFTER  ISSUE  JOINED. 

REFERENCE   TO    COMPUTE   AMOUNT    DUE-POWERS    AND    DUTIES   OF 

REFEREE  — REPORT    OF    REFEREE  — DECREE    OF    FORECLOSURE 

AND  SALE— PROCEEDINGS  ON   TRIAL. 


§  438.  Introductory. 

439.  When  notice  of  motion  for 

order  of  reference  not  neces- 
sary. 

440.  When  such  notice  is  neces- 

sary. 

441.  Upon   what  papers    motion 

made. 

442.  What  mu.st  be  shown  by  the 

motion  papers. 

443.  Reference  to  compute  amount 

due — Who  may  be  referee. 

444.  Contents  of   order  —  Whole 

amount  due,  and  not  due. 

445.  Contents    of    order  —  When 

Infant  and  absentee  defen- 
dants. 

446.  Miscellaneous  matters  in  or- 

der of  reference — Changing 
referee. 

447.  Proceedings   on    reference — 

General  rules. 

448.  Who  to  prosecute  reference 

— Service  of  order. 

449.  Examination  on  reference — 

Evidence. 

450.  Computing    amount    due — 

Statement  of  items — Allow- 
ance for  repairs  and  pay- 
ment of  prior  liens. 

451.  Computing  amount  on  build- 

ing and  loan  association 
mortgage — Fines  and  dues. 

452.  Allowance  on    reference   of 

taxes  and  assessments  paid 
by  mortgagee. 

453.  Computing  amount  due  on 

failure  to  pay  taxes  and 
assessments. 


§  454.  Allowance  of  insurance  pre- 
miums paid  by  mortga- 
gee. 

455.  Powers  and  duties  of  referees 

— Generally. 

456.  Finding  as  to  how  property 

should  be  sold. 

457.  Conduct  of    reference — Dis- 

cretion and  authority  of  re- 
feree— Where  reference  to 
to  be  held. 

458.  Report  of  referee. 

459.  Filing    and    confirming    re- 

feree's report  —  Exceptions 
thereto — New  hearing. 

460.  Application  for  judgment — 

What  must  be  shown. 
46L  Notice    of    application    for 
judgment. 

462.  Decree   of    foreclosure    and 

sale  — Variations  from  re- 
feree's report. 

463.  Extent  of  relief  granted  by 

decree  of  sale. 

464.  Opening  default — Power  of 

court. 

465.  Proceedings    on    trial    after 

issue  joined — General  rules. 

466.  Proceedings  after  issue  joined 

— Where  part  only  of  the 
defendants  have  answered. 

467.  Proceedings  after  default  or 

issue  joined — Where  some 
of  the  defendants  are  infants 
or  absentees. 

468.  Proceedings  where  the   bill 

is  taken  as  confessed. 


§  438.     Introductory. — In  an  action  to  foreclose  a  mort- 
gage, if  the  defendants  fail  to  answer  within  the  time  allowed 

628 


§  439.3       PEAcncE  ON  default.         529 

by  law  for  that  purpose,  or  the  rights  of  the  plaintiff,  as 
stated  in  the  complaint,  are  admitted  by  the  answer,  the 
plaintiff  may  apply  for  an  order  of  reference  to  some  suitable 
person  to  compute  the  amount  due  to  him,  and  to  such  of 
of  the  defendants  as  are  prior  incumbrancers,  and,  where 
the  whole  amount  secured  by  the  mortgage  is  not  due,  to 
ascertain  whether  the  mortgaged  premises  can  be  sold  in 
parcels.  If  any  of  the  defendants  are  infants  who  have  put 
in  a  general  answer  by  their  guardian  ad  litem,  or  are 
absentees,  the  order  of  reference  must  direct  the  person  to 
whom  the  cause  is  referred  to  take  proof  of  the  facts  and 
circumstances  stated  in  the  complaint,  to  examine  the 
plaintiff  or  his  agent  on  oath  as  to  any  payments  which  have 
been  made,  and  to  compute  the  amount  due  upon  the  mort- 
gage, preparatory  to  the  application  for  a  decree  of  fore- 
closure and  sale  of  the  premises.' 

In  an  action  to  foreclose  a  mortgage,  a  judgment  by 
default  against  one  who  was  properly  made  a  party  to  the 
action,  and  duly  served  with  process,  and  required  to  answer 
as  to  any  interest  he  might  have  or  claim  in  the  premises, 
will  be  conclusive  as  to  any  prior  claim  of  interest  or  title 
adverse  to  the  plaintiff.' 

§  439-  When  notice  of  motion  for  order  of  reference 
not  necessary.— The  order  of  reference,  in  an  action  for  the 
foreclosure  of  a  mortgage,  generally  known  as  the  interiocu- 
tory  order  to  compute  the  amount  due  upon  default,  is 
made  ex  parte  and  without  notice  to  any  one,  if  it 
appears  from  the  papers  presented  to  the  court  that  no 
appearance  has  been  made  by  any  defendant.*  A  notice  of 
motion  for  an  order  of  reference  can  be  dispensed  with  only 
in  case  no  appearance  has  been  made  by  any  defendant ;  the 
motion  is  generally  governed  by  the  rules  applicable  to 
ex  parte  motions  in  other  actions.  It  has  been  the  practice 
for  many  years,  according  to  the  rule  handed  down  from  the 
court  of  chancery,  in  case  a  notice  of  motion  is  made  for 


»  K  Y.  Supreme  Court  Rule  60.    See  post  §  445, 

•  Barton  v.  Anderson,  104  Ind.  578  (1885) ;  s.  c.  2  West.  Kep,  679. 

•  It.  Y.  Supreme  Court  Rule  60. 

(34) 


530  MOTION   FOE    REFERENCE.         [§§440-441. 

the  relief  demanded  in  the  complaint,  or  for  judgment,  to 
dispense  with  a  separate  notice  of  motion  for  an  order  of 
reference  to  compute  the  amount  due  on  the  mortgage.' 

§  440.  When  such  notice  is  necessary. — A  notice  of 
motion  for  an  order  of  reference  must  be  served  upon  such 
of  the  defendants  as  have  appeared  in  the  action,  at  least 
eight  days  before  the  hearing  of  the  motion.  Failure  to 
serve  such  notice  is  an  irregularity  for  which  the  court  may 
subsequently  cause  the  order  to  be  set  aside,  if  objected  to.' 
The  motion  is  generally  made  without  placing  the  cause  on 
the  calendar.'  It  must  be  made  at  a  term  of  the  court,  and 
not  before  a  judge  at  chambers;  it  must  also  be  made  in 
the  district  in  which  the  property  is  located  and  in  which  the 
action  is  triable,  or  in  an  adjoining  county.* 

§  441.  Upon  what  papers  motion  made. — The  motion 
for  an  order  of  reference  is  always  based  upon  the  plead- 
ings, and  upon  an  affidavit  stating  the  facts,  by  reason  of 
which  the  plaintiff  claims  to  be  entitled  to  the  order  of  refer- 
ence. The  affidavit  may  be  verified  by  the  plaintiff  or  by 
any  person  who  has  a  knowledge  of  the  facts.  The  steps 
which  have  been  taken  in  the  action  may  be  shown  by  the 
affidavit  of  the  plaintiff's  attorney  or  of  the  attorney's  clerk.' 
If  it  is  desired  upon  the  motion  to  show  the  time  of  filing 
the  complaint  and  the  lis  pendens,  it  may  be  done  by 
affidavit  or  by  the  certificate  of  the  county  clerk.' 

The  affidavits  of  the  persons  who  served  the  summons  on 
the  different  defendants  should  accompany  these  papers.  If 
service  has  been  made  by  publication,  or  without  the  state,  or 
by  any  form  of  substituted  service,  all  of  the  papers  showing 


>  Kelly  V.  Searing,  4  Abb.  (N.  T.)  Proc.  Eep.  (N.  T.)  340,  343  (1888), 

Pr.  354  (1857).    This  case  reviews  the  holding  that  a   separate  notice  of 

history  of  the  present  N.  Y.  Supreme  motion  for  judgment  is  necessary. 
Court  Rule  60,  as  transmitted  from         «  N.  Y.  Supreme  Court  Rule  60 ; 

the  rules  of  the  court  of  chancery  in  IST.  Y.  Code  Civ.  Proc.  §  780. 
force  in  1844,  being  a  substitute  for         »  N.  Y.  Supreme  Court  Rule  60. 
rule  134  of  that  year ;  it  also  states         <  ]sf ^  y.  Code  Civ.  Proc.  §  769. 
the  best  practice  upon    default  in  "  N.  Y.  Supreme  Court  Rule  60. 

foreclosure  cases.     But  see  Citizens'  «  N.  Y.  Supreme  Court  Rule  60. 

Savings   Bank  v.  Bauer,    14    Civ. 


§§  442-443.]  MOTION  papers.  531 

such  service  to  be  regular  and  complete,  should  accompany 
the  motion  papers,  or  at  least  be  referred  to  therein  as  on  file 
with  the  clerk  of  the  court.  All  papers  used  upon  the  motion 
should  be  filed  at  the  time  of  making  the  motion. 

§  442.    What  must  be  shown  by  the  motion  papers.— 
Upon  an  application  for  a  reference  to  compute  the  amount 
due  and  for  judgment  of  foreclosure  and  sale,  it  must  appear 
that  proper  and  complete  service  of  the  summons  has  been 
made  upon  each   of   the   defendants,'    or   that   they   have 
appeared,  and  that  the  time  allowed  by  law  for  serving  an 
answer  or  demurrer  has  expired,  and  that  the  attorney  of 
the  plaintiff  has  not  been  served  with  a  copy  of  an  answer 
or   of   a   demurrer.     The  afifidavits  should  show  that  the 
bill  is  taken  as  confessed,  and  that  the  money  secured  by 
the  mortgage  is  due  and  payable  ;    also  that  a  lis  pendens 
with  the  complaint  was  filed  at  least  twenty  days  prior  to  the 
application."    The  affidavit  of  regularity,'  which  was  required 
to  be  made  by  the  solicitor  of  the  complainant,  under  the 
chancery  practice  prior  to  the  Code,  is  not  nece.^sary  under 
the  present  practice.* 

§  443.  Reference  to  compute  amount  due— Who  may 
be  referee.— Where  a  defendant  interposes  an  answer  raising 
a  material  issue,  but  fails  to  appear  at  the  trial,  the  plaintiff 
can  not  have  an  order  of  reference  to  compute  the  amount 
due  as  upon  default.*  Where  an  answer  sets  up  a  defence, 
or  what  is  claimed  to  be  a  defence,  the  correct  practice,  if 
no  demurrer  is  interposed,  and  a  motion  is  not  made  to 
strike  out  the  answer  as  irrelevant,  nor  for  judgment  upon 
it  as  a  frivolous  pleading,  is  to  place  the  cause  upon  the 

>  An  action  can  not  be  referred  *  N.  Y.  Supreme  Court  Rule  60. 

While  any  defendant  against  whom  *  As  to  the  requisites  of  the  affl- 

the  plaintiff  seeks  to  recover  a  judg-  davit  of  regularity  under  the  old 

ment  for  deficiency  has  not  been  practice,  see  Nott  v.  Hill,  6  Paige 

served  with  the  summons,   or  has  Ch.  (K  Y.)  9  (1886). 

been  served  only  with  a  notice  of  no  *  Laws    of    1840,    chap.    342,    as 

personal  claim,  and  has  not  appeared.  amended  by  laws  of  1844,  chap.  346. 

Goodyear  v.  Brooks,  4  Robt.  (N.  Y.)  »  Exchange  Fire  Ins.  Co.  v.  Early, 

682  (1866) ;  8.  c.  2  Abb.  (N.  Y.)  Pr.  4  Abb.  (N.  Y.)  N.  C.  78  (1878). 
N.  S.  296. 


532  REFERENCE   TO    CO^klPUTE    AMOUNT   DUE.      [§444. 

calendar,  and  at  the  trial  to  demand  judgment  upon  the  plead- 
ings.' 

The  referee  appointed  in  foreclosure  cases  to  compute  the 
amount  due,  or  to  sell  the  mortgaged  premises,  must  be 
selected  by  the  court ;  and  the  court  can  not  appoint  as  such 
referee  a  person  named  by  either  of  the  parties  to  the  action 
or  by  their  attorneys.'  Any  suitable  person  may  be  appointed 
referee.  It  is  not  necessary  that  he  should  be  an  attorney, 
although  the  usual  practice  is  to  appoint  an  attorney  or 
an  attorney's  clerk  as  referee  ;'  yet  it  has  been. held  that  the 
court  can  not  appoint  as  a  referee  to  sell,  the  notary  before 
whom  the  affidavit,  upon  which  the  application  for  the  refer- 
ence is  based,  was  verified.* 

§  444.  Contents  of  order — Whole  amount  due,  and  not 
due. — Where  the  whole  amount  secured  by  a  mortgage  is 
due,  and  none  of  the  defendants  are  infants  or  absentees, 
the  order  of  reference  should  simply  direct  a  computation  of 
the  amount  due  to  the  plaintiff,  and  to  such  of  the  defend- 
ants as  are  prior  incumbrancers  of  the  mortgaged  premises, 
if  there  are  any  such.  The  referee  may  also  be  required  to 
compute  the  amount  due  on  other  mortgages  set  up  in  the 
answer,  and  to  ascertain  whether  there  are  any  prior  liens 
upon  such  premises.*  Such  an  order  of  reference  is  to 
be  regarded  as  an  interlocutory  decree,'  made  by  the  court 


>  Stuyvesant  v.  Browning,  33  N.  ties  of  New  York  and  Kings,  shall 

Y.    Supr.  Ct.  (1  J.  &  S.)  203,  207  be  appointed  referee  in  a  mortgage 

(1871)  ;  Boyce  v.   Brown,    7  Barb.  foreclosure  case  under  any  order  or 

(N.  Y.)  81  (1849) ;  VanValen  v.  Lap-  judgment  of  any  court,  unless  the 

ham,  13  How.  (N.Y.)  Pr.  243(1856).  parties  to  the  action  mutually  agree 

See  N.  Y.  Supreme  Court  Rule  60,  to  such  referee.     See  Laws  of  1876, 

*  N.  Y.  Supreme  Court  Rule  61.  chap.  205. 

It  was  held  in  White  v.  Coulter,  1  *  Steward  v.  Bogart  (N.  Y.  Sup. 

Hun  (N.  Y.)  357  (1874) ;  s.  c.  3  T.  Ct.)  2  Month.   L.    Bull,  94  (1880). 

&  C.  (N.  Y.)  608,  that  the  appoint-  »  Chamberlain  v.  Dempsey,  36  N. 

mcnt  of  a  referee  who  is  nominated  Y.  144  (1867) ;  s.  c.  1  Trans.  App. 

by  one  of  the  parlies  in  a  mortgage  257,  reversing  9  Bosw.  (N,  Y.)  540  ; 

foreclosure    and    approved  by    the  b.  c.  15  Abb.  (N.  Y.)  Pr.  1. 

other,  is  not  an  irregularity.  ,    «  Roberts  v.  White,  39  N.Y.  Supr. 

2  No  clerk,  deputy  clerk,  or  assis-  Ct.  (7  J.  &  S.)  272,  275  (1875).     See 

tant  clerk  of  any  court  of  record,  or  Chamberlain  v.  Dempsey,  15  Abb. 

of  the  surrogate's  court  of  the  coun-  (N.  Y.)  Pr.  1   (1867) ;    Johnson  v. 


§  445.]  OEDER  OF  REFERENCE.  533 

and  not  by  a  judge  in  chambers,  and  is  not  appealable  ;* 
but  as  an  order  of  reference  is  in  aid  of  final  judgment,  an 
appeal  from  the  final  judgment  will  bring  up  for  review  all 
previous  interlocutory  orders  and  decrees.* 

In  cases  where  the  whole  amount  secured  by  the  mortgage 
has  not  become  due,  the  order  of  reference  should  also  require 
the  referee  "  to  examine  and  report  whether  the  mortgaged 
premises  can  be  sold  in  parcels."*  Where  the  referee  reports 
that  the  premises  can  be  sold  to  advantage  in  parcels,  he 
should  also  report  the  order  in  which  the  sale  of  parcels 
should  be  made,  so  that  the  court  may  direct  the  order  in 
which  such  parcels  shall  be  sold,  so  as  to  protect  the  rights  of 
the  different  parties  interested  in  the  equity  of  redemption.* 

§  445.  Contents  of  order — When  infant  and  absentee 
defendants. — Where  any  of  the  defendants  are  infants  or 
absentees,  the  order  of  reference,  besides  providing  for  the 
computation  of  the  amount  due,  must  also  direct  the  referee 
to  take  proof  of  the  facts  and  circumstances  set  forth  in  the 
complaint,  and  to  report  to  the  court  the  evidence  taken  before 
him.*  The  court  is  bound  to  protect  the  interests  of  infant 
litigants,  whether  represented  by  their   guardians  or  not.* 


Everett,  9  Paige  Ch.   (N.  Y.)   636  »  Chamberlain  v.  Dempsey,  36  N. 

(1842).  Y.  144  (1867) ;  N.  Y.  Code  Civ.  Proc. 

«  Gray  v.  Fox,  1  N.  Y.  Code  Rep.  §  1316. 

N.    S.    334   (1852) :    Dickenson    v.  »  N.  Y.  Supreme  Court  Rule  60. 

Mitchell,  19  Abb.  (N.  Y.)  Pr.  286  *  See  Erie  Co.   Savings  Bank  v. 

(1865);    Harris   v.   Mead,   16  Abb.  Roop,   48  N.   Y.   292,   298  (1872); 

(N.  Y.)  Pr.  257  (1863) ;  UbsdeU  v.  Ferguson  v.  Kimball,  3  Barb.  Ch. 

Root,  3  Abb.  (N.  Y.)  Pr.  142  (1856) ;  616  (1846) ;   Rathbone  v.   Clark,   9 

McLean  v.  East  River  Ins.  Co.,  8  Paige    Ch.    648   (1842);   Jumel   v. 

Bosw.  (N.  Y.)  700  (1861) ;  Smith  v.  Jumel,  7  Paige  Ch.  591  (1839). 

Dodd,  3  E.  D.  Smith  (N.  Y.)  348  »  Wolcott  v.  Weaver,  3  How.  (N, 

(1854) ;  Dean  v.  Empire  Mut.  Ins.  Y.)  Pr.  159  (1847) ;  N.  Y.  Supremo 

Co.,  9  How.  (N.  Y.)  Pr.  69  (1853);  Court  Rule  60. 

Bryan  v.  Brennon,  7  How.  (N.  Y.)  *  Sheahan  v.  Wayne  Circuit  Judge, 

Pr.  359  (1853).     But  where  an  order  42  Mich.  69  (1879).     General  guar- 

of  reference  is  directed  in  a  case  in  dians  do  not  represent  their  infant 

which  a  reference  is  not  authorized  wards  in  foreclosure    proceedings, 

by  law,  it  will  be  appealable.    Cram  and  the  solicitors  of  the  guardians 

V.  Bradford,  4  Abb.  (N.  Y.)  Pr.  193  can  not  bind  the  rights  of  the  infants; 

(1857) ;    Whitaker    v.    Desfosse,    7  nor  can  guardians  ad  litem  bind  the 

Bosw.  (N.  Y.)  678,  680  (1861).  infants,  except  in  strict  accordance 


534  COJN^TEXTS    OF    ORDER    OF    REFERENCE.         [§  446. 

Where  a  non-resident  defendant  has  not  been  personally 
served  with  the  summons,  and  does  not  appear  in  the  aetiofi, 
a  judgment  can  not  be  rendered  against  him,  except  on  the 
report  of  the  referee  as  to  the  truth  of  the  facts  and  circum- 
stances stated  in  the  complaint.' 

The  evidence  required  of  the  plaintiff  to  establish  the 
allegations  of  his  complaint  must  be  legal  proof ;  secondary- 
evidence  will  not  be  sufficient.'  Where  an  order  has  been 
made,  upon  the  pleadings  and  upon  affidavits  in  a  mortgage 
foreclosure,  appointing  a  referee  to  compute  the  amount 
due,  and  to  inquire  into  the  facts  and  circumstances  set  forth 
in  the  plaintiff's  complaint,  such  referee  can  not  receive  an 
affidavit  verified  before  a  commissioner  of  deeds  as  evidence 
of  any  such  facts.*  But  the  testimony  on  such  a  reference, 
being  in  the  nature  of  affidavits,  a  husband  and  wife  may 
testify  in  behalf  of  each  other.* 

Where  any  of  the  defendants  are  infants  or  non-appearing 
absentees,  the  order  of  reference,  besides  providing  for  the 
computation  of  the  amount  due  and  for  taking  proof  of 
the  facts  and  circumstances  alleged  in  the  complaint,  should 
also  require  that  the  referee  examine  the  plaintiff,  or  his 
agent,  under  oath,  as  to  any  payments  which  have  been 
made  on  the  mortgage  debt.'  In  cases  where  proofs  have 
been  taken  in  chief,  prior  to  entering  an  order  of  reference, 
upon  a  proper  application  made  to  the  court,  permission 
will  be  granted  to  the  plaintiff  to  use  such  proofs  upon  the 
reference  against  an  absentee.' 

§  446.  Miscellaneous  matters  in  order  of  reference — 
Changing  referee. — An  order  of  reference  to  compute  the 
amount  due,  and  to  take  proof  of  the  facts  and  circumstances 
alleged  in  the  complaint,  and  to  examine  the  defendant,  or 
his  agent,  as  to  any  payments  that  have  been  made,  should 


■with  the  rules  for  their  protection.  »  Security  Fire  Ins.  Co.  v.  Martin, 

Sheahan  v.  Wayne  Circuit  Judge,  15  Abb.  (N.  Y.)  Pr.  479  (1863). 
sujjra.  *  Laing  v.  Titus,  18  Abb.  (N.  T.) 

'  Corning  v.  Baxter,  6  Paige  Ch.  Pr.  388  (1864). 
(X.  Y.)  179  (1836).  6  N.  Y.  Supreme  Court  Rule  60. 

'  Wolcott  V.  Weaver,  3  Hovr.  (N.  «  Corning  v.  Baxter,  6  Paige  Ch. 

Y.)  Pr.  159  (1847).  (N.  Y.)  178  (1836). 


§  447.]         C0XTE2s^TS    OF    ORDER    OF   REFERENCE.  535 

define  the  duties  of  the  referee  and  limit  the  scope  of  the 
reference,  and  should  also  require  him  to  report  the  proofs 
and  evidence  taken  before  him.'  An  order  of  reference  to 
compute  the  amount  due,  granted  against  a  non-answering 
defendant,  should  not  combine  with  it  a  reference  of  the 
whole  issue  as  to  other  defendants  who  contest  the  plaintiff's 
claims.  They  are  separate  proceedings,  and  their  union  in 
the  same  order  will  be  irregular  as  to  the  non-answering 
defendant,  though  regular  as  to  the  contesting  defendants.* 
Where  there  has  been  a  reference  in  a  mortgage  fore- 
closure to  compute  the  amount  due,  to  take  proof  of 
the  facts  and  circumstances  alleged  in  the  complaint, 
and  to  examine  the  plaintiff  or  his  agent  on  oath  as  to 
payments,  the  matter  can  not  be  withdrawn  from  the 
referee  named  without  a  special  order  of  the  court  ;*  and 
such  an  order  will  not  be  granted,  unless  it  is  made  to. appear 
that  there  are  special  reasons  therefor,  such  as  the  inability  of 
the  referee,  because  of  illness  or  pressure  of  private  business, 
to  proceed  with  reasonable  dispatch  in  hearing  and  deter- 
mining the  matter  referred  to  him,  or  that  there  has 
been  unreasonable  delay  on  the  part  of  the  referee  to 
proceed  with  the  examination,  or  that  he  has  adjourned 
the  proceedings  for  an  unreasonable  length  of  time,  against  the 
wishes  of  a  party  to  the  suit, — either  of  which  reasons  will 
be  a  sufficient  cause  to  justify  a  change  of  a  referee.* 

§  447.    Proceedings  on  reference— General  rules. — The 

proceedings  on  a  reference  in  a  mortgage  foreclosure,  are,  in 
general,  similar  to  those  on  other  interlocutory  references,  and 


'  Wolcott  V.  Weaver,  3  How.  (N.  pointed.      Chatfield    v.   Hewlett,   2 

Y.)  Pr.  159  (1847).  Dem.  (N.  T).  191,  196  (1882),  citing 

«  Cram  v.  Bradford,  4  Abb.  (N.  Nason  v,  Luddington,  56  How.  (N. 

Y.)  Pr.  193  (1857).    See  post  %4m.  Y.)  Pr.    173  (1878);    Leaycroft  v! 

2  But  it  seems  that  where  a  referee  Fowler,  7  How.  (N.  Y.)  Pr.  259,  260 
is  appointed  by  the  court,  and  by  (1852) ;  Whalen  v.  Board  of  Super- 
stipulation  of  the  parties,  without  an  visors,  6  How.  (N.  Y.)  Pr.  278  (1851). 
order  from  the  court,  another  person  *  Forrest  v.  Forrest,  3  Bosw.  (N. 
is  substituted  in  the  place  of  the  Y.)  650  (1859).  See  Rathbim  v. 
referee  originally  appointed,  such  Ingersoll.  34  N.  Y.  Supr.  Ct.  (2  J. 
substituted  referee  will  possess  all  the  &  S.)  211,  214  (1872). 
powers   of   the  one    originally  ap- 


63G  PEOCEEDUSTGS    ON    REFERENCE.  [§448. 

are  governed  by  the  same  rules.  The  referee  should  be  duly 
sworn  before  entering  upon  his  official  duties,'  unless  the 
parties,  being  of  full  age  and  competent,  either  by  written 
stipulation  or  orally,  expressly  w^aive  such  oath.*  Such 
■waiver  should  be  entered  in  the  minutes  of  the  referee.* 
Should  the  referee  fail  to  take  the  oath  prescribed,  it  will  be 
an  irregularity;  but  such  irregularity  will  be  deemed  waived, 
if  the  parties  proceed  with  the  reference  without  objec- 
tion.* 

§  448.    Who  to  prosecute  reference — Service  of  order. 

— The  order  appointing  a  referee  in  a  foreclosure  is  his 
commission  to  act,  and  until  such  order  has  actually  been 
entened,  and  a  certified  copy  served  upon  him,  he  should 
not  proceed  with  the  reference,  for  the  validity  of  all  his 
proceedings  will  depend  entirely  upon  the  extent  and  scope 
of  the  order  from  which  he  derives  his  authority.* 

It  is  the  general  rule  that  the  party  who  obtains  an  order 
of  reference,  is  entitled  to  the  prosecution  thereof  in  the  first 
instance,  unless  the  court  in  making  it  commits  the  prose- 
cution to  some  other  party ;  but  where  both  parties  are 
alike  interested,   the  plaintiff's  counsel  will  be  entitled  to 


'  It  has  beeu  held  that  a  referee  to  as  to  apply  to  referees  appointed 

compute  the  amount  due  in  a  fore-  under  g  1215. 

closure,  should    take    the    oath    of  *  Exchange  Fire  Ins.  Co.  v.  Early, 

officeprescribedbyg  lOlGof  theN.Y.  4  Abb.  (N.  Y.)  K  C.  78  (1878). 

Code  of  Civil  Procedure.   Exchange  *  Malcolm  v.    Foster,    5    N.    T. 

Fire  Ins.  Co.  v.  Early,  4  Abb.  (N.  Week.   Dig.  310  (1877) ;  Browning 

Y.)  N.  C.  78  (1878) ;  s.  c.  54  How.  v.  Marvin,  5  Abb.  (N.  Y.)  N.  C.  285 

(N.  Y.)  Pr.  279.     See  Browning  v.  (1878).     In  re  Vilmar,  10  Daly  (N. 

Marvin,  5  Abb.  (N.  Y.)  N.  C.  285  Y.)  15  (1878). 

(1878).   But  it  is  said  in  McGowan  v.  ■*  See  Malcolm  v.  Foster,  5  N.  T. 

Newman,  4  Abb.  (N.  Y.)  N.  C.   80  Week.  Dig.  310  (1877) ;  Bucklin  v. 

(1878),  that  no  oath  of  office  is  re-  Chapin,  53  Barb.  (N.  Y.)  488  (1868) ; 

quired    from    a    referee    appointed  Bonner  v.  McPhail,  31  Barb.  (N.  Y.) 

under  and  in  pursuance  to  §  1215  of  111   (1860) ;    Garcie  v.    Shelden,    3 

the  N.  Y.  Code  of  Civil  Procedure  ;  Barb.  (N.  Y.)  232  (1848) ;   Keator  t. 

that  the  provisions  of  §  1016  of  the  Ulster  &  Delaware  Plank  Road  Co., 

Code,  relate  solely  to  referees  appoint-  7  How.  (N.  Y.)  Pr.  41  (1851). 

cd  as  prescribed  in  that  section,  which  *  Bonner  v.  McPhail,  31  Barb.  (N. 

relates  to  trials  without  jury,  and  F.)  106,  116(1860).     See  Bucklia  t. 

are  applicable  to  cases  where  issue  Chapin,   53  Barb.  (N.  Y.)  488,  4S\ 

is  joined,  but  can  not  be  extended  so  (1868). 


§  449.]    EXAMINATION  ON  EEFEKENCE ^EVIDENOE.  537 

prosecute  the  reference  in  the  first  instance.*  Should  the 
party  entitled  to  prosecute  the  reference  in  the  first  instance, 
neglect  to  proceed  within  a  reasonable  time  after  the  entry 
of  the  order,  any  person  interested  in  the  reference  may 
apply  to  the  court  for  an  order  requiring  the  party  entitled 
to  prosecute  it,  to  show  cause  why  such  prosecution  should 
not  be  taken  from  him  and  committed  to  another.' 

§449.  Examination  on  reference — Evidence. — Where 
in  an  action  of  foreclosure  an  order  has  been  granted  upon  the 
pleadings  and  affidavits,  appointing  a  referee  to  compute 
the  amount  due,  to  examine  the  plaintiff  as  to  payments,  and 
to  take  proof  of  the  facts  and  circumstances  alleged  in  the 
bill,  the  referee  has  no  discretionary  powers,  but  must  be 
confined  to  the  scope  and  authority  of  the  order  appointing 
him ;  he  can  not  go  into  an  examination  of  the  plaintiff  as 
to  any  facts  except  those  relating  to  payments  on  the  mort- 
gage, nor  can  he  examine  an  absent  defendant  in  behalf  of 
his  co-defendant  as  to  any  defence  set  up  in  an  answer.* 

On  a  reference,  on  default  in  a  mortgage  foreclosure,  to 
compute  the  amount  due  and  to  take  proof  of  the  facts  and 
circumstances  stated  in  the  complaint,  the  referee  should 
require  legal  proof  of  every  fact  embraced  in  the  subject  of  the 
reference  ;  secondary  evidence  is  inadmissible.*  He  can  not 
receive  an  affidavit  verified  before  a  commissioner  of  deeds  as 
evidence  of  the  amount  due  on  the  mortgage,  or  of  any  other 
fact  to  be  established  ;'  but  he  may  receive  the  recital  of  the 
bond  in  the  mortgage  set  out  in  the  complaint  as  evidence 
of  its  execution,  if  the  bond  has  been  lost.*     On  a  reference 


'  Quackenbush    v.    Leonard,    10  inconsistent  therewith,  such,  doubt- 
Paige  Ch,  (K  Y.)  131  (1843).  less,  is  still  the  correct  practice. 

*  Such  was   the   practice  in  the  '  McCrackan  v.  Valentine  Ex'rs., 

former   court   of    chancery.      See  9  N.  Y.  43  (1853). 

Quackenbush  v.  Leonard,  10  Paige  *  Wolcott  v.  Weaver,  8  How.  (N. 

Ch.  (N.  Y.)  131  (1843) ;  Holley  v.  Y.)  Pr.  159  (1847). 

Glover,  9  Paige  Ch.  (N.  Y.)  7(1841);  »  Security  Fire  Ins.  Co.  v.  Martin, 

N.  Y.  Chancery  Rule  101  ;  such  also  15  Abb.  (N.  Y.)  Pr.  479  (1863). 

is  the  established  English  practice,  *  Cooper  v.  Newland,  17  Abb.  (N. 

Powell  V.  Wallworth,  2  Madd.  Ch.  Y.)  Pr.  342  (1863) ;  Knickerbocker 

436  (1817) ;  and  as  the  Code  of  Civil  Life  Ins.  Co.  v.  Hill,  16  Abb.  (N.  Y.) 

Procedure    contains    no    provision  Pr.  N.   S.   321  (1875).    The  proper 


538  COMPUTING   AMOUNT   DUE.  [§400. 

to  compute  the  amount  due  in  a  foreclosure,  the  testimony 
of  the  witnesses  need  not  be  signed  by  them.' 

Where  there  are  infant  or  absentee  defendants,  and  the 
plaintiff  or  his  agent  is  to  be  examined  on  oath  by  the  referee 
as  to  any  payments  that  may  have  been  made  on  the  bond 
and  mortgage,  the  examination  of  the  witnesses  should  be 
full  and  exhaustive. 

§  450.  Computing  amount  due— Statement  of  items — 
Allowance  for  repairs  and  payment  of  prior  liens. — Upon 
a  reference  to  compute  the  amount  due  upon  a  bond  and 
mortgage,  the  referee  is  not  limited  by  the  penalty  of  the 
bond.  Where  the  principal  and  interest  exceed  such  penalty, 
the  mortgagee  has  a  lien  upon  the  whole  land  for  the  amount 
of  principal  and  interest  due,  according  to  the  conditions  of 
the  mortgage,  although  such  amount  may  exceed  the  penalty 
of  the  bond.'  The  burden  of  showing  that  the  amount  due 
and  unpaid  on  the  mortgage  under  foreclosure  is  less  than 
the  plaintiff  claims,  is  on  the  defendant.' 

In  computing  the  amount  due  in  a  mortgage  foreclosure, 
the  referee  is  not  obliged  to  set  out  the  several  items 
constituting  the  sum  found  due,  because  they  will  be  covered 
by  the  general  finding,  although  pot  stated  in  detail.  In 
Sidenberg  v.  Ely,*  objection  was  taken  to  the  refusal  of  the 
referee    to    specify    the    several    sums    which   constituted 


practice  as  to  the  method  of  proving  (1824) ;  Lyon  v.  Hall,  1  E.  D.  Smith, 

the  bond  and  mortgage  on  the  refer-  (K  Y.)  250  (1851);  State  v.Wayman, 

ence  in  a  mortgage  foreclosure,  isdis-  2  Gill  &  J.  (Md.)  254  (1830) ;  Harris 

cussed  by  counsel  with  full  citations  v.  Clap,  1  Mass.  308  (1805) ;  s.  c.  2 

in  Knickerbocker  Life  Ins.  Co.  v.  Am.  Dec.  27 ;  Tenant's  Ex'rs  v.  Gray, 

Hill,  16  Abb.  (N.  Y.)  Pr.  N.  S.  321,  5  Munf.  (Va.)  494  (1817) ;   Perit  v. 

823  (1875).  Wallis,  2U.  S.  (2Dall.)252(1796);  bk. 

'  N.  Y.  Supreme  Court  Rule  30.  1  L.  ed.  370.    Contra,  United  States 

»  Mower  v.  Kip,  6  Paige  Ch.  (N.  Y.)  v.  Arnold,  1  Gall  C.  C.  348  (1812) ; 

88  (1836);  s.  c.  29  Am.  Dec.  748.    See  Lonsdale  v.  Church,  2  T.   R.   388 

Griffiths  V.    Hardenbergh,  41  N.  Y.  (1817) ;  Holdipp  v.  Otway,  2  Saund. 

464,  471  (1869)  ;  Lyon  v.   Clark,  8  106  (1670). 

N.  Y.  148,  153  (1853) ;  Smedes  v.  «  Lyon  v.  McDonald,  51  Mich.  436 

Iloughtaling,  3  Cai.  (N. Y.)  49  (1805);  (1883). 

s.  c.  2  Am.    Dec.    250  ;    Moffat  v.  *  90  N.  Y.  257  (1882) ;    s.  c.  43 

Barnes,  3  Cai.  (N.  Y.)  49,  note,  (1803);  Am.  Rep.  163  ;  s.  c.  11  Abb.  (N.  Y.) 

Clark  V.  Bush,  3  Cow.  (N.  Y.)  151  N.  C.  354 


§  451.]  COMPUTING    AMOUNT   DUE,  039 

the  gross  sum  set  out  in  his  findings,  and  the  court  held  that 
such  refusal  was  not  error.  It  was  held  in  this  case,  that 
"  these  items  are  covered  by  the  general  finding,  and  it  was 
not  necessary  to  state  them  specifically :  nor  does  the  request 
made  embrace  facts  material  to  the  issue  and  the  proper 
disposal  of  the  case." 

A  mortgagee  in  possession  before  foreclosure,  who  pur- 
chases or  pays  off  an  outstanding  lien  for  the  purpose  of 
protecting  his  possession,  may  be  allowed  what  he  has  paid 
with  legal  interest  and  no  more.*  And  where  a  mortgagee 
pays  taxes  and  other  prior  claims  to  protect  his  lien,  he  can 
not  be  allowed  more  than  the  statutory  rate  of  interest  on 
such  advances,  as  against  a  junior  incumbrancer  in  a  fore- 
closure proceeding,  though  he  may  have  an  agreement 
with  the  mortgagor  for  interest  at  the  rate  of  ten  per 
centum.' 

It  was  held  in  Barthell  v.  Syverson,'  that  the  cost  of 
repairs  made  upon  the  mortgaged  premises  by  a  mortgagee, 
can  not  be  added  to  the  mortgage  debt.  This  was  a  case 
in  which  the  plaintiff  held  a  mortgage  on  a  flouring  mill, 
"which  was  out  of  repair;  the  plaintiff  took  out  a  defective 
piece  of  machinery  and  replaced  it  with  a  new  piece.  The 
court  held  that  the  plaintiff  could  not  tack  the  amount  paid 
for  such  machinery  to  his  mortgage,  and  have  the  same  made 
a  charge  on  the  real  estate.  The  reason  for  this  is  that  the 
mortgagee  can  not  tack  to  his  mortgage  debts  not  secured 
thereby,  and  require  their  payment.*  A  mortgagee  in 
possession  after  a  sale  on  foreclosure  is  not  entitled  to  com- 
pensation for  repairs  and  improvements.* 

§  451.  Computing  amount  on  building  and  loan  asso- 
ciation mortgage — Fines  and  dues. — Mortgages  to  build- 
ing and  loan  associations  are  governed  by  the  laws  relating 
to  and  governing  mortgages  generally,  but  in  such  mortgages 
there  are  usually  conditions  for  the  payment  of  fines  and 


»  Comstock  V.   Michael,  17  Neb.  ■*  Bacon  v.  Cottrell,  13  Mann.  194 

288  (1885).  (1868). 

*  Butterfield    v.    Hungerford,    68  *  Marshall  t.  Stewart,  80  Ind.  189 

Iowa,  249  (1885).  (1881). 

»  54  Iowa,  160  (1880). 


540        SAVINGS  AND  LOAN  ASSOCIATION  MOETGAGE.  [§451. 

dues  in  accordance  with  the  by-laws  and  regulations  of  the 
associations. 

In  an  early  case  in  New  York,'  it  was  held  that  a  mortgage  to 
a  building  and  loan  association,  in  the  usual  form,  is  a  valid 
security  only  for  the  monthly  payments  stipulated  to  be 
made,  and  not  for  fines  and  other  dues.  It  is  a  well  settled 
rule  of  law  that  penalties  agreed  upon  for  the  breach  of  a 
contract  are  illegal."  And  it  has  been  said,  that  there  is 
nothing  in  the  character  of  building  and  loan  associations  to 
except  them  from  the  doctrine  of  equity,  applicable  to  other 
cases  of  penalty  for  the  non-payment  of  money,  which 
prohibits  the  enforcement  and  collection  of  such  fines  and 
penalties.* 

It  has  been  said  that  a  covenant  to  pay  "all  fines  imposed 
by  the  articles  of  the  association,"  does  not  make  such  arti- 
cles a  part  of  the  mortgage  and  does  not  authorize  the  court 
to  consider  them  in  construing  it ;  because,  in  case  of  a  fore- 
closure and  sale,  the  court  can  not  look  beyond  the  mortgage 
itself  to  ascertain  the  sum  due,  unless  the  rules  and  articles 
of  the  building  and  loan  association  are  made  a  part  of  the 
mortgage,  or  so  referred  to  in  it  as  to  call  the  attention  of 
the  court  to  them.*  But  it  seems  that  where  a  mortgage 
makes  no  mention  of  fines  or  of  any  liability  to  pay  them,  if 
the  mortgagor  has  actually  paid  such  fines,  he  can  not 
recover  them  back ;  and  in  an  action  brought  to  foreclose,  he 
will  not  be  entitled  to  have  them  applied  towards  the  satis- 
faction of  the  mortgage.' 

But  it  was  held  in  the  Juniata  Building  and  Loan 
Association  v.  Mixell,*  that  where  a  married  woman  unites 
with  her  husband  in  executing  a  mortgage  on  her  separate 
property  to  secure  a  loan  for  her  husband,  which  he,  as  a 


*  Hamilton    Building    Assoc,     v.  ■*  Robertson  v.    American  Home- 

Eeynolds,  5  Duer  (N.  Y.)  671  (1856).  stead  Assoc,  10  Md.  397  (1851). 

« Oemulgee     Building     &    Loan  *  Clarksville     Building   &    Loan 

Assoc.    V.    Thomson,    52    Ga.    427  Assoc,  v.  Stephens,  26  N.  J.  Eq.  (11 

(1874).  C.  E.  Gr.)  351  (1875). 

»  Mulloy  V.  Fifth  Ward  Building  «  84  Pa.  St.  313  (1877). 
Assoc,  2  Me.  &  Ar.  (D.  C.)  594,  597 
(1876). 


§  452.]        AM0U1?T   ON   ASSOCIATION   MOETGAGE.  541 

stockholder,  procured  from  a  building  and  loan  association, 
it  is  a  valid  mortgage  on  her  separate  property  under 
,the  married  woman's  act  of  1859,  ^"^  covers  the  pre- 
:miums  due  from  her  husband,  as  such  stockholder,  and 
also  the  fines  incurred  by  reason  of  default  in  the  payment 
of  dues,  although  under  the  act  of  1859  ^  married  woman's 
iinortgage  of  her  separate  estate  to  a  building  and  loan  asso- 
ciation to  secure  the  payment  of  her  own  debt  could  bind 
iher  property  only  to  the  extent  of  the  amount  actually 
'advanced  with  interest.'  It  is  held  in  some  of  the  states  and 
in  England,  however,  where  a  fine  is  imposed  by  a  building 
'and  loan  association,  when  a  borrowing  member  becomes  in 
[arrears  in  the  payment  of  his  dues,  that  such  fine  is  imposed 
las  interest  and  not  by  way  of  penalty,  and  that  the  above 
trule  of  equity  will  not  entitle  the  borrowing  member  to 

relief.' 

i 

§  452.  Allowance  on  reference  of  taxes  and  assess- 
ments paid  by  mortgagee. — Where  the  owner  of  mortgaged 
premises  neglects  or  refuses  to  pay  the  taxes  or  assessments 
imposed  thereon,  which  he  should  pay,*  the  owner  or  the 
holder  of  the  mortgage  may  pay  such  taxes  to  protect  his 
security,*  although  there  may  be  no  clause  in  the  mortgage 


'  "Wolbach  V.  The  Lehigh  Building  interest  to  pay  the  whole  tax  levied 

Assoc.,  84  Pa.  St.  211  (1877).  upon   the  premises,   but    is  bound 

I    •  See  Ocmulgee  Building  &  Loan  to  pay  only  one-half  thereof,  and  in 

(Assoc    V.   Thomson,    52    Ga.    427  case  the  mortgagee  pays  the  whole 

j(1874) ;    Shannon  v.  Howard  Mat.  of  the  tax  in  order  to  preserve  his 

Assoc.  36  Md.  383  (1872) ;  Juniata  lien,  he  will  be  allowed  to  recover 

"Building  &  Loan  Assoc,  v.  Mixell,  only    one-half   of   the    amount    so 

84  Pa.   St.    313  (1877) ;  Parker  v.  paid  from  the  proceeds  of  the  sale 

Butcher,  L.  R.  3  Eq.  762  (1867);  s.  arising  upon  a  foreclosure    of  his 

c  36  L.   J.  Ch.  553 ;  Matterson  v.  mortgage.      "Weed    v.   Hornby,   35 

Eiderfield,  L.    R.   4  Ch.    App.   207  Hun  (N.  Y.)  580  (1885). 
<i869) ;  8.  0.  20  L.  T.  N.  S.  503  ;  33  *  Sidenberg  v.  Ely,  90  K  Y.  257 

J.  P.  326  ;  17  W.  R.  422  ;  Thomp-  (1882) ;    s.    c.   43  Am.    Rep.    163  ; 

son  V.   Hudson,  L.  R.  2  Ch.  App.  Kepley  v.  Jansen,  107  111.  79  (1883) ; 

255  (1867).  Broquet  v.  Sterling,    56  Iowa,  357 

*  The  owner  of  an  undivided  half  (1881) ;  Leitzbach  v.  Jackman,  28 
interest  in  real  estate  is  under  no  Kan.  524  (1882) ;  Walton  v.  Holly- 
obligations  to  one  to  whom  he  wood,  47  Mich.  385  (1882);  Southard 
luts    mortgaged   hia    said    one-half  v.  Dorrington,  10  Neb.  122  (1880). 


542  ALLOWANCE   OF   TAXES    Uf    COMPUTATION.     [§452. 

permitting  him  to  do  so ;'  and  where  a  mortgagee  pays  such 
taxes  and  redeems  the  property  from  a  tax  sale,  he  will  be 
subrogated  to  the  rights  of  the  state  and  will  be  entitled  to 
a  Hen  on  the  mortgaged  premises  for  the  amount  of  the  taxes 
thus  paid,  in  addition  to  the  amount  of  his  mortgage.''  To 
give  the  owner  of  a  mortgage  this  right,  it  is  not  necessary 
for  him  to  wait  until  the  premises  are  sold,  or  offered  for 
sale,  for  such  taxes  and  assessments,  before  paying  the 
same.' 

His  claim,  however,  must  be  enforced  as  a  part  of  the 
mortgage  debt  and  not  by  an  independent  action  against 
the  mortgagor,  as  for  money  paid  to  his  use,  or  under 
a  claim  of  subrogation  to  the  lien  of  the  state  or  muni- 
cipality,* because  money  paid  by  the  holder  of  a  mortgage  to 
redeem  the  premises  from  a  tax  sale  does  not  constitute  a 
lien  apart  from  the  mortgage,  but  will  be  discharged  when 
the  mortgage  is  satisfied  ;  and  whether  the  amount  paid  is 
or  is  not  included  in  the  sum  for  which  the  mortgage  is 
foreclosed,  no  subsequent  or  separate  proceeding  can  be 
maintained  against  the  mortgagor  to  enforce  its  payment.* 

Even  the  owner  of  an  invalid  mortgage  is  entitled  to  a 
lien  upon  the  premises  for  taxes  paid  by  him  upon  the 
same.'  And  where  a  subsequent  mortgage  lien  is  cut  off  by 
the  foreclosure  of  a  prior  mortgage,  if  the  amount  paid  for 
taxes  has  been  added  to  the  latter  incumbrance,  the  lien 
therefor  will  not  be  extinguished  with  the  mortgage.^     On  a 


'  Sidenberg  v.  Ely,  90  N.  T.  257  mortgage    debt,    is    questioned    in 

(1882) ;  8.  c.  43  Am.  Rep.  163.  Barthell  v.  Syverson,  54  Iowa,  160 

»  Sidenberg  v.  Ely,  90  N.  Y.  257  (1880). 

(1882) ;    B.   c.   43    Am.    Rep.    163 ;  »  Sidenberg  v.  Ely,  90  N.  Y.  257 

Faure  v.  Winans,  Hopk.  Cb.  (N.  Y.)  (1882) ;    s.    c.   43    Am.    Rep.    163 ; 

283  (1824) ;  s.  c.   14  Am.  Dec.  545 ;  Williams   v.    Townsend,  31   N.  Y. 

Sharp  V.   Thompson,    100  111.   447  414  (1865)  ;   Eagle  Fire  Ins.  Co.  v. 

(1881) ;  Broquet  v.  Sterling,  56  Iowa,  Pell,  2  £dw.  Ch.  (N.  Y.)  631  (1836). 

357  (1881) ;  Baker  v.  Clark,  52  Mich,  *  Horrigan  v.  Wellmuth,  77  Mo. 

22  (1883);   Walton  v.   Hollywood,  542  (1883);    Young   v.    Brand,    15 

47  Mich.  385  (1882) ;    Horrigan  v.  Neb.  601  (1884). 

Wellmuth,    77    Mo.      542     (1883).  » Vincent  v.  Moore,  51  Mich.  618 

Whether  taxes  paid  by  a  mortgagee  (1883). 

upon  the  property,  in  the  absence  of  *  Aultraan    v.    Jenkins,    19    Neb. 

an  agreement,  can  be  tacked  to  the  209  (1886). 


§  453.]  rNCLUDESTG   TAXES   IN   AMOUNT   DUE.  543 

foreclosure  the  mortgagee  will  not  be  entitled  to  recover 
taxes  paid  on  a  tract  of  land  not  covered  by  the  mortgage ;' 
neither  will  the  mortgagee  or  the  assignee  of  a  mortgage  be 
entitled  to  recover  as  taxes  paid  by  himself  or  his  agent,  sums 
expended  in  purchasing  the  mortgaged  premises  at  a  tax 
sale.*  And  where  a  mortgagee  in  possession  suffers  the 
land  to  be  sold  for  taxes,  he  will  not  be  permitted  to 
recover  on  foreclosure,  the  amount  paid  by  him  to  redeem 
from  such  sale,  but  only  the  actual  amount  of  the  taxes 
with  interest.* 

§  453.  Computing  the  amount  due  on  failure  to  pay 
taxes  and  assessments. — In  computing  the  amount  due, 
where  the  owner  of  the  mortgaged  property  has  failed  to 
pay  taxes,  assessments  or  liens  of  a  like  nature  imposed 
upon  it,  and  the  mortgagee  or  the  assignee  of  the  mortgage 
has  paid  them  in  order  to  protect  his  security,  the  referee 
should  include  the  amount  thus  paid  with  interest,  and 
add  it  to  the  mortgage  debt  in  his  report  as  to  the  amount 
due.* 

If  the  referee  should  find  that  the  mortgage  is  upon  an 
undivided  one-half  interest  in  real  estate,  and  that  the  mort- 
gagee, in  order  to  protect  his  lien,  has  paid  the  tax  or  assess- 
ment levied  against  the  whole  premises,  he  should  allow  the 
mortgagee  only  one-half  of  the  tax  so  paid,  in  computing 


'  Connecticut  Mut.  Life  Ins.  Co.  2  Edw.  Ch.  (N.  Y.)  631,  634  (1834) ; 

V.  Bulte,  45  Mich.  113  (1881).  Faure  v.  Winans,  Hopk.    Cli.   (N. 

1  Crane  v.  Aultman  Taylor  Co.,  Y.)  283  (1824) ;  s.  c.  14  Am.  Dec. 

61  Wis.  110  (1884).  545  ;  Brevoort  v.  Eandolph,  7  How. 

»  Maxfleld  v.  Willey,  46  Mich.  253  (N.   Y.)  Pr.   398    (1853) ;    Burr    v. 

(1881).     See  Williams  v.  Townsend,  Veeder,  3  Wend.  (N.  Y.)  412  (1829>. 

81  N.  Y.  411  (1865) ;  however,  a  con-  See  Williams  v.  Townsend,  31  N.  Y. 

trary  doctrine  was  held  in  Allison  v.  411,  414  (1865) ;  Dale  v.  McEvers,  3 

Armstrong,  28  Minn.  276  (1881) ;  s.  Cow.  (N.  Y.)  118  (1823) ;   Sharp  v. 

C.  41  Am.  Rep.  281.  Thompson,  100  111.  447(1881);  Water- 

»  Moshier  v.  Norton,  100  111.  63  son  v.  Devoe,  18  Kan.   223  (1877) ; 

(1881).  Sharp  v.  Barker,  11  Kan.  381  (1873) ; 

*  Sidenberg  v.  Ely,  90  N.  Y.  257,  Stanclift  v.   Norton,   11   Kan.   218 

263  (1882) ;  s.  c.  43  Am.  Rep.  163 ;  (1873) ;  Leland  v.  Collver,  34  Mich. 

11  Abb.  (N.  Y.)  N.  C.  354 ;  Robin-  418  (1876) ;  Johnson  v.   Payne,  11 

Bon  V.  Ryan,   25  N.   Y.   320,    327  Neb.  269  (1881). 
(1862) ;  Eagle  Fire  Ins.  Co.  v.  Pell. 


544:        iNCLUDiNa  rrfsuKANCE  in  amount  due.   [§  454. 

the  amount  due,  because  the  mortgagor  is  under  no  obliga- 
tions to  the  person  to  whom  he  has  mortgaged  his  interest 
in  such  real  estate,  to  pay  the  whole  of  the  tax  or  assess- 
ment levied  against  the  premises,  but  is  bound  to  pay  only 
one-half  thereof.'  Where  the  referee  finds  that  the  mortgage 
is  upon  a  lease-hold  interest,  and  that  the  mortgagor  has 
covenanted  to  pay  the  rent  charges,  but  has  failed  to  do  so, 
and  that  to  protect  his  interest,  the  mortgagee  has  been 
compelled  to  pay  the  same,  he  should  allow  the  amount  thus 
paid  in  computing  the  amount  due  on  the  mortgage.* 

§  454.  Allowance  of  insurance  premiums  paid  by 
mortgagee. — Where  a  mortgage  contains  a  clause  requiring 
the  mortgagor  to  keep  the  premises  insured  for  the  benefit 
and  protection  of  the  mortgagee,  and  agreeing  that  in  case 
of  his  failure  to  do  so  the  mortgagee  shall  have  the  right  to 
insure  the  same,  all  moneys  paid  by  the  mortgagee  for  insur- 
ance, because  of  the  mortgagor's  failure  to  procure  insurance, 
will  be  a  charge  upon  the  premises  and  collectible  under 
the  mortgage  ;*  and  the  moneys  so  paid  may  be  included 
in  the  amount  of  the  judgment  of  foreclosure,  even  though 
the  insurance  was  taken  for  the  full  term  of  the  mort- 
gage.* But  in  an  action  to  foreclose,  in  the  absence 
of  a  supplemental  complaint,  the  plaintiff  will  not  be  entitled 
to  recover  moneys  paid  for  insurance  premiums  after  the 
commencement  of  the  action.* 

In  the  absence,  however,  of  an  express  agreement  on  the 
part  of  the  mortgagor  to  keep  the  mortgaged  premises 
insured  for  the  benefit  and  protection  of  the  mortgagee,  the 


»Weedv.  Hornby,  35  Hun  (N.Y.)  N.    Y.    320    (1862);   St.    Andrew's 

580  (1885).  Church  v.  Tompkins,  7  Johns.  Ch. 

«  Catlin  V.  Grissler,  57  K  Y.  363  (N.  Y.)  14  (1823) ;   Frost  v.  Beek- 

(1874) ;  Robinson  v.  Ryan,  25  N.  Y.  man,  1  Johns.  Ch.  (N.  Y.)  288  (1814). 

320  (1862).     If  the  stipulation  of  the  »  Neale  v.  Albertson,  39  N.  J.  Eq. 

mortgagor  to  pay  rent  charges  does  (12  Stew.)  384  (1885) ;    Over  by  v. 

not  appear  on  the  face  of  the  mort-  Fayettville  Building  &  Loan  Assoc, 

gage,    the   mortgagee   will  not  be  81  N.  C.  56  (1879). 

entitled  to  enforce  his  rights  under  *  Walton  v.  Hollywood,  47  Mich, 

such   agreement,  as  against  subse-  385  (1882). 

quent   bona  fide   grantees   without  *  Washburn  v.  Wilkinson,  59  Cal. 

notice.    See  Robinson  v.  Ryan,  25  538(1881). 


§  455.] 


POWERS    AND    DUTIES    OF    REFEREE.  545 


premiums  paid  by  him  for  insurance  against  fire  can  not  be 
charged  upon  the  mortgaged  premises ;  and  on  a  reference 
to  compute  the  amount  due  in  such  a  case,  the  referee  can 
not  allow  any  premiums  paid  by  the  mortgagee  for  insur- 
ance.' In  an  early  case'  in  New  York,  it  was  held  that 
"insurance  stands  on  a  different  footing  from  taxes,  as  it 
may  be  effected  by  the  mortgagee  for  his  own  security. 
But  taxes  are  a  legal  charge  upon  the  estate,  not  upon  the 
mortgagee." 

§  455.     Powers  and  duties  of  referees  —  Generally. — 

The  general  powers  and  duties  of  a  referee  appointed  to 
compute  the  amount  due  on  a  mortgage,  to  examine  the 
plaintiff  or  his  agent  as  to  any  payments  made  on  the  mort- 
gage debt,  and  to  take  proof  of  the  facts  and  circumstances 
stated  in  the  complaint  in  a  foreclosure  suit,  not  being  pre- 
scribed by  the  Code  of  Civil  Procedure  nor  provided  for  by 
the  rules  of  practice,  and  being  the  same  powers  as  were 
formerly  possessed  and  exercised  by  a  master  in  chancery,  the 
referee  in  his  proceedings  will  be  governed  by  the  rules  and 
the  former  practice  of  the  court  of  chancery,  as  far  as  they 
are  applicable  under  the  Code.'  It  is  the  duty  of  the  referee 
** to  report  the  proofs  and  examinations  had  before  him,"* 
that  the  court  may  make  such  order  thereon  as  shall  be  just. 
It  will  not  be  sufficient  for  the  referee  simply  to  report  the 
result  of  his  examination  of  the  witnesses,  or  his  own  con- 
clusions from  the  evidence  ;  but  the  proofs,  whether  docu- 
mentary or  oral,  should  be  fully  reported  to  the  court.* 


>  Faure  v.  Wymans,  Hopk.   Ch.  Y.)  Pr.  159  (1847).    Baylies    says, 

(N.  Y.)  383  (1824) ;    s,  c.  14  Am.  however,     that    the     referee   is   no 

Dec.  545.  longer    required  to  report  the  evi- 

•  Faure  v.  Wymans,  Hopk.  Ch.  dence  had  before  him,  and  that 
(N.  Y.)  283  (1824) ;  s.  c.  14  Am.  he  should  simply  state  his  conclu- 
Dec.  545.  sions  of  fact,  and  not  give  the  evi- 

3  Ketchum  v.  Clark,  23  Barb.  (N.  deuce  on  which  such  conclusions  are 

T.)  819  (1856).     See  Palmer  v.  Pal-  based.     See  Baylies'  Tr.   Pr.    319  ; 

mer,  13  How.  (K  Y.)  Pr.  363(1856);  also  N.  Y.  Supreme  Court  Rule  60. 

YanZant  v.  Cobb,  10  How.  (N.  Y.)  =  Wolcott  v.  Weaver,  3  How.  (N. 

Pr.  348(1854) ;  Graves  v.  Blanchard,  Y.)  Pr.  159  (1847). 
i  How.  (N.  Y.)  Pr.  300  (1850). 

♦  Wolcott  V.  Weaver,  3  How.  (N. 


546  HOW  PEEMISES  SHOULD  BE  SOLD.  j^  456. 

It  has  been  said  that  the  referee  should  perform  his  duty 
as  though  he  were  an  examiner ;  and  where,  under  such  an 
order,  a  report  was  made  which  did  not  set  out  a  certificate 
of  acknowledgment  by  the  mortgagor  of  the  execution  of 
the  mortgage,  but  merely  referred  to  the  mortgage  by  a 
brief  statement  of  its  date  and  conditions,  giving  the  names 
of  the  parties  thereto,  with  the  additional  fact  that  it  had 
been  acknowledged  by  the  mortgagor,  the  report  was  held 
defective,  because  it  did  not  contain  such  a  statement  as  was 
required  by  the  statute  to  make  it  evidence  of  the  execution 
of  the  mortgage  by  the  defendant.* 

§  456.    Finding  as  to  how  property  should  be  sold. — 

Under  an  order  of  reference  in  foreclosure  cases,  if  the  whole 
amount  secured  by  the  mortgage  is  not  due,  it  is  the  duty 
of  the  referee  after  computing  the  amount  due  on  the 
mortgage,  to  ascertain  whether  the  mortgaged  premises 
are  so  situated  that  they  can  be  sold  in  parcels,  without 
injury  to  the  interested  parties.'  Should  the  referee  find 
that  the  property  can  not  be  sold  in  parcels,  as  he  is  bound 
to  do  in  cases  where  it  can  not  be  divided  to  advantage, 
such  finding  will  practically  end  his  duties  under  the  order. 
But  should  he  find  that  the  mortgaged  premises  consist  of 
distinct  parcels  of  land,  whose  relative  values  are  entirely 
independent  of  one  another,  he  should  so  report ;  he  should 
also  report  the  order  in  which  they  can  best  be  sold. 
Should  the  premises  consist  of  a  single  tract  of  land,  the 
referee  may,  under  direction  of  the  court,  inquire  whether 
such  tract  can  be  subdivided  and  sold  in  distinct  parcels 
without  impairing  its  aggregate  value,  and  if  so,  in  what 
parcels,  or  whether  the  premises  are  so  situated  that  a  sale 
of  the  whole  in  one  parcel  will  be  most  beneficial  to  the 
parties  interested.  In  other  words,  the  duty  of  the  referee 
under  such  an  order  will  be  to  inquire  and  to  report  how  the 
mortgaged  premises  may  be  sold  so  as  to  realize  the  largest 
sum.* 


*  "Wolcott  V.  "Weaver,  8  How.  (N.         »  Gregory  v.  Campbell.  16  Hotv. 
T.)  Pr.  159  (1847).  (N.  Y.)  Pr.  417  (1858).    The  sale  of 

•  N.  T.  Supreme  Court  Rule  60.      tbie  whole  premises  in   one  parcel 


§  457.]    DISCRETION  AND  AUTHOEITT  OF  EEFEREE.  547 

Where  the  referee  finds  that  the  mortgage  covers  several 
lots  owned  separately  by  different  defendants,  he  should 
report  the  order  in  which  the  sale  should  be  made.' 

§  457.  Conduct  of  reference— Discretion  and  authority 
of  referee— Where  reference  to  be  held.— In  computing 
the  amount  due,  taking  proof  of  the  facts  and  circumstances 
alleged  in  the  complaint,  and  in  examining  the  plaintiff  or  his 
agent  under  oath,  as  to  payments  on  the  mortgage,  in  cases 
of  default,  it  is  within  the  discretion  of  the  referee  to  deter- 
mine how  he  will  conduct  the  proceedings.' 

Upon  an  ordinary  reference  to  compute  the  amount  due 
in  a  mortgage  foreclosure,  if  the  plaintiff  claims  priority, 
and  the  claim  is  denied  by  the  defendant's  answer,  the 
referee  will  have  no  power  or  authority  to  examine  into 
and  to  settle  questions  of  priority  between  the  parties  ;  such 
questions  must  be  left  to  be  passed  upon  by  the  court  upon 
the  trial  of  the  cause.* 

Where  a  reference  to  compute  the  amount  due  is  directed 
in  a  mortgage  foreclosure,  it  is  not  necessary  that  it  be 
executed  in  the  county  in  which  the  venue  of  the  action 
is  placed.*  Thus,  where  an  action  was  commenced  in 
Westchester  county  to  foreclose  a  mortgage,  and  a  reference 
to  compute  the  amount  due  was  made  to  the  clerk  of  the 
court,  who  held  the  reference  in  Kings  county  where  the 
court  was  sitting  at  the  time,  objection  was  made  that  the 
reference  should  have  been  executed  in  Westchester  county 
where  the  action  was  triable,  instead  of  in  Kings  county  where 
the  court  was  sitting.  The  court  held  that,  "  If  the  court 
has  the  power  to  devolve  upon  its  clerk,  or  other  suitable 


can  be  most  beneficial  to  the  parties  Pr.  211,  223  (1859);  s.  c.  9  Abb.  (N. 

only    -when  the  mortgagee  will  re-  T.)  Pr.  150, 157 ;  Palmer  v.  Palmer, 

ceive,  and  the  mortgagor  pay,  from  13  How.    (K   Y.)  Pr.  368   (1856) ; 

the  sale  thereof,  the  largest  amount  McCarten  v.  VanSyckel,  10  Bosw. 

of  the  mortgage  debt,  or  leave  the  (N.  T.)  694  (1868). 

largest  surplus  after  payment  of  the  »  Harris  v.    Fly,  7  Paige  Ch.  (N. 

whole  debt.  Y.)  421  (1839). 

»  Bard  v.  Steele,  3  How.  (N.  T.)  *  Kelly  v.  Searing,  4  Abb.  (N.  Y.) 

Pr.  110  (1847).  Pr.  354,  357  (1857). 

•  Pratt  V.  Stiles,  17  How.  (N.  T.) 


548  KEPORT    OF    KEFEREE.  [§  458, 

person,  the  duty  of  making  this  computation,  in  order  to  pro- 
ceed at  once  to  render  judgment  upon  the  main  application, 
it  can  not  be  required  that  the  clerk,  or  referee,  must  go  to 
another  county,  it  may  be  at  the  extremity  of  the  district, 
to  perform  his  duty.  If  he  must,  the  very  object  of  the 
reference  is  defeated.  Instead  of  expediting,  it  will  delay 
the  proceedings.'" 

§  458.  Report  of  referee. — The  referee,  having  computed 
the  amount  due  and  discharged  the  other  duties  required  in 
the  order  of  reference,  must  make  a  report  thereof  to  the 
court  as  the  basis  for  a  judgment  and  decree  of  sale. 
The  report  of  the  referee  should  show  the  facts  upon  which 
his  conclusions  are  based ;'  it  should  also  contain  the  proofs 
and  examinations  had  before  him,  and  be  accompanied  by 
an  abstract  of  the  documentary  evidence  produced  on  the 
reference.' 

On  a  reference  in  an  action  to  foreclose  a  mortgage,  the 
referee  should  report  upon  all  the  matters  embraced  in 
the  order  of  reference.  Thus,  where  the  defendant  in  a 
foreclosure  alleges  numerous  payments  on  account,  exceed- 
ing the  amount  of  the  debt,  and  sets  up  a  counter-claim 
for  the  balance  due  him,  the  referee  should  state  an  account 
between  the  parties.*  But  the  referee  should  not  report 
matters  not  fully  within  the  issues  referred  to  him.  Thus, 
where  in  an  action  to  foreclose  a  mortgage  the  defendant 
by  counter-claim  sets  up  a  prior  mortgage  and  seeks  to 
have  the  priority  established,  to  which  there  is  filed  a  reply 
of  general  denial  and  payment,  a  special  finding  by  the 
referee  that  the  defendant's  mortgage,  although  it  describes 
the  property  embraced  in  plaintiff's  mortgage,  was  not  so 
intended,  and  a  conclusion  of  law  that  it  is  not  a  prior  lien, 
are  not  within  the  issues  and  are  therefore  irrelevant,  and  an 
exception  thereto  will  be  sustained.* 


'  Kelly  V.  Searing,  4  Abb.  (N.  Y.)  15  Abb.  (N.  Y.)  Pr.  497  (1863).     See 

Pr.  354, 357  (1857).  ante  %  455. 

«  Wolcott  V.  Weaver,  3  How.  (N.  ■*  Killops  v.  Stephens,  66  Wis.  571 

Y.)  Pr.  1.59  (1847).  (1886). 

3  Security  Fire  Ins.  Co.  v.  Martin,  »  Porter  v.  Reid,  81  Ind.  569  (1882). 


§459.]  EEPORT   OF  EEFEKEE.  549 

On  a  reference  to  ascertain  the  facts,  the  report  of  the 
referee,  to  be  sufficient,  must  clearly  report  all  the  facts 
pertinent  to  the  issue.  Thus,  upon  an  issue  as  to  whether 
one  of  the  defendants  had  authority  to  execute  a  note  and 
mortgage  in  the  name  of  another,  as  her  attorney  in  fact,  a 
finding  by  the  referee  that  the  note  and  mortgage  purported 
to  be  executed  in  the  name  of  the  latter  by  the  former  as 
her  attorney  in  fact,  and  that  the  attorney  assumed  to  be 
authorized  to  execute  the  note  and  mortgage,  is  not  a  suffi- 
cient finding  of  fact.' 

On  a  reference  to  compute  the  amount  due  and  to  report 
as  to  the  manner  of  the  sale  of  the  property,  if  the  referee 
should  find  that  a  sale  of  the  whole  of  the  premises  is  neces- 
sary, he  should  also  give  the  reasons  upon  which  his  opinion 
is  founded.  If  he  finds  that  the  property  should  be  sold  in 
parcels,  he  must  then  state  in  his  report  the  relative  situa- 
tion and  value  of  the  several  parcels,  and  what  part  of  the 
premises  should  be  sold  first,  together  with  all  the  facts 
necessary  to  enable  the  court  to  render  such  judgment  as 
will  be  most  beneficial  to  the  parties  in  interest." 

§  459.  Filing  and  confirming  referee's  report — Excep- 
tions thereto — New  hearing. — Upon  the  coming  in  of  the 
report  of  the  referee,  it  must  be  filed  with  the  clerk ;  a  note 
of  the  day  of  filing  should  also  be  entered  in  the  proper 
book  under  the  title  of  the  cause  or  proceeding,  and  notice 
of  the  filing  must  be  given  to  the  attorneys  for  such  of  the 
parties  as  were  entitled  to  notice  of  the  execution  of 
the  reference.*  Such  report  shall  become  absolute  and 
stand  confirmed  in  all  things,  unless  exceptions  thereto  are 
filed  within  eight  days  after  the  service  of  notice  of  filing  the 
same.* 


'  Hibernia  Sav.  &  Loan  Soc.  v.  N.  C.  356  (1878) ;  American  Ex- 
Moore,  68  Cal.  156  (1885).  change  Bk.  v.  Smith,  6  Abb.  (N.  Y.) 

»  Ontario  Bank  v.  Strong,  2  Paige  Pr.  1   (1857).     See  N.  T.  Supreme 

Ch.  (N.  T.)  301  (1830).  Court  Eule  30. 

'  Somers  v.  Milliken,  7  Abb.  (N.  *  N.  Y.  Supreme  Court  Rule  30. 

T.)  Pr.  524  (1858).  See  Chamberiain  See  Kelly  v.  Searing,  4  Abb.  (X.  Y.) 

V.  Dempsey,  36  N.  Y.  144  (1867)  ;  Pr.  354  (1857).  In  the  case  of  Somers 

Morgan  v.  Stevens,  6  Abb.  (N.  Y.)  v.  Millken,  7  Abb.  (N.  Y.)  Pr.  524 


550  CONFIEJIING    EEFEREe's    REPORT.  [§  459. 

If  any  party  is  dissatisfied  with  the  report  of  the  referee 
appointed  to  compute  the  amount  due  in  a  mortgage  fore- 
closure, he  may  file  exceptions  to  the  report,  and  the  court 
may,  on  the  evidence,  overrule  the  computation  of  the 
referee.'  Where  any  of  the  defendants  desire  to  take  excep- 
tions to  the  computation  and  to  the  report  of  the  referee,  they 
should  attend  at  the  time  appointed  for  the  application  for 
judgment,  and  present  their  objections  to  the  court.'  If 
exceptions  are  filed  and  served  within  the  time  required  by 
the  rule,  or  within  such  time  as  the  court  shall  fix,  they 
may  be  brought  to  a  hearing  at  any  special  term  thereafter, 
on  notice  by  any  party  interested  therein.* 

The  report  of  the  referee  appointed  to  compute  the 
amount  due  and  to  take  proofs,  must  be  presented  to 
the  court  at  a  special  term  thereof  for  confirmation.*  Upon 
confirmation  of  the  referee's  report,  his  computation  of  the 
amount  due  becomes  the  act  of  the  court,  as  fully  as  though 
originally  made  by  the  court  itself.* 

Where  the  reference  to  compute  the  amount  due  on  a 
mortgage  has  been  executed,  either  party  may  apply  for  an 
order  directing  a  new  hearing,  upon  proof  by  affidavit  that  an 
error  has  been  committed  to  his  prejudice,  either  upon  the 
hearing  or  in  the  report.  In  a  proper  case  the  application 
may  be  granted    even   after  judgment    has    been   entered. 


(1858),  the  attention  of  the  court  was  waive  tlie  delay  of  eight  days  and 

called  to  the  proper  construction  to  have  the  same  confirmed  at  once  ; 

be  given  to  N.  Y.   Supreme  Court  (4)   that    in    cases    where    no    one 

Rule  32  (now  Rule  30)  in  regard  to  appears  for  the  defendant,  the  report 

filing  reports  of  referees  other  than  may  be  presented  to  the  court  for 

for  the  trial  of  issues.     The  court  the  final  order  of  confirmation  and 

held :    (1)    that    all    such    reports  for  judgment  without  waiting  eight 

must  be  filed,  and  a  note  of  the  day  days.     See  Voorhis's  Code  (9th  ed. 

of  filing  be  made  by  the  clerk  ;  (2)  1867),  861,  862. 
that  in  all  cases  where  any  of  the  '  Crine  v.  White,  1  Month.   Law 

defendants  appear,  so  as  to  be  enti-  Bull  (N.  Y.)  92  (1879). 
tied  to  notice,  such  report  can  not  *  5  Wait  Pr.  215,  216. 

be  confirmed  until  eight  days  after  *  N.  Y.  Supreme  Court  Rule  80. 

service  of  notice  of  the  filing  of  the  *  Swarthout  v.  Curtis,  4  N.  Y.  415 

same  ;  (3)  that  all  the  parties  who  (1850)  ;  s.  c.  5  How.  (N.  Y.)  Pr.  198. 
have  appeared  in  the  cause  or  pro-  *  McGowan  v.  Newman,  4  Abb. 

ceeding,  may  consent  in  writing  to  (N.  Y.)  N.  C.  80  (1878). 


§  460.]    APPLICATION  FOB  DECEEE  OF  SALE.       551 

Where  the  application  is  granted  after  judgment,  the  judg- 
ment may  be  set  aside  either  then  or  after  the  new  hearing.' 

§  460.  Application  for  judgment  —  What  must  be 
shown. — After  the  referee  appointed  to  compute  the  amount 
due  has  made  his  report,  the  plaintiff  is  entitled  to  move  for 
judgment.'  The  motion  for  judgment,  if  the  suit  is  brought 
in  the  supreme  court,  must  be  made  at  a  special  term  thereof, 
held  within  the  judicial  district  in  which  the  action  is 
triable,  or  in  a  county  adjoining  that  in  which  it  is  triable  ; 
except  that  where  it  is  triable  in  the  first  judicial  district, 
the  motion  must  be  made  in  that  district.*  The  application 
for  judgment  in  the  first  judicial  district  may  be  made  to  a 
judge  out  of  court,*  and  the  motion  can  not  be  made  in  the 
first  judicial  district  where  the  action  is  triable  elsewhere.* 

Upon  appointing  a  referee  to  compute  the  amount  due  in 
an  action  for  the  foreclosure  of  a  mortgage,  the  court  can 
not  direct  that,  upon  the  coming  in  of  the  report  of  the 
referee,  the  same  be  confirmed  and  the  plaintiff  have  the  usual 
judgment  of  foreclosure  and  sale  without  further  notice. 
Notice  of  motion  for  judgment  is  indispensable.  In  a  recent 
case'  it  was  held  that,  "No  court  can  be  certain  in  advance 
what  will  be  the  contents  of  a  referee's  report ;  and  to  direct 
that  it  shall  be  confirmed  before  it  is  made,  is  to  go  beyond 
the  competent  exercise  of  judicial  authority.  The  question 
of  the  propriety  of  its  confirmation  can  not  be  intelligently 
determined  until  it  is  laid  before  the  court." 

Upon  an  application  for  judgment  upon  default  in  an 
action  to  foreclose  a  mortgage,  the  plaintiff  must  show,  by 
affidavit  or  otherwise,  whether  any  of  the  defendants  who 
have  not  appeared  are  absentees ;  and  if  any  of  them  are 
absentees,  he  must  produce  the  report  of  the  referee  as  to 
the  proof  of  the  facts  and  circumstances  stated  in  the  com- 
plaint, and  as  to  the  examination  of  the  plaintiff  or  his  agent 


'  See  N.T.  Code  Civ.  Proc.  §  1233.  *  N.  T.  Code  Civ.  Proc.  §  770. 

»  N.  Y.  Supreme  Court  Rule  60,  *  N.  Y.  Code  Civ.  Proc.  §  769. 

See  Citizens'  Savings  Bank  v.  Bauer,  •  Citizens'  Savings  Bank  v.  Bauer, 

14    Civ.    Proc.    Rep.    (N.  Y.)  340  14  Civ.  Proc.  Rep.  (N.  Y.)  340,  343 

(1888).  (1S88). 

« N.  Y.  Code  Civ.  Proc.  §  769. 


552  APPLICATION    FOR    JUDGMENT.  [§  -iOl. 

on  oath  as  to  any  payments  which  have  been  made,  together 
with  the  papers  upon  which  such  order  of  reference  was 
granted,  or  show  that  such  papers  have  been  filed  with  the 
clerk  of  the  court.' 

In  every  case  when  the  plaintiff  moves  for  final  judgment 
of  foreclosure  and  sale,  he  must  show,  by  affidavit,  or  by  the 
certificate  of  the  clerk  of  the  county  in  which  the  mortgaged 
premises  are  situated,  that  a  notice  of  the  pendency  of  the 
action,  in  due  form  of  law  as  required  by  the  rules  and  prac- 
tice of  the  court,  has  been  filed  at  least  twenty  days  before 
such  application  for  judgment,  and  at  or  after  the  time  of 
filing  the  complaint  as  required  by  law.'  And  where  there 
are  infant  defendants,  the  application  should  show  the  time 
of  the  appointment  of  the  guardian  ad  litem,  because  a  judg- 
ment by  default  can  not  be  taken  against  an  infant  defendant, 
until  the  expiration  of  twenty  days  after  the  appointment 
of  his  guardian  ad  litem  ;*  if  such  guardian  has  appeared  or 
pleaded  an  answer,  judgment  may  be  taken  without  waiting 
twenty  days.* 

If  service  of  the  summons  on  any  of  the  defendants  was 
made  by  publication,  the  motion  papers  should  show,  in 
addition  to  the  above  matters,  that  service  of  the  summons 
has  been  completed,  and  that  all  the  requirements  of  the 
statute  in  regard  to  the  publication  of  the  summons  have 
been  fully  complied  with.* 

§  461.  Notice  of  application  for  judgment. — Where  no 
answer  has  been  pleaded  denying  the  material  facts  and 
allegations  of  the  complaint,  the  motion  for  judgment  may  be 
made  upon  due  notice  to  such  of  the  defendants  as  have 
appeared  in  the  action,  without  placing  the  cause  upon  the 
calendar.* 

The  court  by  ordering  a  reference  to  compute  the  amount 
due  in  a  mortgage  foreclosure,  does  not  lose  control  of  the 


>N.  Y.  Supreme  Court  Rule  60.  "  K  Y.  Code  Civ.  Proc.  §1216. 

«  K  Y.  Supreme  Court  Rule  60  ;  See  Kendall  v.  Washburn,  14  How. 

N.  Y.  Code  Civ.  Proc.  §  1631.  (N.  Y.)  Pr.  380  (1857) ;   Hallett  v. 

» N.  Y.  Code  Civ.  Proc.  §  1318.  Rigliters,   13  How.  (N.  Y.)  Pr.  43 

*  Newins  v.  Baird,  19  Hun  (N.Y.)  (1856). 

306  (1879).  «  N.  Y.  Supreme  Court  Rule  60. 


§462.]    NOTICE   OF   APPLICATION   FOB    JUDGMENT.  553 

main  application ;  such  reference  may  be  immediately  pro- 
ceeded  with  and  judgment  rendered  upon  the  report  of 
the  referee,  without  a  new  notice  to  a  defendant  who  has 
appeared  but  has  made  default  in  pleading.' 

In  a  mortgage  foreclosure,  judgment  on  default,  where  a 
reference  has  been  directed  and  a  report  thereon  has  been 
made,  follows  as  a  matter  of  course.  On  application,  the 
court  will  render  such  judgment  as  is  proper,  according 
to  the  proof  submitted.  In  determining  what  the  judgment 
should  be,  the  court  will  not  be  limited  to  the  report  of  the 
referee  as  the  only  evidence  before  it,  but  it  may  also  look  to 
the  pleadings  and  receive  their  allegations  in  its  discretion ; 
it  may  also  consider  any  stipulations,  offers  or  admissions 
of  the  parties  presented  to  it. 

In  the  case  of  Gregory  v.  Campbell,'  the  court  held  that, 
"  nothing  is  referred  to  a  referee  under  these  orders  of  refer- 
ence  except  the  questions  relating  exclusively  to  the  material 
situation  of  the  mortgaged  premises,  and  how  the  same  can 
be    most    advantageously    sold,    having    reference    to    its 
condition,  the  demand  for  such  property,  and  its  relative 
value  and  saleableness  in  the  market  in  the  locality  where  it 
is  situated.      The    report  of  the  referee  is  a  part  of  the 
evidence  before  the  court,  and  upon  which  it  is  called  upon 
to  decide  whether  it  will  or  will  not  be  most  beneficial  to 
the  parties  to  decree  a  sale  of  the  vvhole  premises  in  one 
parcel  in   the  first  instance.     The  court  will  look  to  the 
pleadings  and  will  receive  other  evidence  in  its  discretion, 
and  will  consider   any   stipulations   or   admissions   of   the 
parties,  or  of  other  persons,  presented  to  it  on  the  hearing." 
§  462.    Decree  of  foreclosure  and  sale— Variations  from 
referee's  report.— In  an  action  to  foreclose  a  mortgage  upon 
real  property,  when  the  plaintiff  becomes  entitled  to  final 
judgment,  such  judgment  must  direct  the  sale  of  the  property 
mortgaged,  or,  if  a  part  thereof  will  be  sufficient  to  satisfy 

'  KeUy  V.  Searing,  4  Abb.  (N.  Y.)         » 16  How.   (N.   Y.)  Pr.  417,  419 
Pr.  354  (1857).     See  Citizen's  Sav-      (1858). 
ings  Bank  v.  Bauer,  14  Civ.  Proc. 
Rep.  (N.  Y.)  340  (1888). 


554   VARYING  DECKEE  FROM  REFEREe's  REPORT.  [§  463. 

the  mortgage  debt,  the  expenses  of  the  sale,  and  the  costs 
of  the  action,  then  that  such  part  only  be  sold.  The  judgment 
may  also  direct  the  sale  of  the  mortgaged  premises,  either 
as  an  entirety  or  in  separate  parcels,  as  the  referee  may 
have  reported  to  be  most  advantageous  ;  or  that  one  part  or 
parcel  be  sold  first  and  that  the  remainder  be  left  unsold, 
unless  the  sale  of  such  remainder  shall  be  necessary  to  pay 
the  amount  due,  with  the  costs  and  expenses.*  A  judgment 
in  a  foreclosure,  which  includes  also  the  foreclosure  of  mort- 
gages prior  in  lien  to  the  one  upon  which  the  action  was 
brought,  will  be  irregular  and  may  be  opened  by  the  prior 
mortgagee,  but  the  foreclosure  of  mortgages  subsequent  to 
the  one  sued  upon  will  be  valid  and  binding.* 

Where  in  a  foreclosure  suit  one  judge  settles  and  adjusts 
all  the  rights  of  the  parties  therein,  and  orders  a  reference 
to  compute  the  amount  due,  and,  after  the  report  of  the 
referee  comes  in,  final  judgment  is  rendered  by  a  judge  other 
than  the  one  who  first  tried  the  case  and  settled  the  rights 
of  the  parties,  such  judgment  will  be  as  binding  and  valid 
as  though  rendered  by  the  judge  before  whom  the  case  was 
tried.' 

It  has  been  held  that  where,  in  an  action  brought  to  fore- 
close  a  mortgage,  the  referee's  report  states  the  amount  due 
at  the  commencement  of  the  action  and  also  the  amount 
due  at  the  date  of  his  report,  before  which  latter  date  and 
after  the  commencement  of  the  action  a  payment  of  the 
principal  fell  due  under  the  provisions  of  the  mortgage,  and 
the  judgment  set  forth  the  latter  amount  as  due,  the 
remedy  of  the  defendant  is  by  motion  to  correct  the  judg- 
ment and  to  conform  the  same  to  the  report,  and  not  by  an 
appeal  therefrom.* 

§  463.    Extent  of  relief  granted  by  decree  of  sale.— A 

judgment  on  default  in  a  foreclosure  suit  can  not  be  entered 


»  N.  T.  Code  Civ.  Proc.  §§  1626,  «  Chamberlain  v.  Dempsey,  36  N. 

1636,  1637.  Y.  144  (1867) ;  s.  c.  1  Trans.  App. 

«  McHeynolds  v.  Munns,  2  Keyes  257,  reversing  9  Bosw.  (N.  Y.)  540 ; 

(N.  Y.)  214  (1865).     See  Adams  v.  s.  c.  15  Abb.  (N.  Y.)  Pr.  1. 

McPartlin,  11  Abb.  (N.  Y.)  N.  C.  *  Walbridge  v.  James,  4  Hun  (N. 

869  (1882).  Y.)  793  (1875) ;  aff'd  66  N.  Y.  639. 


§  463.1  TRT^Mf^   OF  DEOBEE   OF  RAT.TC  555 

for  a  larger  amount  than  the  complaint  shows  to  be  due,* 
but  if  an  answer  is  pleaded,  the  court  may  permit  the  plain- 
tiff to  take  any  judgment  consistent  with  the  case  made  by 
the  complaint  and  embraced  within  the  issues.*  A  judgment 
on  default,  which  grants  to  the  plaintiff  relief  not  demanded 
in  the  complaint,  will  be  void  as  unauthorized  ;*  it  is  not 
enough  to  state  the  facts  entitling  the  plaintiff  to  the  relief, 
but  he  must  specifically  demand  it.*  In  a  decree  on  default 
in  a  mortgage  foreclosure  a  judgment  for  deficiency  can  not  be 
rendered,  unless  it  has  been  specially  demanded  in  the  com- 
plaint.* It  has  been  held  that  a  plaintiff  in  a  mortgage 
foreclosure  is  not  entitled,  under  the  Code  of  Civil  Procedure,' 
to  a  contingent  personal  judgment  against  any  of  the 
defendants  before  final  judgment  of  foreclosure,  nor  until 
the  referee  to  sell  has  made  his  final  report.'' 

In  an  action  to  foreclose  a  mortgage,  where  only  a  part  of 
the  sum  secured  is  due  and  payable  at  the  time  of  the  com- 
mencement of  the  action,  the  court  may  make  a  decree  of 
sale  to  recover  not  only  the  sum  due  at  the  time  the  com- 
plaint was  filed,  but  also  such  other  sum  as  may  have  become 
due  at  the  time  of  making  the  decree.*  Thus,  where  a 
mortgage  secures  two  or  more  promissory  notes,  all  of 
which  are  not  due  at  the  time  of  the  commencement  of  the 
action,  the  court  may  include  in  the  judgment  and  decree 


>  Savings  &  Loan  Society  v.  Hor-  (1881),  reversing  s.  c.  22  Hun  (N, 

ton,  63  Cal.  105  (1883) ;  Zwickey  v.  T.)  462  ;   Peck  v.  New  York  «&  N. 

Haney,  63  Wis.  464  (1885).  J.  R.  Co.,  85  N.  T.  246  (1881). 

»  K  T.  Code  Civ.  Proc.  §  1207.  »  Simonson  v.  Blake,  12  Abb.  (N. 

»  Grant  v.  VanDercook,   8  Abb.  T.)  Pr.  331  (1861) ;  8.  c.  20  How. 

(N.  Y.)  Pr.  N.  S.  455  (1869) ;  8.  c.  (N.  Y.)  Pr.  484  ;  Swart  v.  Boughton, 

57  Barb.  (N.  Y.)  165  ;   2  Alb.  L.  J.  35  Hun  (N.  Y.)  281  (1885). 

52 ;  Simonson  v.  Blake,  12  Abb.  (N.  »  §§  1204,  1205,  1206. 

Y.)  Pr.  331  (1861) ;  Bullwinker  v.  '  Cobb  v.  Thornton,  8  How.  (N. 

Ryker,  12    Abb.   (N.   Y.)  Pr.    311  Y.)  Pr.  66  (1852). 

(1861) ;  Swart  v.  Bougbton,  35  Hun  •  Asendorf  v.  Meyer,  8  Daly  (N. 

(N.  Y.)  281  (1885).  Y.)  278    (1879) ;    Johnson    v.   Van 

*  Simonson  v.  Blake,  12  Abb.  (N.  Velsor,   43  Mich.   208  (1880).    See 

Y.)  Pr.  331  (1861) ;   s.  c.  20  How.  Walbridge  v.  James,  66  K  Y.  639 

<N.  Y.)  Pr.  484;  Swart  v.  Boughton,  (1876),  aff'g  4  Hun  (N.  Y.)  793. 
S5  Hun  (N.   Y.)  281   (1885).      See 
Bullard  v.  Sherwood,  85  N.  Y.  253 


0b6  OPENING    DEFAULT   IN    PLEADING.  [§464. 

such  as  fall  due  after  the  commencement  of  the  action  and 
before  the  decree  is  rendered.' 

On  a  bill  to  foreclose  a  mortgage  on  an  undivided  interest 
in  land,  the  court  will  have  no  power  in  its  decree  to  nullify, 
reverse  or  modify  a  decree  of  sale  in  an  action  for  the 
partition  of  the  same  land,  where  no  such  purpose  is  indicated 
in  the  bill,  and  the  parties  to  the  partition  are  not  brought 
before  the  court  for  that  purpose.' 

§  464.  Opening  default — Power  of  court. — There  is  no 
question  but  that  a  court  of  equity  has  power,  in  a  proper 
case,  to  open  a  judgment  taken  by  default,  and  to  allow  an 
answer  to  be  made  if  the  defendant  has  a  meritorious 
defence  ;*  this  may  be  done  either  before  judgment  is  entered 
or  afterwards.* 

Although  equity  is  ever  ready  to  receive  the  excuses  of 
a  mortgagor,  and  to  open  a  foreclosure  where  there  is  any 
good  reason  for  the  default,"  yet  it  has  long  been  the  estab- 
lished practice  in  this  state  not  to  set  aside  a  regular  judg- 
ment entered  upon  default  in  a  foreclosure  suit,  or  in  any 
other  case,  where  the  defendant  has  any  interest  or  induce- 
ment to  delay  the  proceedings,  unless  the  application  is  made 
upon  afifidavits  excusing  failure  to  answer,  accompanied 
by  an  affidavit  of  merits;*  in  such  a  case  the  defendant 
must  either  produce  the  sworn  answer  which  he  proposes  to 
plead,  so  that  the  court  may  see  that  he  has  a  meritorious 
defence  prima  facie,  or  he  must,  in  his  affidavit,  state  the 


»  Bostwick  V.  McEvoy,  62  Cal.  496  *  McGuin  v.  Cace,  2  Hilt.  (N.  Y.) 

(1882) ;  Hanford  v.   Robertson,  47  467  (1859) ;  s.  c.  9  Abb.  (N.  Y.)  Pr. 

Mich.  100(1881).  160;    Bogardus    vi    Livingston,    7 

«  Thompson  v.  Frew,  107  111.  478  Abb.  (N.  Y.)  Pr.  428  (1858) ;   8.  c.  2 

(1883).  Hill  (N.  Y.)  236  ;  Sharpe  v.  Mayor, 

8  Foster  v.  Udell,  2  N.  Y.  Code  etc.,  31  Barb.  (N.  Y.)  578  (1860) ;  s. 

Rep.  30(1849);  Allen  v.  Ackley,  2  K  c.  19  How.  (N.  Y.)  Pr.  193;  Ells- 

Y.  Code  Rep.  21  (1849) ;   Salutat  v.  worth   v.    Campbell,   31   Barb.   (N. 

Downes,  1  N.  Y.   Code  Rep.    120  Y.)  134  (1860). 

(1848) ;   Lynde  v.  Verity,  1   N.  Y.  «  Golden  v.  Fowler,  26   Ga.   451 

Code  Rep.    97    (1848)  ;     Clark    v.  (1858). 

Lyon,    2    Hilt.    (N.    Y.)  91  (1859);  «  Powers  v.  Trenor,  3  Hun  (KY.) 

Ramsey  v.  Gould,  4  Lans.  (N.  Y.)  3  (1874) ;  Hunt  v.    Wallis,  6  Paige 

476  (1871).  Ch.  (N.  Y.)  371,  377  (1837). 


§  465.]  PEOCEEDLNGS    ON   TRIAL    OF   ISSUE.  557 

nature  of  his  defence  and  his  belief  in  the  truth  of  the  mat- 
ters stated  therein,  so  far  at  least  as  to  enable  the  court  to 
see  that  injustice  would  probably  be  done,  if  the  judgment 
entered  upon  default  were  permitted  to  stand  ;'  and  this  early 
established  rule  of  practice,  not  being  inconsistent  with  any 
of  the  provisions  of  the  Code  of  Civil  Procedure,  still  con- 
tinues in  force.' 

§  465.  Proceedings  on  trial  after  issue  joined — Gen- 
eral rules. — The  trial  of  an  action  to  foreclose  a  mortgage 
is  conducted  substantially  the  same  as  that  of  other  actions 
tried  by  a  court  or  a  referee  down  to  the  entry  of  judg- 
ment.* Unless  a  reference  is  directed  in  a  foreclosure  suit, 
it  can  be  tried  only  at  a  special  term  of  the  court  held  in  the 
county  in  which  the  mortgaged  premises  are  situated.*  The 
provisions  of  the  Code,'  authorizing  the  adjournment  of  a 
special  term  of  the  court  to  the  chambers  of  any  justice  of  the 
court  residing  in  the  district,  and  an  adjournment  from  time 
to  time  as  the  justice  holding  the  same  shall  order  and  direct, 
does  not  authorize  the  transfer  of  the  trial  of  a  local  action  to 
another  county,  but  was  intended  simply  to  facilitate  the 
transaction  of  such  business  as  might  have  been  done  in 
the  county  to  which  the  term  was  adjourned.'  Thus,  where 
the  trial  of  an  action  for  the  foreclosure  of  a  mortgage  upon 
real  estate  situated  in  the  county  of  Westchester  was 
adjourned  by  the  judge  holding  the  special  term,  to  his 
chambers  in  Brooklyn,  in  the  county  of  Kings,  where  he 
proceeded  to  try  the  action  at  the  adjourned  term  in 
Brooklyn  against  the  objection  of  the  defendant,  the  appellate 
court  held  that  this  was  error.* 


»  Goodhue  V.  Churchman,  1  Barb.  v.   Hatfield,   43  N.  Y.    224  (1870); 

Ch.  (N.  Y.)  596  (1846) ;  Winship  v.  N.  Y.  Code  Civ.  Proc.  §  983.     Sea 

Jewett,   1   Barb.    Ch.    (X.    Y.)   173  Marsh  v.  Lowry,  26Barb.  (N.  Y.)197 

(1845) ;    Powers  v.   Trenor,  3  Hun  (1857) ;  I^Iiller  v.  Hull,  8  How.  (N. 

(N.  Y.)  3  (1874) ;  Hunt  v.  Wallis,  6  Y.)  Pr.  325  (1848). 

Paige  Ch.  (N.  Y.)  371,  377  (1887).  «  N.  Y.  Code  Civ.  Proc.  §  239. 

'  N.  Y.  Supreme  Ct.  Rules  28,  85.  «  Gould  v.  Bennett,  59  N.  Y.  124 

»  Baylies'  Tr.  Pr.  341.  (1874). 

*  Gould  V.  Bennett,  59  X.  Y.  124  '  Gould  v.  Bennett,  59  N.  Y.  124 

(1874);    Bii-mingham  Iron  Foundry  (1874). 


558  PEOCEEDLNGS    ON   TRIAL JURY.  [§  465. 

In  this  case  the  counsel  for  the  plaintiff  insisted  that  the 
error  in  adjourning  the  trial  to  the  judge's  chambers,  was 
obviated  by  the  fact  that  the  judge,  after  partly  trying  the 
case  in  Brooklyn,  by  taking  a  part  of  the  testimony,  adjourned 
the  further  proceedings  in  the  trial  to  a  special  term,  there- 
after to  be  held  in  the  county  of  Westchester,  at  which 
special  term  further  testimony  was  taken  and  the  judgment 
given.  The  court  say :  "  This,  so  far  from  obviating  the  error, 
unless  consented  to,  was  an  additional  error.  The  court  has  no 
more  authority  to  require  parties,  without  their  consent,  to 
go  with  their  witnesses  from  county  to  county,  partially 
trying  the  case  in  each,  in  cases  triable  by  the  court  without 
a  jury,  than  it  has,  in  cases  triable  by  jury,  to  require  the 
jurors  to  attend  out  of  their  county." 

Where  there  is  an  issue,  either  of  law  or  of  fact,  it  must  be 
disposed  of  before  the  plaintiff  can  proceed  with  the  cause.  If 
the  defendant,  having  answered,  fails  to  appear  at  the  trial,  an 
inquest  must  be  taken  by  the  court,  or  the  whole  issue  must 
be  referred.'  But  failure  to  appear  at  the  trial  can  not  be 
treated  as  equivalent  to  a  failure  to  answer,  or  the  same 
as  a  case  in  which  a  general  answer  is  interposed  by  the 
guardian  ad  litem  of  an  infant  defendant." 

Where  an  action  to  foreclose  a  mortgage  is  tried  by  a 
court,  and  all  the  rights  of  the  parties  are  adjudicated 
and  settled,  the  court,  instead  of  making  the  necessary  com- 
putation to  ascertain  the  amount  due  to  the  plaintiff,  may 
order  a  reference  for  that  purpose,  and  may  also  direct  the 
referee  to  ascertain  the  amount  due  upon  any  mortgages 
set  up  in  the  answer  and  also  to  ascertain  and  report  whether 
there  are  any  prior  liens  by  mortgage  upon  the  premises, 
and  if  so,  whether  they  are  yet  due.' 

Where  an  issue  has  been  joined  as  to  all  the  defendants 
in  an  action  to  foreclose  a  mortgage,  the  action  must  be 
brought  on  for  trial  in  the  usual  manner,  and  be  heard  and 
determined  the  same  as  other  actions  in  equity. 


>  Baylies'  Tr.  Pr.  341.  »  Chamberlain  v.  Dempsey,  36  N. 

'Exchange     Fire     Ins.    Co.  v.      T.   144  (1867);    Baylies'   Tr.  Pr. 

Early,  4  Abb.   (N.  T.)  N    C.  78      342. 
(1878). 


§  466.]  PEOCEEDINGS   AFTER   ISSUE   JOINED.  559 

§466.  Proceedings  after  issue  joined  —  Where  part 
only  of  the  defendants  have  answered. —  Where  only  a 
part  of  the  defendants  have  answered,  the  trial  must  be  by 
the  court  without  a  jury,  unless  a  reference  is  ordered  or  a 
trial  by  jury  specially  directed,  because  issues  of  fact  in 
mortgage  foreclosures  are  not  triable  by  a  jury  as  a  matter  of 
right.*  But  where  a  mortgagee  brings  an  action  against  the 
grantees  of  a  mortgagor  to  recover  the  deficiency  arising 
on  the  foreclosure  of  a  mortgage,  which  they  had  by  their 
deed  covenanted  and  agreed  to  pay  as  part  of  the  purchase 
price  of  the  land,  the  action  is  one  at  law  and  is  triable  by  a 

jury-' 

In  such  a  case,  when  the  plaintiff  notices  the  cause  for 
trial,  he  should  also  give  notice  to  all  defendants  who  have 
appeared  but  who  have  not  pleaded  an  answer,  that  he  will 
apply  at  the  same  time  for  the  relief  demanded  against  them. 
He  may  then  proceed  to  a  trial  of  the  issues  raised  by  the 
pleas  of  those  defendants  who  have  answered,  and  he  may 
at  the  same  time  produce  the  proofs  necessary  to  entitle  him 
to  recover  against  the  non-answering  defendants.  If,  on 
such  trial,  the  plaintiff  proves  the  material  facts  stated  in  the 
complaint,  and  is  examined  upon  oath  as  to  the  payments 
which  have  been  made,  the  court  may  render  final  judgment 
without  ordering  a  reference  as  against  the  non-answering 
defendants. 

Where  the  answer  of  any  defendant  presents  a  defence  to 
the  plaintiff's  claim,  or  any  part  of  it,  and  no  demurrer  is 
interposed  and  no  motion  is  made  to  strike  it  out  as  irrele- 
vant, or  for  judgment  upon  it  as  frivolous,  the  proper 
practice  is  to  have  the  case  placed  on  the  calendar  for  trial, 
and  upon  the  hearing  to  obtain  a  decision  on  the  issues  pre- 
sented.* He  should  then  apply  to  the  court  for  an  order  refer- 
ring the  cause  to  some  suitable  person  to  compute  the  amount 


>  Baylies'  Tr.  Pr.  341.    See  N.  T.  T.  Supr.  Ct.  (1  J.  &  S.)  203  (1871)  -, 

CJode  Civ.  Proc.  §§  968,  969.  Baylies'  Tr.  Pr.  342.     The  proceed- 

'  Hand  v.  Kennedy,  83  N.  T.  149  ings  provided  for  by  N.  Y.  Supreme 

(1880),   aff'g  8.  0.  45  N.  T.  Supr.  Court  Rule  60,  do  not  apply  to  sueli 

Ct  (13  J.  «&  S.)  385.  an  answer. 

*  Sti^vesant  v.  Browning,  S3  N. 


660  PROCEEDINGS    AiTEK    ISSUE    JOINED.  [§466. 

due  to  the  plaintiff  and  to  such  of  the  defendants  as  are  prior 
incumbrancers,  and,  if  the  whole  amount  of  the  debt  secured 
by  the  mortgage  has  not  yet  become  due,  to  examine  and 
report  whether  the  mortgaged  premises  can  be  sold  in 
parcels.*  The  reference  in  such  cases  is  made  for  the  infor- 
mation and  convenience  of  the  court,  and  without  regard  to 
the  question  whether  any  party  has  made  default,  or  whether 
any  of  the  defendants  are  infants  or  absentees." 

Where  a  verdict  is  rendered  in  his  favor  on  the  trial  of  the 
issues  by  a  jury,  or  on  the  coming  in  of  the  referee's  report, 
where  the  trial  of  the  cause  has  been  referred,  the  plaintiff 
may  move  for  the  usual  order  of  reference  as  to  the  defen- 
dants who  have  not  appeared,  or  who  have  not  answered.' 
The  plaintiff  may  expedite  matters  by  having  this  reference 
made  to  the  referee  having  charge  of  the  issues  of  fact,  so 
that  one  report  may  embrace  both  matters.  In  such  a  case 
the  referee  will  be  clothed  with  the  double  power  of  decid- 
ing the  issues  of  fact,  in  which  his  decision  will  stand  as  the 
decision  of  the  court,  and  of  reporting  the  amount  due  and 
the  other  facts  required  by  the  rule  ;*  upon  the  confirmation 
of  the  report  and  the  motion  for  judgment,  the  court  will 
still  have  to  pass  upon  the  questions  of  fact  and  the  conclu- 
sions of  law,  as  well  as  upon  the  proofs  upon  which  the 
conclusions  are  founded.*  It  will  be  irregular  to  combine 
in  one  reference  both  the  trial  of  the  issues  and  the  inquiry 
as  to  the  facts  and  circumstances  stated  in  the  complaint, 
and  to  enter  a  judgment  as  of  course  upon  the  report, 
without  application  to  the  court  for  judgment  against  the 
non-answering  or  absentee  defendants.* 

Upon  the  coming  in  and  the  confirmation  of  the  report  of 
the  referee  appointed  for  that  purpose,  the  court  may 
direct  the  entry  of  the  usual  judgment  of  foreclosure  and 
sale.* 


>  Baylies'  Tr.  Pr.  341.  •  Cram  v    Bradford    4  Abb.  (N. 

«  Baylies'  Tr.  Pr.  342.  T.)  Pr.    193    (1857).     See   Citizens' 

*  Hill  V.  McReynolds,  30  Barb.  (N.  Savings    Bank    v.    Bauer,  14  Civ. 
Y.)  488  (1859).  Proc.  Rep.  (N.  Y.)  340,  343  (1888). 

*  N.  Y.  Supreme  Court  Rule  60.  '  Chamberlain  v.  Dempsey,  36  N. 
»  2  VauSant.  Pr.  98  ;  Baylies'  Tr.  Y.  144  (1867) ;  Baylies'  Tr.  Pr.  342. 

Pr.  342. 


§§467-4:68.]  PROCEEDINGS  ON  TRIAL mTANTS.  561 

§  467.  Proceedings  after  default  or  issue  joined— 
Where  some  of  the  defendants  are  infants  or  absentees. 
— Where  no  proof  of  the  material  allegations  in  the  com- 
plaint is  made,  because  the  issues  involved  do  not  require  it, 
and  there  are  infant  or  absentee  defendants,  a  reference  will 
be  necessary  to  take  proof  of  the  facts  and  circumstances 
stated  in  the  complaint.'  The  decision  in  such  a  case  is 
merely  interlocutory,  determining  only  the  issues  involved 
and  directing  a  reference.  The  same  facts  must  be  shown 
on  the  reference  in  such  cases,  as  where  there  is  a  default." 

If  the  defendant  is  an  infant  and  has  put  in  a  general 
answer  by  his  guardian,  or  if  any  of  the  defendants  are 
absentees,  the  order  of  reference  must  also  direct  the  referee 
to  take  proof  of  the  facts  and  circumstances  stated  in  the 
complaint,  and  to  examine  the  plaintiff  or  his  agent  on  oath 
as  to  any  payments  which  have  been  made,  and  to  compute 
the  amount  due  on  the  mortgage  preparatory  to  application 
for  judgment  of  foreclosure  and  sale.  After  the  referee  has 
filed  his  report,  the  plaintiff  will  be  in  a  position  to  apply  for 
final  judgment  of  foreclosure  and  sale.* 

§  468.  Proceedings  where  the  bill  is  confessed. — Where 
the  bill  is  taken  as  confessed  against  all  the  defendants,  or 
where  no  answer  has  been  pleaded  by  any  of  them  denying 
the  material  allegations  of  the  complaint,  the  plaintiff  may, 
when  the  cause  is  in  readiness  for  a  hearing  as  to  all  the 
defendants,  apply  for  a  final  decree  of  foreclosure  and  sale  on 
any  regular  motion  day,  either  in  vacation  or  during  a  regular 
term  of  the  court,  upon  giving  due  notice  to  such  of  the 
defendants  as  have  appeared  in  the  suit.  He  need  not  have 
the  case  placed  on  the  calendar.*  This  rule  applies  only  to 
cases  where  the  bill  is  taken  as  confessed,  and  does  not 
authorize  the  complainant  to  apply  for  a  decree  on  a 
motion  day,  where  a  plea  or  a  demurrer  to  the  bill  has 
been  filed  in  good  faith.* 


*  New  York  Supreme  Court  Rule  Y.)  Pr.  193  (1857) ;  Hill  v.  McRey- 

€0.  nolds,  30  Barb.  (N.  Y.)  488  (1859) ; 

»  1  Crary  Pr.  801 ;  5  Wait  Pr.  217.  N.  Y.  Supreme  Court  Rule  60. 

See  ante  §§  447,  449.  ••  N.  Y.  Supreme  Court  Rule  60  > 

» Cram  v.  Bradford,  4  Abb.  (N.  2  Barb.  Ch.  Pr.  182. 

(36) 


562  PEOCEEDINGS    WHERE   BILL    COIfFESSED.       [§  468." 

Where  the  defendant  puts  in  a  frivolous  plea  or  demurrer, 
however,  the  complainant  may,  on  a  motion  day,  apply  to 
have  such  plea  or  demurrer  stricken  out  as  frivolous,  and  for 
a  final  decree  in  the  cause  as  upon  default.  To  entitle  him 
to  this  relief  the  complainant  must  give  special  notice  to  the 
defendants,  that  he  intends  to  move'for  an  order  to  strike  out 
the  plea  or  demurrer  as  frivolous  and  to  take  the  bill  as  con- 
fessed and  for  a  final  decree  thereon.*  Where  a  bill  is  taken 
as  confessed  against  any  of  the  defendants,  the  complainant, 
at  the  hearing  or  when  he  moves  for  final  decree,  must  show 
by  affidavit  or  otherwise  whether  it  is  so  taken  against 
any  of  the  defendants  as  absentees,  and  where  it  is,  the 
complainant  must  produce  the  referee's  report  as  to  the  proof 
of  the  facts  and  circumstances  stated  in  the  complaint, 
and  as  to  the  examination  of  the  complainant  or  his  agent 
on  oath  as  to  any  payments  which  have  been  made.*  But 
where  the  record  in  the  case  shows  that  personal  service  of 
process  has  been  made  upon  each  of  the  defendants,  an 
affidavit  showing  that  none  of  them  are  absentees  will  not 
be  required.* 


»  Bowman  v.  Marshall,  9  Paige         »  2  Barb.  Ch.  183. 
Ch.  (N.  Y.)  78  (1841).  «  Manning  v.  McCIurg,   14  TVia. 

"Bowman  v.   Marshall,  9  Paige      350(1861). 
Ch.  (N.  Y.)78(1841). 


CHAPTER   XXII. 


SALE  OF  MORTGAGED  PRESSES. 

OBCREB  OP  SALB-OPPICBR  MAKING  SALE-NOTICE  OF  SALE-TIME  OP 
SALE— PLACE  OF  SALE— TERMS  OF  SALE-STAY  OF  SALE. 

Contents  of  notice  of  sale. 
Publication  of  notice  of  sale. 

When  sale  may  be  made — 
Hour  of  day. 

Sale  to  be  made  at  time  ad- 
vertised— Place  of  sale. 

Terms  and  conditions  of  sale. 

Conditions  of  sale  sometimes 
published. 
482.  Sale  on  credit. 

Order  staying  sale. 

§  469.  Decree  of  sale— Generally. — The  plaintiff  having^ 
duly  procured  the  judgment  of  foreclosure  and  sale,  and 
entered  the  same,  is  entitled  to  proceed  to  have  the  mort- 
gaged premises  sold  for  the  payment  of  his  debt.  A  sale 
under  such  decree  is,  in  contemplation  of  the  law,  the  act  of 
the  court,  although  it  may  be  made  through  the  instrumen- 
tality of  some  officer  designated  by  statute,  or  appointed  by 
the  court.  When  the  sale  is  confirmed,  it  becomes  the 
act  of  the  court,  or,  in  other  words,  is  a  judicial  sale ;  but 
until  such  confirmation  there  is  no  judicial  sale,  and  no 
title   passes   to   the  purchaser.'     In    New   York,    however, 


469. 

Decree  of  sale — Generally. 

§  476. 

470. 

Form  and  contents  of  decree 

477. 

of  sale. 

478. 

471. 

By  what  officer  sale  to  be  made 

— Employing  auctioneer  or 

479. 

deputy. 

472. 

Sale  in  New  York  City— By 

480. 

whom. 

481. 

473. 

Duties  of  officer  making  sale. 

474. 

Discretion  of  the  officer— Sell- 

482. 

ing  in  parcels. 

483. 

475. 

Notice  of  sale. 

» Thorn  v.  Ingram,  25  Ark.  53 
(1867);  Southern  Bank  v.  Humph- 
reys, 47  m.  227^,(1868);  Bozza 
V.  Rowe,  30  III.  198J(1863);  Penn 
V.  Heisey,  19  111.  297  (1857) ;  s.  c. 
68  Am.  Dec.  597 ;  Ayers  v.  Baum- 
garten,  15  111.  444  (1854) ;  Young  v. 
Keough,  11  111.  642(1850);  Formanv. 
Hunt,  3  Dana  (Ky.)  614,  621  (1835) ; 
Hurt  V.  Stull,  4  Md.  Ch.  Dec.  391 


(1851) ;  Harrison  v.  Harrison,  1  Md. 
Ch.  Dec.  331  (1848) ;  Sewall  v.  Cos- 
tigan,  1  Md.  Ch.  Dec.  208  (1848); 
Andrews  v.  Scotton,  2  Bland.  Ch. 
(Md.)  629  (1835) ;  Mullikia  v.  Mulli- 
kin,  1  Bland.  Ch.  (Md.)  538  (1834) ; 
Iglehart  v.  Arminger,  1  Bland.  Ch. 
(Md.)  527  (1824) ;  Wagner  v.  Cohen, 
6  Gill  (Md. )  97  (1847);  Mason 
V.    Osgood,   64  N.   C.  467   (l»ruj; 


fi63 


564  DECREE   OF    SALE GENERALLY.  [§  469. 

confirmation  of  the  referee's  report  of  sale  is  not  necessary 
to  pass  title.' 

The  sale  may  be  made  by  a  master  in  chancery,  a  referee, 
trustee,  commissioner  or  sheriff;  and  in  the  federal  courts 
it  is  usually  made  by  a  United  States  marshal,  or  by  a 
referee  specially  appointed  for  that  purpose."  Whatever 
name  may  be  given  to  the  officer  who  makes  the  sale,  he 
acts  as  the  agent  of  the  court,  and  must  report  his  proceed- 
ings in  the  execution  of  its  decrees.  And  it  has  been  said 
that  the  sheriff,  or  other  officer  to  whom  the  decree  of  sale 
is  committed,  may  conduct  the  sale,  though  his  term  of  office 
will  expire  before  the  sale  can  be  completed.' 

In  this  respect  a  sale  under  a  mortgage  foreclosure  is  different 
from  an  ordinary  sheriff's  sale  on  execution.  The  latter  is  a 
ministerial  act  in  which  the  officer,  and  not  the  court,  is 
regarded  as  the  vendor ;  and  when  such  a  sale  is  made  in 
conformity  with  law,  it  is  valid  and  passes  title  to  the 
purchaser.*  But  on  a  sale  of  mortgaged  premises  by  a 
referee,  all  the  proceedings,  from  the  order  appointing 
the  referee  up  to  the  final  confirmation  of  his  report  of 
sale,  including  the  passing  of  title  to  the  vendee,  and  the 
distribution  of  the  proceeds  of  the  sale  to  the  persons 
entitled  thereto,  are  under  the  direction  and  control  of  the 
court ;  and  the  court  can  stay  the  sale,  or  confirm  or  reject 
the  referee's  report,  as  law  and  justice  may  require.* 


Vendaver  v.  Baker,  13  Pa.  St.  131,  Railroad  Co.,  70  U.  S.  (3  Wall.)  196, 

126  (1850) ;  Moore  v.  Shultz,  13  Pa.  205  (1865) ;  bk.  18  L.  ed.  43. 

St.   103  (1850) ;  8.  c.  53  Am.  Dec.  » Union    Dime    Savings    Inst.   v. 

446 ;  Yerby  V.  Hill,  16  Tex.  377,  381  Andariese,    19    Hun  (N.    Y. )   310 

(1856);  Griffith  v.  Fowler.  18  Vt.  394  (1879) ;  Cord  v.  Hirsch,  17  Wis.  403 

(1846);  Blossom  V.  Railroad  Co.,  70  (1863). 

U.  S.  (3  Wall.)  207  (1865) ;  bk.  18  L.  *  Harrison  v.  Harrison,  1  Md.  Ch. 

ed.  47 ;  Minnesota  R.  R.  Co.  v.  St.  Dec.    335    (1848) ;    Williamson    v. 

Paul  Co.,   69  U.  S.  (2  Wall.)  609  Berry,  49  U.  S.  (8  How.)  495,  546 

(1864) ;  bk.  17  L.  ed.  886 ;  William-  (1850)  ;  bk.  13  L.  ed.  1170,  1191. 

son  V.  Berry,  49  U.  S.  (8  How.)  547  *  Sessions  v.  Peay,  23  Ark.  39,  41 

(1850);  bk.  13  L.  ed.  1170,  1192.  (1861).     See  Penn's  Adm'r  v.  ToUe- 

'  See  post  I  525.  son,  20  Ark.  652  (1859) ;  Robertson 

'  Heyer  v.  Deaves,  2  Johns.  Ch.  v.  Haun,    Freem.   Ch.   (Miss.)    270 

(N.  Y.)  154  (1816)  ;  Mayer  v.  Wick,  (1839) ;  Tooley  v.  Kane,  1  Smed.  & 

15  Ohio  St.  548  (1864) ;  Blossom  v.  M.    Ch.    (Miss.)    518,    522    (1843) ; 


§§  470-471.]  CONTENTS  OF  DECREE  OF  SALE.  565 

§  470.    Form  and  contents  of  decree  of  sale.— Under 
the  New  York  practice,  in  mortgage  foreclosures,  the  decree 
for  the  sale   of  the   mortgaged  premises   must  contain  a 
description  of  the  property  to  be  sold,  with  its  particular 
boundaries,  so  far  as   the  same   can   be  ascertained   from 
the  mortgage ;  and  unless  otherwise  specially  ordered  by  the 
court,  the  judgment  should  direct  that  the  mortgaged  prem.- 
ises,  or  so  much  thereof  as  may  be  sufficient  to  discharge  the 
mortgage  debt,  the  expenses  of  the  sale,  and  the  costs  of 
the  action,  as  provided  by  the  Code,  be  sold  by  and  under  the 
direction  of  the  sheriff,  or  a  referee  appointed  by  the  court  ;* 
that  the  plaintiff  or  any  other  party  may  become  the  pur- 
chaser at  such  sale ;  that  the  sheriff  or  referee  appointed  to 
make  the  sale,  execute  to  the  purchaser  a  deed  of  the  prem- 
ises sold ;  that  out  of  the  proceeds  of  the  sale,  unless  other- 
wise  directed,   he   pay    all    taxes,  assessments    and   water 
rates,  which  are  liens  upon  the  property  sold,  and  redeem 
the  property  sold  from  any  sales  for  unpaid  taxes,  assess- 
ments  or  water  rates  which  have   not   apparently  become 
absolute  as  prescribed  by  the  Code  ;*  and  that  he  also  pay 
to  the  plaintiff  or  to  his  attorney  the  amount  of  his  debt, 
interest  and  costs,  or  so  much  thereof  as  the  purchase  money 
will  pay,  and  that  the  purchaser  at  such  sale  be  let  into  pos- 
session of  the  premises  on  production  of  the  referee's  deed.* 

§  471.  By  what  officer  sale  to  be  made— Employing 
auctioneer  or  deputy. — The  sale  must  be  made  by  the 
sheriff  of  the  county  in  which  the  mortgaged  premises  are 
situated,  or  by  some  person  designated  by  the  court  for  that 
purpose ;  and  if  not  so  made,  the  sale  will  be  irregular.     It 


Deaderick    v.     Smith,    6   Humph.  person  selected  by  the  court  should 

(Temi.)  146  (1845).  cry  the  sale  in  person ;  it  will  be 

•  N.  Y.  Code  Civ.  Proc.  §§  1626,  sufficient  if  made  by  an  auctioneer 

1676.    The  sale  must  also  be  made  or  some  person  employed  for  that 

under  the  directions  of  the  sheriff  of  purpose  by  such  sheriff,  or  referee, 

the  county  in  which  the  premises  are  in    his    presence    and    under    his 

situated,  or  of  a  person  selected  by  direction.   Heyer  v.  Deaves,  2  Johns, 

the  court  for  that  purpose,  according  Ch.  (N.  Y.)  154  (1816).    Seepost%i7i. 
to  the  judgment.   It  is  not,  however,  ^  N.  Y.  Code  Civ.  Proc.  §  1676. 

necessary  that  the  sheriff  or  other  *  N.  Y.  Supreme  Court  Rule  61. 


566  OFFICER    MAKING    SALE — AUCTIONEER.        [§  471. 

has  been  said  that  the  death  of  the  plaintiff,  after  a  regular 
decree  of  sale  has  been  entered  in  a  mortgage  foreclosure, 
will  not  affect  the  power  of  the  sheriff  or  referee  to  proceed 
with  the  sale  of  the  premises,  in  pursuance  of  the  decree 
or  judgment,  and  to  execute  a  deed  to  the  purchaser;  it 
will  not  be  necessary  to  revive  the  action  and  to  bring  in  the 
representatives  of  the  deceased  plaintiff  as  parties.' 

Under  the  former  chancery  practice  in  New  York,  every 
sale  of  mortgaged  premises  under  a  decree  of  foreclosure  was 
required  to  be  made  by  a  master  in  chancery,  or  by  some 
one  selected  by  him  in  his  presence  and  under  his  immediate 
direction.  The  constitution  of  1846  abolished  the  office  of 
master  in  chancery,  and  the  Judiciary  Act"  of  the  following 
year  provided  that  any  matter  before  referred  to  a  clerk, 
master  or  referee,  might  be  referred  to  a  clerk,  county  judge 
or  other  suitable  person  or  persons,  with  the  same  powers 
formerly  possessed  by  masters  in  chancery. 

Under  these  provisions  it  was  customary,  when  any  con- 
troversy arose  or  was  likely  to  arise  between  the  parties,  as 
to  the  order  in  which  different  portions  of  the  premises 
should  be  sold,  to  appoint  a  referee  to  make  the  sale,  instead 
of  the  sheriff.'  A  sale  and  a  conveyance  of  the  real  estate 
by  such  referee  was  governed  by  §  TJ  of  the  Judiciary  Act 
until  the  year  185  i,  when,  for  the  purpose  of  obviating  any 
questions  which  might  arise  concerning  the  power  of  a 
referee  to  sell,*  §  287  of  the  New  York  Code  of  Procedure*" 
was  adopted,  providing  that  where  real  property  was  decreed 
to  be  sold,  it  must  be  sold  in  the  county  where  it  is  situated 
by  the  sheriff  of  that  county,  or  by  a  referee  appointed  by 
the  court  specially  for  the  purpose  of  making  the  sale. 


'  Lynde  v.  O'Donnell,   31   How.  the  Code,   that  a    foreclosure   sale 

(N.  Y.)  Pr.  34  (1861) ;  s.  c.  12  Abb.  might  be  made  by  a  referee  as  well 

(N.  Y.)  Pr.  286.     See  also  Center  v.  as  by  a  sheriff;  Jennings  v.  Jennings, 

Billiughurst,    1    Cow.    (X.   Y.)    33  2  Abb.  (N.    Y.)  Pr.    7,    17  (1855); 

(1825) ;  Cleve  v.  "Veer,  Cro.  Car.  450  Knickerbacker  v.  Eggleston,  3HovV. 

(1625).  (N.  Y.)  Pr.  130  (184^7). 

*  §  77.  5  See  New  York  Code  Civ.  Proc 

*  Knickerbacker  v.  Eggleston,    3  §  1242. 
How.  (N.  Y.)  Pr.  130  (1847;. 

*  It  was  held  in  an  early  case  under 


§§  472-473.]  DUTIES  of  officer  sELLma.  667 

The  sale  on  a  mortgage  foreclosure  must  be  made  by  the 
officer  designated  by  the  court,  or  by  some  one  selected  by 
him  to  act  under  his>  supervision/  or  it  will  be  void.'  Thus, 
where  a  sale  was  directed  to  be  made  by  a  master  in  chancery 
residing  in  New  York  city,  and  a  sale  was  made  by  a  master 
residing  in  Brooklyn,  the  sale  was  set  aside,  although  the 
purchaser  had  taken  his  deed.'  And  a  sale  made  by  a  person 
deputized  by  the  officer  authorized  to  make  such  sale  will 
be  irregular,  if  made  in  the  absence  of  such  officer." 

§  472.  Sale  in  New  York  City— By  whom.— It  is  pro- 
vided by  statute,'  that  all  sales  of  real  estate  made  in  the 
counties  of  New  York  and  Kings,  under  the  judgment  or 
decree  of  a  court  in  actions  for  foreclosure,  shall  be  made  by 
the  sheriff,  except  where  both  parties  to  the  suit  agree  upon 
a  referee  to  be  appointed  by  the  court.  This  law  was  passed 
to  take  the  place  of  the  law  of  1869,  chap.  569,  which  was 
declared  unconstitutional  and  was  of  doubtful  validity.* 

§  473-  Duties  of  officer  making  sale.— The  duties  of  a 
referee  appointed  to  sell  in  a  mortgage  foreclosure,'  are 
purely  ministerial  in  their  nature,  and  he  can  not  vary  the 
judgment  in  prescribing  the  terms  of  sale,  nor  relieve  himself 
thereby  from  the  performance  of  his  duties.*     It  is  his  duty 

>  Heyer  v.  Deaves,  2  Johns.   Ch.  »  Yates  v.  Woodruff,  4  Edw.  Ch. 

(N.  T.)  154  (1816) ;  Gould  v.  Garri-  (N.  Y.)  700  (1846).     See  Fuller  v. 

son,  48  111.  258  (1868).  See  Reynolds  VanGeeson,  4  Hill  (N.  Y.)  171,  176 

V.  Wilson,  15  m.  394  (1854) ;  s.  c.  (1843). 

60  Am.    Dec.  753  ;  Blossom  v.  Mil-  *  Heyer  v.   Deaves,  2  Johns.   Ch. 

waukee  &  C.  R.  R.  Co.,  70  U.  S.  (3  (N.  Y.)  154  (1816). 

Wall.)  196,  205  (1865) ;  bk.  19  L.  ed.  '  Laws  of  1876,  chap.  439. 

43  ;  Williamson  v.  Berry,  49  U.  S.  « Gaskin  v.  Meek,  42  N.  Y.  186 

(8  How  )  495,  544  (1850) ;  bk.  12  L.  (1870).      See  Gaskin  v.   Anderson, 

ec[.  1170.  7  Abb.  (N.  Y.)  Pr.  N.  S.  1  (1869), 

It  is  said  in  Blossom  v,  Milwaukee  affirming  55  Barb.  (N.  Y.)  259. 

A  C.  R.  R.  Co. ,  srtpra,  that  such  sales  '  There  is  no  doubt  that  the  statute 

"must  be  made  by  the  person  desig-  imposes  a  duty  upon  the  referee  ; 

nated  in  the  decree,   or  under  his  O'Donnell  v.    Lindsay,     39  N.   Y. 

immediate  direction  and  supervision,  Supr.  Ct.  (7  J.  &  S.)  523,  529  (1873). 

but  he  may  employ  an  auctioneer  to  «  People  v.  Bergen,  53  N.  Y.  404 

conduct  the  sale,  if  it  be  made  in  his  (1873) ;  s.  c.  15  Abb.  (N.  Y.)  Pr.  N. 

presence."    See  ante  §  470.  S.  97. 

«  SeeN.Y.  Supreme  Court  Rule  61. 


568  DUTIES    OF    OFriCER    SELLING.  [§473. 

to  proceed  to  execute  the  decree  of  sale  without  delay, 
if  he  is  requested  to  do  so  by  any  of  the  parties  to  the  suit 
who  will  be  injured  by  delay,  regardless  of  any  directions 
he  may  receive  from  the  plaintiff  or  his  attorney.  And 
should  the  officer,  under  whose  direction  the  premises  are 
ordered  to  be  sold,  neglect  to  proceed  at  once  to  sell  the 
same,  the  court  will  direct  such  officer  to  proceed  forth- 
with upon  the  application  of  any  person  who  is  interested 
in  the  sale.' 

It  is  the  duty  of  the  officer  conducting  a  sale  under  a  decree 
of  foreclosure,  to  attend  at  the  time  and  place  of  the  sale,  and 
(i)  to  announce  the  terms  of  sale,  if  they  are  not  contained 
in  the  published  notice  ;  (2)  to  offer  the  premises  to  the 
highest  bidder,  and  to  "receive  bids  as  long  as  they  are 
offered,  waiting  a  reasonable  time  after  each  bid  is  made  for 
others,  and  if  no  others  are  made,  to  strike  off  the  premises  to 
the  highest  bidder;  (3)  after  marking  down  the  premises 
to  the  highest  bidder,  to  require  him  to  sign  a  memorandum 
of  the  sale,  agreeing  to  complete  the  same ;  (4)  if  at  the 
time  appointed  for  the  sale,  there  are  no  bidders,  or  if  from 
the  few  persons  in  attendance,  or  other  sufficient  cause,  the 
officer  is  satisfied  that  a  fair  price  can  not  be  obtained,  to 
postpone  the  sale  and  not  sacrifice  the  property  unneces- 
sarily." 

Where  the  property  has  been  struck  off  to  a  bidder  who 
does  not  comply  with  the  terms  of  the  sale,  the  officer  mak- 
ing the  sale  may  again  offer  the  property  for  sale  upon 
sufficient  notice,  so  that  no  one  will  be  misled  or  injured.'  And 
where  the  highest  bidder  has  withdrawn  his  bid,  it  is  the 
duty  of  the  officer  making  the  sale,  to  mark  the  premises 
down  to  the  next  highest  bidder ;  and  if  such  person  leaves 
the  sale  before  the  property  is  marked  down  to  him,  it  is  the 
duty  of  the  officer  making  the  sale  to  suspend  the  pro- 
ceedings until  such  bidder  can  be  notified.* 


'  Kelley  v.  Israel.  11  Paige  Ch.  (N.  Pr.  294  (1855) ;  s.  c.  13  How.  (N.  Y.) 

Y.)  147  (1844).  Pr.  72. 

«  Bicknell  v.  Byrnes,  23  How.  (N.  ■«  May  v.  May,  11  Paige  Ch.  (N. 

Y.)  Pr.  486,  487  (1862).  Y.)  201  (1844). 

»  Lentz  V.  Craig,  2  Abb.  (IST.  Y.) 


§  474.]  DISOEETION   OF   OFFIOEE   SELLING.  569 

It  has  been  held,  that  where  the  party  purchasing  offers  to 
pay  in  bank  notes,  and  specie  payment  is  demanded,  it  is 
the  duty  of  the  officer  making  the  sale  to  wait  a  reasonable 
time,  in  order  to  allow  the  bidder  to  comply  with  the  terms.* 
It  has  been  the  general  practice  of  sheriffs,  masters  in  chan- 
cery and  referees,  in  making  mortgage  foreclosure  sales,  to 
receive  current  bank  bills  in  payment.* 

Where  an  execution  is  issued  upon  a  decree  of  foreclosure 
to  sell  mortgaged  property,  it  is  not  necessary  for  the  sheriff  to 
make  a  levy  upon  the  premises  before  proceeding  to  sell 
the  same.* 

§  474.  Discretion  of  the  officer — Selling  in  parcels. — 
The  Code  requires  where  real  property  offered  for  sale,  by 
virtue  of  a  decree  of  the  court  or  on  execution,  consists  of 
two  or  more  known  lots,  tracts  or  parcels,  that  such  lots, 
tracts  or  parcels  must  be  separately  exposed  for  sale,  and 
•  that  no  more  of  the  property  shall  be  exposed  for  sale,  than 
appears  to  be  necessary  in  order  to  satisfy  the  plaintiff's 
claim.* 

The  present  provisions  of  the  Code*  are  a  re-enactment  of 
a  former  statute,'  and  are  only  directory  to  the  sheriff  or 
officer  making  the  sale.  A  sale  to  a  botia  fide  purchaser 
will  be  held  to  be  valid,  although  the  requirements  of  the 
statute  may  not  have  been  complied  with ;  but  where  the 
purchase  is  not  made  in  good  faith,  the  sale  will  be  set 
aside  upon  the  application  of  the  proper  parties.'' 

The  provisions  of  the  statute  and  the  rules  of  practice 
give  to  the  referee,  or  other  officer  making  the  sale  on 
a  mortgage  foreclosure,  a  discretion  regarding  the  amount 
of  property  to  be  sold,  similar  to  that  in  the  case  of  other 


'  See  Baring  v.   Moore,  5  Paige  N.   T.    Supreme    Court   Rule    61 ; 

Ch.  (N.  T.)  48  (1835).  GrofE  v.  Jones,  6  Wend.  (N.  Y.)  523 

«  Hall  V.  Fisher,  9  Barb.  (N.  T.)  (1831) ;  s.  c.  23  Am.  Dec.  545. 

17  (1849).    See  Mumford  v.   Arm-  »  N.  Y.  Code  Civ.  Proc.  §  1437. 

strong,  4  Cow.   (N.  Y.)  553  (1836) ;  •  2  Rev.  St.  369,  §38. 

Baring  V.  Moore,  5  Paige  Ch.  (N.Y.)  'Wallace    v.    Feely,    1    N.    T. 

48,  53  (1835).                               •  Civ.   Proc.   Rep.   126  (1881).      See 

«  Bank   of   British   Columbia  v.  GrofC  v.  Jones,  6  Wend.  (N.  Y.)  523 

Page,  7  Greg.  454  (1879).  (1831) ;  s.  c.  22  Am,  Dec.  545. 

*  N.  Y.  Code  Civ.  Proc.  §  1437  ; 


570  DISCRETIO]^'    OF    OFFICEK    SELLIN^G.  [§474. 

sales  of  real  estate.  Under  some  circumstances  the  officer 
will  be  obliged  to  exercise  a  discretion,  which  is  judicial  in 
its  nature,  in  deciding  what  is  the  best  course  to  pursue 
upon  the  sale,  in  which  case  an  honest  exercise  of  that 
discretion  will  be  as  final  as  the  decision  of  any  judicial 
tribunal. 

Where  the  question  of  determining  whether  the  property 
shall  be  sold  in  parcels  or  as  one  tract  rests  in  the  sound 
discretion  of  the  referee,  if  he  honestly  and  fairly  exercises 
that  discretion,  in  the  absence  of  any  special  circumstances 
tending  to  show  a  clear  mistake  of  judgment,  such  discreiion 
will  control  and  the  sale  will  be  valid.' 

Although  the  statute  and  the  rules  of  the  court  require 
that  no  more  of  the  real  estate  shall  be  sold  than  will  be 
sufificient  to  satisfy  the  judgment,"  yet  the  provisions  of  the 
statute  and  the  rules  of  the  co.urt  are  only  directory,  and 
failure  to  follow  them  will  be  merely  an  irregularity  and  will 
not  necessarily  vitiate  the  sale,  although  it  may  be  a  ground 
for  setting  it  aside  on  motion  of  any  party  aggrieved  who  may 
have  claimed,  at  the  time  of  the  sale,  the  right  to  have  the 
property  sold  in  parcels,  and  who  has  not  waived  his  right 
by  delay  in  objecting  to  the  sale  on  that  account.' 

The  statute  presupposes  that  the  officer  making  a  sale  in 
a  mortgage  foreclosure  will  ascertain  the  situation  of  the 
property,  before  he  sells  in  obedience  to  the  decree.* 
Where  the  mortgaged  premises  directed  to  be  sold  consist 
of  several  different  lots  or  parcels  of  land,  which  can  be 
disposed  of  separately  without  diminishing  their  value, 
it  is  the  duty  of  the  officer  making  the  sale  to  sell 
the  same  in  separate  lots  or  parcels,  unless  otherwise 
specially  directed  by  the  court. 


'  Whitbeck  v.  Roe,  25  How.  (N.  Mclntyre  v.  Sanford,  9  Daly  (N.  Y.) 

Y.)  Pr.  403  (1862).  21  (1880) ;    Ames  v.  Lockwood,  13 

2  Groff  V.  Jones,  6  Wend.  (N.  Y.)  How.  (^ST.  Y.)  Pr.  555  (1856);  Woods 

522  (1831)  ;  s.  c.  22  Am.  Dec.  545.  v.  Monell,  1  Johns.  Ch.  (N.  Y.)  503 

*  Cunningham  v.  Cassidy,  17  N.  (1815). 
Y.  276  (1858) ;  s.  c.  7  Abb.  (N.  Y.)         *  O'Donnell  v.  Lindsay,  39  N.  Y. 

Pr.   183  ;    Wallace  v.  Feely,  1    N.  Supr.  Ct.  (7  J.  &  S.)  523,  529  (1873). 
Y.   Civ.    Proc.    Rep.   126   (1881); 


§475.]  PUBLISHING   NOTICE   OF   SALE.  571 

Thus,  where  a  deed  of  trust  was  given  on  the  west  one  hun- 
dred acres  of  a  quarter  section  of  land,  and  the  land  was  after- 
wards subdivided  into  lots  and  blocks,  a  decree  of  foreclosure 
ordering  a  sale  of  the  premises  was  held  not  to  require  the 
sale  of  the  property  en  masse,  but  that  it  would  be  the  duty 
of  the  officer  to  sell  the  same  by  lots,  if  such  mode  of 
sale  would  be  more  advantageous.'  But  where  the  officer 
making  the  sale  is  satisfied  that  the  property  will  produce  a 
greater  price  if  sold  together  than  if  sold  in  parcels,  he  may 
sell  it  together,  unless  otherwise  directed  by  the  court. 

§  475.  Notice  of  sale. — In  most,  if  not  all  of  the  states, 
the  notice  required  to  be  given  of  a  foreclosure  sale  is  regu- 
lated by  statute ;  and  where  so  regulated,  the  sale  will  be 
illegal,  if  it  is  made  without  the  prescribed  notice,  and  may 
be  set  aside.*  Thus,  where  thirty  days*  notice  is  required 
to  be  given  to  the  defendant  of  a  sale  of  real  estate  by  a 
sheriff  under  a  decree  of  foreclosure,  the  sale  will  be  set 
aside  if  such  notice  is  not  given.*  The  right  of  a  defendant 
in  a  foreclosure  to  all  the  time  the  decree  allows  him  for  mak- 
ing a  payment,  can  not  be  presumed  to-be  waived  in  order  to 
sustain  a  sale  prematurely  made  without  notice  to  him.* 

When  not  regulated  by  statute,  the  notice  of  sale  may  be 
prescribed  by  the  decree  of  foreclosure,  or  left  to  the  discre- 
tion of  the  officer  entrusted  with  the  execution  of  the  decree. 
Whether  prescribed  by  the  court  or  determined  by  the 
officer,  the  notice  should  not  only  fix  the  time  of  sale,  but 
also  the  hour  of  the  day  on  which  it  will  be  made,  in  order 
to  prevent  the  setting  aside  of  the  sale  in  case  a  reasonable 
price  is  not  obtained  for  the  property.* 

The  New  York  Code  of  Civil  Procedure*  provides  that  the 
sale  shall  be  made  in  the  county  where  the  real  estate  is 
situated,  and  that  due  notice  of  the  time  and  place  of  holding 


•  Chicago  «fe  Gt.  "Western  R.  Co.  *  Shier  v.  Prentis,  55  Mich.  175 
▼.  Peck,  112  Ul.  408  (1885).  (1884). 

*  See  Shier  v.  Prentis,  55  Mich.  *  Trustees  of  Schools  v.  Snell,  19 
175  (1884) ;  MiUer  v.  Lefever,  10  111.  156  (1857) ;  8.  c.  68  Am.  Dec, 
Neb.  77  (1880).  586.     See  Miller  v.  Lefever,  10  Neb. 

"  Miller  v.  Lefever,   10  Neb.   77  77  (1880). 

(1880),  *  N.  Y.  Code  Civ.  Pro.  §§  1434,1678. 


572  PUBLISHIIS-G-   NOTICE    OF    SALE.  [§  475. 

the  sale  shall  be  publicly  advertised  for  six  successive  weeks 
immediately  preceding  the  sale,  as  follows  :  "A  written  or 
printed  notice  thereof  must  be  conspicuously  fastened  up  at 
least  forty-two  days  before  the  sale,  in  three  public  places, 
in  the  town  or  city  where  the  sale  is  to  take  place,  and  also  in 
three  public  places  in  the  town  or  city  where  the  property  is 
situated,  if  the  sale  is  to  take  place  in  another  town  or  city. 
A  copy  of  the  notice  must  be  published  at  least  once  in  each 
of  the  six  weeks  immediately  preceding  the  sale,  in  a  news- 
paper published  in  the  county,  if  there  is  one,  or,  if  there  is 
none,  in  the  newspaper  printed  at  Albany,  in  which  legal 
notices  are  required  to  be  published." ' 

But  where  the  property  is  situated  wholly  or  partly  in  a 
city  in  which  a  daily  paper  is  published,  notice  of  the  sale 
may  be  given  by  the  publication  in  such  daily  paper  of 
notice  thereof  at  least  twice  in  each  week  for  three  succes- 
sive weeks  immediately  preceding  the  sale  ;  or,  if  in  the  city 
of  New  York  or  the  city  of  Brooklyn,  in  two  such  papers.* 

Under  a  provision  of  the  statute,'  the  judges  of  the  various 
courts  in  the  city  of«  New  York  have  designated  The  Lazv 
Journal  as  the  official  paper  in  which  all  legal  notices  are  to 
be  published. 

The  notice  of  sale  is  usually  drawn  and  posted  by  the 
plaintiff's  attorney,*  who  should  also  prepare  a  statement  of 
the  terms  of  sale,  which  are  usually  read  with  the  notice 
on  the  day  of  sale.  This  statement  should  specify  the  terms 
and  conditions  of  the  sale,  the  time  of  payment  of  the  pur- 
chase money,  what  amount  is  to  be  paid  on  the  day  of  sale, 
when  and  where  the  referee's  deed  is  to  be  executed  and 
delivered,  what  amount,  if  any,  is  to  be  deducted  for  taxes, 
assessments,  water  rents  and  other  incumbrances ;    but    it 


'  N.  T.  Code  Civ.  Proc.  §  1434.  *  In  the  sale  of  mortgaged  property 
»  N.  Y.  Code  Civ.  Proc.  §  1678.  the  attorney  for  the  plaintiff  is  con- 
As  to  sufficiency  of  publication  with-  sidered  as  the  agent  of  all  the  parties 
in  the  meaning  of  this  section,  see  to  the  action,  and  the  proceedings 
Chamberlain  v.  Dempsey,  13  Abb.  on  the  sale  are  usually  supervised  by 
(N.  Y.)  Pr.  421  (1862) ;  B.C.  22  How.  him.  Dalby  v.  Pullen,  1  Russ.  & 
(N.  Y.)  Pr.  356.  Myl.  296  (1830). 
•  Laws  of  1874,  chap.  656. 


§§  476-477.]  NOTICE  or  sale.  673 

reed  not  describe  the  nature  and  situation  of  the  property, 
that  being  fully  done  by  the  notice  of  sale. 

§476.  Contents  of  notice  of  sale.— While  it  is  not 
absolutely  necessary,  yet  it  is  the  proper  practice,  to  insert 
the  title  of  the  cause  in  the  notice  of  sale.  This  is 
usually  done  by  stating  the  names  of  the  first  plaintiff,  and 
of  the  first  defendant  at  length,  and  by  adding  the  words  'V/ 
tf/.,"  or  "  and  others,"  where  there  are  several  plaintiffs  or 
several  defendants.'  Where  land  is  to  be  sold  by  a  referee, 
it  should  be  described  with  reasonable  certainty  by  setting 
forth  the  number  of  the  township  or  tract,  and  the  number 
of  the  lot,  if  the  lot  has  a  number;  and  if  it  has  none,  by 
some  other  appropriate  description.  It  is  usually  best  to 
follow  the  description  given  in  the  decree  or  order  of  sale. 
The  referee  is  not  at  liberty  to  insert  any  further  particulars 
in  such  notice,  whereby  the  value  of  the  property  will  be 
enhanced  or  depreciated,  or  the  purchaser  will  be  in  any 
way  misled.*  In  other  respects  there  is  no  rule  of  law 
prescribing  the  form  of  the  notice  of  sale. 

Where  the  mortgaged  premises  consist  of  several  tracts 
which  can  be  sold  separately,  without  prejudice  to  the 
parties,  it  is  not  necessary  to  state  in  the  notice  of  sale  that 
the  premises  will  be  sold  in  separate  parcels.' 

§  477*  Publication  of  notice  of  sale. — The  number  of 
weeks  and  the  number  of  times  each  week  which  a  notice 
of  sale  under  a  decree  of  foreclosure  is  required  to  be  pub- 
lished, is  regulated  by  the  statutes  of  the  various  states. 
Thus,  in  Maine  the  notice  is  not  required  to  be  published 
three  weeks  successively  so  as  to  continue  for  the  space  of 
twenty-one  days,*  but  it  must  appear  in  three  consecutive 


•  Ray  V.  Oliver,  6  Paige  Ch.  (N.  *  Wilson  v.   Page,    76    Me.    279 
Y.)  489  (1837).  (1885).     This  statute  has  been  con- 

'  Marsh  v.  Ridgeway,  18  Abb.  (N.  strued    to    mean    three  consecutive 

Y.)Pr.  262(1864);  Laight  v.  Pell,  1  weekly  issues  of  a  newspaper ;  not 

Edw.  Ch.  (N.  Y.)  577  (1833);  Veeder  that  there  must  be  a  period  of  twenty- 

V.  Fonda,  3  Paige  Ch.   (N.  Y.)  94  one  days  between  the  time  of  the 

(1832).  first  publication,  and  the  date  of  the 

*  Hoffman  v.  Burke,  21  Hun  (N.  last  insertion. 
Y.)  580  (1880). 


574  PUBLISIIIXG    NOTICE    OF    SALE.  [§477. 

weekly  issues  of  the  paper;  while  under  the  Wisconsin 
statute,'  a  notice  of  sale  under  a  decree  of  foreclosure  is 
required  to  be  published  for  six  full  weeks  after  the  expira- 
tion of  one  year  from  the  date  of  the  judgment.' 

Where  the  published  notice  of  sale  is  dated  prior  to  the 
expiration  of  the  year,  there  will  be  an  apparent  irregularity  at 
least  in  the  proceedings  tending  to  the  defendant's  injury  ; 
but  whether,  upon  clear  proof  of  the  regular  publication  of 
the  notice  at  and  •for  the  time  prescribed  by  statute,  such 
apparent  irregularity  will  be  fatal  to  the  sale  is  not  deter- 
mined.* 

Whether  publication  of  a  notice  is  required  to  be  made 
for  three  weeks,  twice  in  each  week,  or  for  six  weeks,  once 
in  each  week,  it  is  not  necessary  that  in  the  first  instance 
twenty-one  days  should  elapse  between  the  time  of  the  first 
publication  and  the  time  of  sale,  nor  in  the  second  case,  that 
forty-two  days  should  elapse  between  the  first  publication, 
and  the  day  of  sale,  in  order  to  render  the  publication  of  the 
notice  sufficient  and  the  sale  made  thereunder  valid."  It 
has  been  held  that  the  notice  of  sale  need  not  be  inserted  in 
every  edition  of  the  paper  issued  on  the  day  on  which  the 


'  Wis.   Rev.    Stat.   §§  2993,  3162,  full  days,  and  when  the  publication 

3168.  is  directed  to  be  made  twice  a  week 

« Kopmeier  v.  O'Neil,  47  Wis.  593  for  three  weeks,  it  means  that  there 

(1879).  shall  be  a  period  of  twenty  one  da3's 

«  Kopmeier  v.  O'Neil,  47  Wis.  593  before  the  sale,  calculated  by  weeks, 

(1879).  during  each  of  which,  two  publica- 

*  Market  Nat.  Bank  v.  Pacific  tions  shall  be  made,  and  this  shall 
Nat.  Bank,  89  N.  Y.  397,  399  (1883);  occur  without  regard  to  the  day 
8.  c.  11  Abb.  (N.  Y.)  N.  C.  104 ;  of  the  week  when  the  publication 
Olcott  V.  Robinson,  21  N.  Y.  150  was  commenced."  But  in  this  case, 
(1860) ;  Sheldon  v.  Wright,  5  N.  Y.  the  notice  of  sale  of  real  property  in 
497  (1851) ;  Steinle  v.  Bell,  12  Abb.  the  city  of  New  York,  under  decree 
(N.  Y.)  Pr.  N.  S.  171,  177  (1872) ;  of  foreclosure,  to  take  place  on  the 
Merritt  v.  Village  of  Rochester,  8  20th  day  of  May,  was  published  in 
Hun  (N.  Y.)  40,  45  (1876) ;  Wood  v.  two  papers  on  April  the  27th  (Wed- 
Terry,  4  Lans.  (N.  Y.)  80,  85  (1871);  nesday)  and  30th  (Saturday),  May 
Ilackley  v.  Draper,  4  T.  &  C.  (N.  4th  (Wednesday),  7th  (Saturday), 
Y.)  614,  622  (1874).  In  the  case  of  11th  (Wednesday)  and  14th  (Satur- 
Valentine  v.  McCue,  26  Hun  (N.  Y.)  day),  and  in  one  of  them  on  May 
456  (1882),  the  court  say :  "  The  20th  ;  and  this  publication  of  no- 
period  of  a  week,  therefore,  is  seven  lice  was  held  to  be  sufficient. 


§  477.]  PUBLISHING   NOTIOE   OF   SALE.  575 

notice  was  published.*  And  it  seems  that  the  court  may 
amend  the  judgment  during  the  publication  of  the  notice  of 
sale,  without  affecting  the  validity  of  such  notice,  or  the 
validity  of  the  title  to  the  property  sold  thereunder.* 

A  notice  of  sale  of  property  was  directed  to  be  published 
in  a  designated  paper,  which,  after  the  decree  and  before  the 
publication  of  the  notice,  was  merged  in  another  paper 
and  its  name  changed ;  on  application  to  the  judge  at 
chambers,  he  directed  the  sale  to  be  advertised  in  the  same 
paper  under  its  new  name.  The  publication  of  the  notice 
in  such  paper  under  its  new  name  was  held  to  be  in  accord- 
ance with  the  decree  and  to  be  valid  and  sufficient.* 

Under  a  judgment  of  foreclosure  and  sale,  a  notice  of  the 
sale  to  take  place  on  the  twenty-eighth  day  of  December  was 
published  on  the  ninth,  twelfth,  sixteenth,  nineteenth,  twenty- 
third  and  twenty-sixth  of  that  month,  and  the  court  held 
this  to  be  a  publication  twice  in  each  week  for  three  weeks 
immediately  preceding  the  sale  within  the  meaning  of  the 
Code.*  In  the  case  of  Wood  v.  Morehouse,*  an  execution 
was  issued  to  the  sheriff  on  the  twenty-sixth  day  of  Septem- 
ber, and  he  caused  a  notice  of  the  sale  thereunder  to  be 
published  on  the  following  first  day  of  November,  in  a  news- 
paper printed  in  the  proper  county,  and  to  be  continued  once 
a  week  for  six  successive  weeks,  and  afterwards  sold  the 
property  on  an  adjourned  day,  and  such  publication  of 
the  notice  was  held  valid. 

Proof  of  the  due  publication  of  the  notice  may  be  made 
by  the  affidavit  of  any  person  having  knowledge  of  the  fact.* 
In  the  absence  of  proof  to  the  contrary,  it  will  be  presumed 
that  publication  of  a  notice  of  sale  made  in  a  daily  news- 
paper was  first  made  on  the  day  of  the  date  of  such  notice, 
especially  if  such  presumption  does  not  conflict  with  either 
the  sheriff's  certificate  or  the  printer's  affidavit.* 


1  Everson  v.  Johnson,  32  Hun  (N.  Abb.  Pr.  421  (1862) ;  b.  c.  22  How. 

Y.)  115  (1880).  (N.  T.)  Pr.  356. 

» Valentine  v.  McCue,  26  Hun  (N.  "  1  Lans.  (N.  T.)  405  (1869) ;  aff'd 

Y.)  456  (1882).  45  N.  Y.  368. 

•Sagev.   Cent.    R.    R.   Co.,    13  «Mmerv.Lefever,10Neb.77(1880). 

West.  Jurist,  218  (1878).  '  Kopmeier  v.  O'NeU,  47  Wis.  693 

*  Cliamberlain    v.    Dempsey,    13  (1879). 


576  WHEN    SALE   MAY   BE   MADE.     [§§  478-479. 

§  478.    When  sale  may  be  made— Hour  of  day.— It  is 

provided  in  many  of  the  states  that  mortgaged  premises 
shall  not  be  sold  under  a  judgment  of  foreclosure,  until  after 
the  lapse  of  a  specified  time  from  the  commencement  of  the 
action,  or  the  recovery  of  the  judgment.'  Where  there  is  such 
a  regulation,  any  proceedings  taken  for  a  sale  before  the  expi- 
ration of  the  prescribed  period,  such  as  publishing  the  notice 
thereof,  will  be  irregular,  but  not  void.'  And  under  such  a 
statute,  where  a  party  is  brought  in  as  a  defendant  by  an 
amended  complaint,  and  is  charged  with  a  personal  liability, 
the  statutory  period  after  which  a  sale  may  be  made  will 
run  only  from  the  date  of  filing  the  amended  complaint.* 

The  time  of  day  at  which  a  sale  of  mortgaged  premises 
shall  be  made  under  a  decree  of  foreclosure  is  usually  a 
matter  resting  entirely  in  the  discretion  of  the  referee  or 
other  officer  making  the  sale,*  except  that  in  New  York  the 
sale  is  required  by  the  Code  of  Civil  Procedure^  to  be  made 
at  public  auction  between  the  hour  of  nine  o'clock  in  the 
morning  and  sunset.*  Should  the  sale  be  made  before  sun- 
rise in  the  morning  or  after  sunset  in  the  evening,  it  will  be 
absolutely  void.^ 

Where  the  lands  to  be  sold  are  situated  wholly  or  partly 
within  the  city  of  New  York,  or  the  city  of  Brooklyn,  the 
sale  shall  be  made  at  public  auction  between  twelve  o'clock 
noon  and  three  o'clock  in  the  afternoon,  unless  otherwise 
specially  directed." 

§  479.  Sale  to  be  made  at  time  advertised— Place  of 
sale. — The  sale  of  mortgaged  premises  in  an  action  for 
foreclosure  must  be  made  at  the  time  fixed  for  selling  the 


•Burt  V.  Thomas,  49  Mich.  462  ^Sessions  v.Peay,  23  Ark.39(1861). 

(1882) ;    Culver   v.    McKeown,    43  "  N.  Y.  Code  Civ.  Proc.  §  1384. 

Mich.  322  (1880).     See  Andrews  v,  «  See  Carnrick  v.  Myers,  14  Barb. 

Welch.  47  Wis.  132  (1879)  ;;North-  (N.  Y.)  9  (1852). 

western  Mut.  L.  Ins.  Co.  v.  Neeves,  '  Carnrick v.Myers,14Barb.(N.Y.) 

46  Wis.  147  (1879) ;  Wis.  Rev.  Stat.  9  (1852).     See  Wood  v.  Morehouse, 

§3162.  45  N.  Y.  369  (1869),  aff'g  1  Lans. 

»  See  Northwestern  Mut.  L.  Ins.  (N.  Y.)  405, 413 ;  Hackley  v.  Draper, 

Co.  V.  Neeves,  46  Wis.  147  (1879).  4  T.  «&  C.  (N.  Y.)  614,  622  (1874)-, 

»  Canfield  v.  Shear,  49  Mich.  313  Frederick  v.  Wheelock,  3  T.  &  C. 

(1882).  (N.  Y.)  210,  212  (1874). 


§480.]  TOIE   AND    PLACE   OF    SALE.  ^"IT 

same,  pursuant  to  the  notice ;  and  if  such  time  has  passed, 
and  a  valid  sale  has  not  been  made,  or  if  the  party  in  interest 
elects  to  disregard  it,  the  officer  conducting  the  sale  can  not 
sell  again  without  an  order  of  the  court,  unless  he  advertises 
the  sale  de  novo} 

It  was  held  in  Bicknell  v.  Byrnes,'  that  where  the  "  mort- 
gagor, or  other  person  interested  in  the  premises,  attends  at 
the  time  fixed  for  the  sale,  and  a  sale  upon  satisfactory 
terms  is  made  and  he  leaves,  and  thereafter,  without  notice, 
the  party  foreclosing  abandons  the  sale  and  makes  a  new 
one,  he  may  create  just  such  an  amount  for  deficiency,  or 
he  may  purchase  the  premises  at  just  such  a  price  as  he 
deems  proper.     Such  a  practice  can  not  be  tolerated." 

If  the  officer  making  the  sale  re-advertises  the  property 
before  selling,  an  order  of  the  court  will  not  be  necessary, 
and  such  a  resale,  if  otherwise  conducted  in  conformity  to  the 
rules  regulating  sales  of  real  estate,  will  be  valid. 

As  a  general  rule,  the  sale  of  real  property  under  a  decree 
of  the  court  must  be  made  on  the  premises,  or  at  the  court 
house  in  the  county  in  which  the  lands  are  situated,  unless 
for  good  cause  shown  the  court  directs  otherwise.'  In  New 
York  the  Code  provides  that  all  sales  of  real  property  on 
mortgage  foreclosure  under  final  judgment,  shall  be  made 
by  the  sheriff  or  other  officer  executing  the  decree  of  sale  in 
the  county  in  which  the  property  is  situated.* 

If  the  mortgaged  premises  are  situated  in  the  city  of  New 
York,  unless  otherwise  specially  directed  by  the  court,  they 
are  required  to  be  sold  at  public  vendue  at  the  Exchange 
Sales  Rooms,  No.  1 1 1  Broadway,  between  the  hours  of 
twelve  and  three  o'clock  in  the  afternoon.* 

§  480.  Terms  and  conditions  of  sale. — The  New  York 
Code  of  Civil  Procedure  requires  that  the  terms  of  sale  on  a 
mortgage  foreclosure  shall  be  made  known  at  the  time  of 
the  sale;  if  the  property  or  any. part  thereof  is  to  be  sold 


»  N.  T.  Supreme  Court  Rule  63.  «  Sessions  v.   Peay,    23   Ark.   39 

»  Bicknell  v.  Byrnes,  23  How.  (N.      (1861). 
T.)  Pr.  486  (1862).  ■»  N.  Y.  Code  Civ.  Proc.  §  1?43. 

»  23  How.  (N.  Y.)  Pr.  489  (1862).  •  N.  Y.  Supreme  Court  Rule  62. 

-     (57) 


578  TEEMS   OF   SALE.  [§  480. 

subject  to  any  lien  or  charge,  or  to  a  right  of  dower,  that 
fact  must  also  be  made  known  at  the  time  of  the  sale.'  It  is 
the  usual  practice  for  the  officer  conducting  such  sale  to 
read  the  notice  of  sale  for  the  purpose  of  informing  bidders 
of  the  location  and  general  description  of  the  property  to  be 
sold  ;  it  is  also  his  duty  to  announce  the  terms  of  sale,  if 
they  are  not  contained  in  the  published  notice.*  After 
announcing  the  terms  of  sale,  the  officer  in  charge  should 
offer  the  premises,  or  separate  parcels  thereof,  to  the 
highest  bidder.'  But  the  officer  making  the  sale  is  not 
obliged  to  accept  the  highest  bid,  if  he  has  reasons  for 
believing  that  the  bid  is  not  made  in  good  faith,  or  that  the 
bidder  is  unable  to  comply  with  the  terms  of  sale.* 

As  a  reasonable  precaution  in  order  to  insure  the  comple- 
tion of  the  sale,  or  to  cover  the  costs  and  expenses  of  a 
resale,  in  case  the  purchaser  should  fail  to  fulfill  his  contract, 
a  deposit,  or  the  payment  of  some  portion  of  the  bid,  at  the 
time  of  the  sale,  is  usually  required.  The  amount  to  be 
paid  or  deposited  should  be  a  sum  reasonably  sufficient  to 
insure  the  completion  of  the  purchase  or  to  cover  the 
expenses  of  a  resale.*  To  require  the  immediate  payment 
of  the  whole  purchase  money  in  cash  at  the  time  of  the  sale, 
would  tend  to  deter  bidders,  and  in  this  manner  be  oppres- 
sive and  unjust  to  the  mortgagor;  a  sale  made  upon  such 
terms,  unless  specially  ordered,  may  be  set  aside  by  a  court 
of  equity.' 

Where,  by  the  terms  of  sale,  the  purchase  money  is  to 
accompany  the  bid,  or  a  deposit  is  to  be  made,  and  the  bidder 
refuses  to  make  such  deposit  or  to  pay  the  price  bid  when 
demanded,  the  referee  may  at  once  resume  the  sale.^  It  is 
said    that   under  special   circumstances   the   sale   may   be 


*  N.  T.  Code  Civ.  Proc.  §  1678.  •  Goldsmith  v.  Osborne,  1  Edw. 

•  Bicknell  v.  Byrnes,  23  How.  .(N.  Ch.  (N.  Y.)  560,  562  (1833). 

V.)  Pr.  486  (1862).  •>  See  Lents  v.  Craig,  13  How.  (N. 

'  N.  Y.  Code  Civ.  Proc.  §  1678.  Y.)  Pr.  72  (1855) ;  s.  c.  3  Abb.  (N. 

*  Gray  v.  Veirs,  33  Md.  18  (1870).  Y.)  Pr.  294 ;  Sherwood  v.  Reade,  8 

•  Maryland  Permanent  Land  and  Paige  Ch.  (N.  Y.)  633  (1841). 
Building    Society    of   Baltimore  v. 

fJmith,  41  Md.  516  (1874). 


§  481.]  TEEMS   AT^D    CONDITIONS   OF   SALE.  579 

adjourned  to  another  day  and  then  resumed,  if  the  deposit 
is  not  made  or  the  price  bid  is  not  paid.*  Should  the  day 
of  sale  be  permitted  to  pass  without  an  adjournment  or  the 
completion  of  the  sale  by  the  purchaser,  the  referee  may 
re-advertise  and  resell  the  premises^  as  if  no  notice  of  sale 
had  been  published." 

Where  by  the  terms  of  the  sale  the  price  bid  was  to  be  paid 
in  cash,  it  has  been  held  in  a  contest  between  bidders,  where 
the  sale  took  place  on  Saturday  and  the  money  was  paid 
on  the  following  Monday,  that  this  was  a  substantial  com- 
pliance with  the  terms  of  the  sale.* 

Where  the  terms  of  the  sale  are  cash  and  the  mortgagee 
becomes  the  purchaser  at  the  sale,  he  can  not  be  required  to 
pay  at  once  in  cash  the  whole  or  a  part  of  his  bid  as  earnest 
money.*  It  seems  that  the  holder  of  the  mortgage  may 
comply  with  the  terms  of  the  sale  where  it  is  to  be  for  cash, 
by  simply  indorsing  the  amount  of  his  bid  on  the  notes 
which  he  holds,  and  that  the  formality  of  paying  the  money 
to  the  officer  making  the  sale,  and  of  receiving  it  back  from 
him,  is  unnecessary.* 

But  if  any  person  other  than  the  mortgagee  becomes  the 
purchaser,  where  the  sale  is  to  be  for  cash,  he  must  comply 
strictly  with  the  terms  of  sale,  and  pay  the  price  bid  in  cash  * 
a  note  of  the  party  entitled  to  the  proceeds  of  the  sale  is  not 
cash,  and  the  tender  of  such  note  will  not  be  a  compliance 
with  the  terms  of  sale.* 

§  481.    Conditions  of  sale  sometimes  published. — It  is 

sometimes  the  practice  to  annex  to  the  notice  of  sale  a 
statement  of  the  conditions  or  terms  of  sale.  This  statement 
should  specify  fully  the  terms  and  conditions  of  the  sale, 
the  time  of  payment  of  the  purchase  money,  what  amount 
in  cash  is  to  accompany  the  bid,  and  when  and  where  the  deed 
is  to  be  delivered.     It  should  also  state  whether  the  sale  is  to 


'  Hoffman  on  Referees,  236.  *  Sage  v.  Central  R.  R.  Co.,  (Iowa), 

»  Robinson  v.  Brennan,  90  N.  T.  13  West.  Jurist,  218  (1878). 

208  (1882);   Bicknell  v.  Byrnes,  23         » Jacobs  v. Turpin,  83111.424(1876). 

How.  (N.  T.)  Pr.  486  (1862).  «  Pursley    v.    Forth,   82  111.   327 

« Jacobs  V.  Turpin,    83  Dl.  42^  (1876) ;  Sage  v.  Central  R.  R.  Co., 

(1876).  (Jowa),  13  West.  Jurist,  218  (1878). 


580  CONDITIONS    OF    SALE.  [§  482. 

be  subject  to  taxes,  assessments  and  water  rents,  for  it  is  the 
well  settled  practice  of  the  courts  to  have  all  taxes,  assess- 
ments and  water  rents,  which  are  liens  on  the  premises 
sold,  paid  out  of  the  purchase  money  by  the  of^cer  making 
the  sale,  unless  otherwise  provided.  The  decree  for  the 
sale  of  the  property,  in  some  instances,  directs  that  these 
liens  be  paid,  but  they  are  more  frequently  provided  for  by 
the  terms  of  the  sale.* 

It  has  been  held,  that,  since  the  purchaser  of  lease-hold 
property  at  public  sale  takes  it  subject  to  being  dispossessed 
for  rents  in  arrears,  it  is  necessary  that  the  judgment  of 
foreclosure  on  a  mortgage  of  lease-hold  property,  or  the 
terms  of  sale  thereof,  should  provide  for  the  payment  of 
such  rents,  in  order  to  obtain  the  full  value  of  the  property, 
and  that  the  purchaser  may  acquire  the  title  discharged 
of  such  liens.' 

§  482.  Sale  on  credit. — Although  a  sale  upon  credit 
might  produce  a  greater  price  than  a  sale  for  cash,  yet  judi- 
cial sales,  it  seems,  are  not  made  on  credit  unless  with  the 
consent  of  the  parties  interested,  for  if  the  court  should 
direct  that  the  sale  be  made  on  credit,  and  the  mortgaged 
land  should  produce  more  than  the  amount  of  the  mortgage 
debt,  two  new  mortgages  would  follow,  one  to  the  complain- 
ant for  whose  benefit  the  land  is  being  sold,  and  the  other 
to  the  defendant,  or  to  some  one  entitled  to  the  surplus. 
Such  a  practice  would,  in  effect,  convert  one  mortgage  into 


*  See  Catlin  v.  Grissler,  57  N.  Y.  in  an   ordinary  case   of   mortgage 

363  (1874);   Robinson  v.  Ryan,  25  upon  real  property,  it  would  not  be 

N.  Y.  320  (1862) ;  Stillman  v.  Van  deemed  an  essential  error.     But  in 

Beuren,  49  N.  Y.  Supr.  Ct.  (17  J.  &  this  case,  which  is  a  mortgage  upon 

S.)  86  (1883) ;  N.  Y.  Code  Civ.  Proc.  lease-hold  property,  taxes  and  assess- 

g  1676.     It  was  said  in  the  case  of  ments  should  not  be  paid  out  of  the 

Stuy  vesant  v.  Browning,  33  N.  Y.  purchase  money.    If  the  lessees  have 

Supr.  Ct.  Rep.  (1  J.  &  S.)  203,  210  agreed  to  pay  such  liens,  it  is  at 

(1871),  however,    that    "it    is    not  most  a  mere  personal  covenant,  and 

usual  to  insert  in  the  judgment  a  not  included  in  their  mortgage." 

direction  to  pay  taxes  or  assessments  2  gtiUman  v,  VanBeuren,  49  N.  Y. 

which  may  at  the  time  of  the  sale  be  Supr.    Ct.   (17  J.   &   S.)  86  (1883). 

a  lien  upon  the  mortgaged  premises.  See  Catlin  v.  Grissler,  57  N.  Y.  363 

That  is  usually  done  by  the  referee,  (1874) ;  Robinson  v.  Ryan,  25  N.  Y 

or  officer  who  makes  the  sale.     Yet,  320  (1862). 


§  482.]  SALES  ON  CEEDIT.  581 

another  or  into  several  mortgages,  and  it  might  be  injurious 
rather  than  beneficial  to  the  defendant.' 

It  seems,  however,  that  the  plaintiff  may  direct  the  referee, 
or  other  officer  making  the  sale,  to  sell  the  premises  on 
credit.  If  no  one  objects,  and  the  referee,  thus  authorized, 
sells  the  property  on  time,  and  such  sale  is  confirmed  by  the 
court,  the  purchaser  will  have  a  right  to  insist  upon  the  terms 
on  which  the  sale  was  made,  and  can  not  be  compelled  to 
pay  cash.'  Should  the  defendant  object  to  having  the  sale 
made  on  credit,  the  plaintiff,  or  the  court  on  his  application, 
may  allow  the  sale  to  be  made  on  credit  to  the  extent  of  the 
amount  due  to  him  for  principal  and  interest  f  but  beyond 
this  amount,  credit  can  not  be  allowed  to  the  purchaser. 

It  is  said  in  Chaffraix  v.  Packard,*  that  "  the  principle 
upon  which  the  right  of  a  mortgage  creditor  to  sell  for  cash 
rests,  is  that  every  part  of  the  property  is  mortgaged  for  the 
whole  of  the  principal  debt,  and  in  the  distribution  of 
the  proceeds  of  the  pledge  the  holders  of  the  different 
installments  of  the  same  mortgage  are  entitled  to  partici- 
pate." It  has  been  held  that  where  the  mortgage  provides 
for  the  sale  of  the  property  for  cash,  and  the  mortgagee 
makes  an  arrangement  with  the  purchaser  of  the  property  to 
allow  him  time  on  the  sum  due  on  his  mortgage,  the 
mortgagor  can  not  complain  of  such  an  arrangement, 
whether  made  before  or  after  the  sale,  inasmuch  as  he  can 
not,  by  any  possibility,  be  injured  by  such  arrangement ;  it 
therefore  constitutes  no  ground  for  setting  the  sale  aside. 
The  tendency  of  such  an  arrangement  would  be  to  increase 
the  number  of  bidders,  and  to  enhance  the  price  rather  than 
to  decrease  it.'  Yet,  it  seems  that  the  property  can  be 
sold  for  cash  to  pay  the  notes  which  are  due,  and  on  credit 
to  meet  unmatured  notes,  according  to  the  contract  of  the 
mortgage.* 

1  Sedgwick  v.  Fish,   Hopk.    Ch.  *  26  La.  An.  173,  175  (1874). 

(N.  Y.)  594  (1824).  »  Mahone  v.    Williams,   39   Ala. 

»  Rliodes  V.  Dutcher,  6  Hun  453,  202,  215  (1863). 

455  (1876).  « Pepper  v.  Dunlap,  16  La.   163, 

» Sedgwick  v.  Fish,   Hopk.    Ch.  170,   171   (1840).     See  Chaflfraix  v. 

«94  (1834;).  Packard,  26  La.  An.  172,  174  (1874). 


582  ORDER  STAYING  SALE.  [§  483. 

It  has  been  said  that  the  court  may  order  the  premises  to 
be  sold  on  credit  without  violating  the  obligation  of  the 
mortgage  contract.*  And  it  was  held  by  the  supreme 
court  of  Tennessee,  in  the  case  of  Mitchell  v.  McKinny,' 
where  a  trust  deed  provided  that  the  trustee  should  sell 
the  property  for  cash,  that,  on  a  bill  to  foreclose,  the  court 
might  order  a  sale  on  time.  But  it  was  held  by  the  supreme 
court  of  Virginia,  in  the  case  of  Crenshaw  v.  Seigfried,'  that 
where  the  mortgage  provides  that  the  property  shall  be  sold 
for  cash,  the  court  must  act  according  to  the  provisions  of 
the  mortgage,  and  can  not  sell  on  time. 

§  483.  Order  staying  sale. — In  an^  action  to  foreclose  a 
mortgage  the  court  will  do  its  utmost  to  secure  a  fair  and 
advantageous  sale  of  the  mortgaged  premises.*  The  unfor- 
tunate debtor  is  not  beneath  the  protection  of  the  court,  and 
it  will  not  permit  the  slightest  advantage  to  be  taken  of  him, 
even  by  pursuing  the  strict  forms  of  the  law.^  Thus,  in  case  of 
any  calamity,  such  as  hostile  invasion,  or  an  epidemic  pre- 
vailing at  the  time  and  place  of  sale,  the  court  will  interfere 
and  postpone  the  sale."  But  the  sale  of  mortgaged  premises 
under  a  decree  of  foreclosure  will  not  be  postponed  merely 
on  account  of  a  general  depression  in  the  business  of  the 
country,'  nor  on  account  of  the  existence  of  war,  because  the 
existence  of  war  is  a  general  calamity  and  is  not  sufficient  to 
justify  the  interruption  of  the  regular  administration  of 
justice  by  the  courts  in  the  collection  of  debts.' 

A  judicial  sale  made  on  the  day  of  the  charter  election  of 
a  city  is  not  necessarily  void  ;  but  if  the  plaintiff  has  been 


'  Stoney  v.  Shultz,   1  Hill  (S.  C.)  «  Lansing  v.  Goelet,  9  Cow.  (N. 

Eq.  465,  500  (1834) ;   s.  c.  27  Am.  Y.)  346,  402  (1827). 

Dec.  429  ;    Lowndes  v.    Chisholm,  ''  IVIcGown  v.  Sanford,  9  Paige  Ch. 

2  McC.  (S.  C.)  Eq.  455  (1826) ;  s.  c.  (N.  Y.)  290  (1841). 

16  Am.  Dec.  667.  *  Astor  v.  Roniayne,  1  Johns.  Ch. 

«  6  Heisk.  (Tenn.)  83  (1871).  (N.    Y.)  310  (1814).      It  would  be 

»  24  Gratt.  (Va.)  272  (1874).  otherwise,  however,  if  an  inviisioa 

*  Lansing  v.  Goelet,  9  Cow.   (N.  of    Ihe      immediate    neighborhood 

Y.)  346,  402  (1827).  where  the  property  is  situated  was 

<•  King  V.  Piatt,  37  N.  Y.  155,  160  imminent.    See  McGown  v.  Sanford, 

(1867) ;  8.  c.  35  How.  (N.  Y.)  Pr.  23.  9  Paige  Ch.  (N.  Y.)  290  (1841). 

See  1  Story  Eq.  Jur.  239. 


§483.]  OBDEB   STAYINQ   SALE.  CSS 

— >^  j 

unnecessarily  oppressive  in  his  proceedings,  the  sale  may  be 
set  aside.*  Thus,  where  the  sale  is  made  against  the  defen- 
dant's remonstrance  on  a  day  of  general  election,  or  on  a 
day  most  unfavorable  to  a  large  gathering  of  bidders,  and 
under  circumstances  which  give  rise  to  the  belief  that  free 
competition  was  obstructed,  the  sale  ought  not  to  stand. 
The  court  held  in  King  v.  Piatt,*  that  **  occupying  the  posi- 
tion of  advantage,  it  behooved  the  plaintiffs  to  pursue  their 
remedy  with  scrupulous  care,  lest  they  should  inflict  an 
injury  on  one  who  was  comparatively  powerless.  A  court 
of  equity  justly  scrutinizes  the  conduct  of  a  party,  placed  by 
the  law  in  a  position  where  he  possesses  the  power  to  sacri- 
fice the  interests  of  another,  in  a  manner  which  may  defy 
detection,  and  stands  ready  to  afford  relief  on  very  slight 
evidence  of  unfair  dealing,  whether  it  is  made  necessary  by 
moral  turpitude,  or  only  by  a  mistaken  estimate  of  others' 
rights." 

Chancellor  Walworth  held  in  the  early  case  of  McGown 
V.  Sandford,*  that  "it  is  the  duty  of  the  officer  entrusted 
with  the  sale  of  property,  under  a  judgment  or  decree  for 
the  payment  of  a  debt,  to  put  it  up  for  sale  at  such  a 
time  and  under  such  circumstances  as  to  make  it  bring  the 
best  price,  without  injuring  the  party  entitled  to  the  pro- 
ceeds of  the  sale  by  delaying  the  payment  of  his  debt.  And 
where  a  master,  or  other  officer  appointed  to  make  the  sale, 
in  violation  of  his  duty,  is  proceeding  to  sell  property  under 
a  decree  in  chancery  at  an  improper  time,  when  such  sale 
must  necessarily  sacrifice  the  property,  as  during  the  raging 
of  a  pestilence,  or  while  there  is  a  threatened  invasion,  which 
will  destroy  all  chance  of  fair  competition  by  deterring  bid- 
ders from  attending  the  sale,  it  will  unquestionably  be  the 
duty  as  well  as  the  right  of  this  court  to  interfere.  But 
the  court  of  chancery  has  no  legal  right  to  interfere  for  the 
relief  of  an  individual  by  arbitrarily  suspending  the  ordinary 


»  King  V.   Piatt,    37   N.   Y.   155  « 37  N.  Y.  155,   160  (1867) ;  s.  c. 

(1867) ;  8.  c.  35  How.  (N.  Y.)  Pr.  23.  35  How.  (N.  Y.)  Pr.  23. 

See  Kellogg  v.  Howell,  62  Barb.  (N.  »  9  Paige  Ch.   (N.   Y.)  290,   291 

Y.)  280  (1872).  (1841). 


584  OKDEK    STATmG    SALE.  [§  483. 

operation  of  the  laws  for  the  collection  of  debts  to  meet  his 
particular  case." 

In  an  action  to  foreclose  a  mortgage,  no  order  to  stay  the 
sale  shall  be  granted  or  made  by  a  judge  out  of  court, 
except  upon  a  notice  of  at  least  two  days  to  the  plaintiff's 
attorney.*  Consequently,  it  has  been  held  that  an  order  to 
show  cause,  made  by  a  judge  out  of  court,  and  returnable 
in  less  than  two  days,  is  irregular,  if  it  contains  a  stay  of 
proceedings  of  sale  under  a  judgment  for  foreclosure  and 
sale.'  It  has  been  said  that  if  a  subsequent  purchaser  desires 
the  prior  mortgagee  to  act  with  reference  to  the  order  of 
alienation  of  the  mortgaged  premises,  he  should  give  notice 
of  the  facts  to  such  mortgagee  in  proper  time,  and  request 
him  to  sell  accordingly.  If  he  is  not  a  party  to  the  proceed- 
ings for  foreclosure,  and  is  given  no  opportunity  therein  to 
present  his  equities,  he  may  file  a  bill  against  the  mortgagee, 
and  the  other  subsequent  purchasers,  where  there  are  any, 
staying  the  sale  until  their  respective  equities  can  be  adjusted. 
But  he  can  not  remain  passive  until  the  sale  has  been  made 
and  confirmed,  and  then  assert  his  rights  against  the  mort- 
gagee upon  an  allegation  of  facts  of  which  the  latter  had  no 
knowledge.* 

'  N.  Y.  Supreme  Court  Rule  67.  *  Lausman  v,  Drahos,  8  Neb.  457 

»  Asinari  v.  Volkening,  2  Abb.  (N.      (1879). 
Y.)  N.  C.  454  (1877). 


CHAPTER  XXIII. 


SALE  OF  MORTGAGED  PREMISES  IN  PARCELS. 

DISCEETION    OP    COURT  — WHEN   TO    BE   MADE  — PART   ONLY   DUE- 
SALE  FOR  AN  INSTALLMENT— STAYED  ON  PAYMENT- 
FUTURE  DEFAULTS. 


§  484, 


Sale  in  parcels — Discretion  of 
court. 

Sale  in  parcels  under  the 
New  York  Code. 

Determining  how  much  of 
premises  to  be  sold. 

Sale  to  be  made  so  as  to  pro- 
tect subsequent  liens  and 
equities. 

Sale  in  parcels — When  matter 
of  right. 

489.  Selling  in  parcels  when 
premises  described  in  one 
piece. 

Mortgagee  or  mortgagor  dic- 
tating order  of  sale. 

Discretion  of  officer  as  to 
selling  in  parcels. 


485. 


486. 


487. 


488. 


490. 


491. 


§  493.  Sale  of  premises  subdivided 
into  lots  after  execution  of 
mortgage. 

493.  Sale  of  moiety— Land  held 

by  tenants  in  common. 

494.  Sale  in  parcels  when    only 

part  of  mortgage  due. 

495.  Sale  of  portion  of  premises 

for  part  of  debt  due — Fail- 
ure to  pay  subsequent  in- 
stallments. 

496.  Petition  for  order  of  second 

sale — Reference  thereon  to 
compute  amount  due. 

497.  Order  for  second  sale. 

498.  Where    proceedings     stayed 

by  payment — Subsequent 
default. 


I  484.     Sale  in  parcels — Discretion  of  court. — On  the 

foreclosure  of  a  mortgage  the  court  is  not  bound  to  ascertain, 
whether  it  will  be  to  the  advantage  of  the  defendants  to  have 
the  mortgaged  premises  sold  in  separate  lots.*  But  the  prem- 
ises may  be  sold  in  one  piece  or  in  parcels,  as  the  court  may 
think  most  likely  to  bring  the  highest  price  ;^  and  on  proof 
that  a  sale  in  parcels  will  probably  be  injurious  to  the  interests 
of  the  defendants,  the  court  may  decree  the  sale  of  the 
whole  of  the  mortgaged  premises  in  one  parcel,  though  com- 
posed of  separate  and  distinct  tracts  or  lots.*  In  a  case  where 
the  whole  amount  of  the  mortgage  debt  was  not  due,  and  the 
premises  were  ample  security  for  the  amount  due,  with  costs, 


«  Jones  V.  Gardner,  57  Cal.  641  (1881). 
»  Macomb  v  Prentis,  57  Mich.  225  (1885). 
»  Firestone  v.  Klick,  67  Ind.  309  (1879). 
585 


586  SALE   IN    PARCELS OEDER    OF   COURT.        [§  484. 

but  the  land  could  not  be  sold  advantageously  in  parcels, 
and  the  whole  mortgage  debt  would  become  due  before 
there  could  be  a  sale  under  the  judgment,  the  court  held 
that  the  case  should  be  treated  as  though  the  whole  debt  were 
due.' 

Where  the  mortgaged  property  is  in  separate  parcels,  and 
the  amount  due  upon  the  mortgage  can  be  realized  by  a 
sale  of  one  or  more  of  the  parcels,  if  it  is  necessary  that  the 
property  should  all  be  sold  together,  in  order  to  protect 
the  rights  of  subsequent  incumbrancers,  the  sale  will  be  made 
in  that  manner;"  and  where  a  sale  of  a  part  of  the  premises 
is  made  in  accordance  with  the  directions  of  the  court, 
and  it  is  afterwards  made  to  appear  that  the  interests  of  the 
parties  require  the  sale  of  the  whole  property,  the  court  may 
make  a  supplementary  order  for  the  sale  of  the  remainder  of 
the  mortgaged  premises.*  And  where  the  decree  of  sale  directs 
that  the  whole  of  the  premises  be  disposed  of  for  the 
payment  of  installments  due,  it  is  within  the  discretion  of 
the  court  afterwards,  in  regulating  the  execution  of  its 
decree,  if  the  premises  can  be  divided  into  parcels,  to  direct 
a  sale  of  a  part  only.* 

If  the  order  to  sell  the  premises  as  a  whole,  or  in  parcels, 
be  erroneous,  the  party  aggrieved  may  ask  to  have  the 
order  amended.  This  should  be  done  by  motion,  as 
the  defect  can  not  be  taken  advantage  of  by  appeal.* 

Where,  in  a  decree  for  the  sale  of  mortgaged  premises, 
the  court  directs  that  the  land  shall  be  sold  together,  or  in 
parcels,  it  is  the  duty  of  the  sheriff  or  person  making 
the  sale  to  comply  strictly  with  such  order;  and  the 
parties  interested  can  not,  by  stipulation,  provide  for  a 
different  order,  although  one  of  the  defendants  might  be 
greatly  benefited  by  such  change.      It  is  to  be  presumed,  in 


'  Schreiber  v.  Carey,  48  Wis.  208  *  American  Life  &  Fire  Ins.  & 

^1879).  Trust  Co.  v.  Ryerson,  6  N.  J.  Eq. 

»  Gregory  v.  Campbell,  16  How.  (2  Halst.)  9  (1846). 

(N.  Y.)  Pr.  417  (1858).  =  Horner  v.  Corning,  28  N.  J.  Eq. 

»  Livingston  v.  Mildrum,  19  N.  Y.  (1  Stew.)  254  (1877). 
440  (1859);   DeForest  v.  Farley,  4 
Hun  (N.  Y.)  640  (1875). 


§  485.]  SALE   m   PARCELS   ITNDEE    CODK  5S7 

such  a  case,  that  the  court  made  its  order  with  a  view  to  the 
rights  of  all  parties,'  and  parties  holding  subsequent  interests 
will  have  a  right  to  insist  upon  a  compliance  with  the  order 
of  sale  as  made  by  the  court.' 

§  485.  Sale  in  parcels  under  the  New  York  Code. — 
The  New  York  Code  of  Civil  Procedure*  provides  that  "where 
a  mortgage  debt  is  not  all  due,  and  the  mortgaged  property  is 
so  circumstanced  that  it  can  be  sold  in  parcels  without  injury 
to  the  interests  of  the  parties,  the  final  judgment  must 
direct  that  no  more  of  the  property  be  sold,  in  the  first 
place,  than  is  sufficient  to  satisfy  the  sum  then  due, 
with  the  eosts  of  the  action  and  the  expenses  of  the  sale ; 
and  that  upon  a  subsequent  default  in  the  payment  of 
principal  or  interest,  the  plaintiff  may  apply  for  an  order 
directing  the  sale  of  the  residue,  or  of  so  much  thereof 
as  is  necessary  to  satisfy  the  amount  then  due,  with  the 
costs  of  the  application  and  the  expenses  of  the  sale.  The 
plaintiff  may  apply  for  and  obtain  such  an  order  as  often  as 
a  default  happens." 

But  where  "  it  appears  that  the  mortgaged  property  is  so 
circumstanced,  that  a  sale  of  the  whole  thereof  will  be  most 
beneficial  to  the  parties,  the  final  judgment  must  direct  that 
the  whole  property  be  sold ;  that  the  proceeds  of  the  sale, 
after  deducting  the  costs  of  the  action  and  the  expenses 
of  the  sale,  be  either  applied  to  the  satisfaction  of  the  whole 
sum  secured  by  the  mortgage,  with  such  a  rebate  of  interest 
as  justice  requires,  or  be  first  applied  to  the  payment  of  the 
sum  due,  and  the  balance,  or  so  much  thereof  as  is  necessary, 
be  invested  at  interest  for  the  benefit  of  the  plaintiff,  to  be 
paid  to  him  from  time  to  time,  as  any  part  of  the  principal 
or  interest  becomes  due."  Section  1 678  of  the  New  York  Code 
of  Civil  Procedure,  regulating  sales  upon  foreclosure,  pre- 
scribes only  a  rule  of  proceeding  to  render  the  judgment  of 
foreclosure  available  ;  and  therefore  the  amendment  of  1881,* 


«  Babcock  v.   Perry,   8  Wis.  277  » N.  Y.  Code  Civ.  Proc.  §§  1636, 

(1859).  1637. 

*  Farmers'  &  Millers'  Bank  of  ilil-  *  Laws  of  1881,  chap.  683. 
waukee  v.  Luther,  14  Wis.  96  (1861). 


588  SALE   IN    PARCELS    UNDER    CODE.  [§485. 

allowing  two  or  more  buildings  situated  on  the  same  city- 
lot  to  be  sold  together,  is  effectual  pursuant  to  its  provisions 
to  render  valid  sales  previously  made,  which  would  be  lawful 
according  to  its  terms.' 

These  provisions  of  the  Code  of  Civil  Procedure  simply 
declare  the  rules  and  formulate  the  principles  by  which 
courts  of  equity,  without  statutory  provisions,  are  neces- 
sarily governed  in  foreclosure  suits;*  the  statute  merely 
establishes  by  legislative  enactment  the  rules  which  already- 
prevailed  in  such  cases.* 

It  has  been  held,  however,  that  the  provisions  of  the 
statute  regarding  sales  in  parcels  are  merely  directory,  and 
that  a  sale  made  in  disregard  of  such  provisions  is  not 
void,  but  only  voidable,  if  an  application  is  made  for  relief 
within  a  reasonable  time  by  the  party  aggrieved.  But  such 
party  may  waive  the  irregularity  of  the  sale  by  express 
ratification,  or  by  neglecting  to  take  exceptions  to  it  within 
a  reasonable  time.* 

It  was  held  by  the  court  in  Wallace  v.  Feely,'  that  "  The 
question  is  whether  this  provision  is  directory  merely,  as 
the  provision  in  the  former  statute  regulating  judicial  sales 


'  Wallace  V.  Feely,  10  Daly  (N.  Y.)  *  Cunnini^ham  v.  Cassidy,    17  N. 

331(1882).  Y.    276    (1858).      See    Slierman  v. 

'  Cunningham  v.   Cassidy,  17  N.  Willett,  42  N.  Y.   146  (1870) ;  Ells- 

Y.)  276  (1858) ;  s.  c.  7  Abb.  (N.  Y.)  worth  v.  Lockwood,  42  N.   Y.   89 


Pr.  183.  See  Livingston  v.  Mil 
drum,  19  K  Y.  440,  443  (1859) 
Campbell  v.  Macomb,  4  Johns.  Ch 
(N.  Y.)  534  (1820);  Magruder  v 
Eggleston,    41    Miss.    284    (1866) 


(1870);  Husted  v.  Daldn,  17  Abb. 
(N.  Y.)  Pr.  137  (1857) ;  Griswold  v. 
Fowler,  4  Abb.  (N.  Y.)  Pr.  238 
(1857) ;  Merchants'  Ins.  Co.  v.  Hin- 
man,  3  Abb.  (N.  Y.)  Pr.  455  (1856) ; 


American  Life  &  Fire  Ins.  &  Trust  Wells  v.    Wells,   47  Barb.  (N.  Y. ) 

Co.    V.   Ryerson,   6   N.    J.    Eq.    (2  416  (1867) ;  Lamerson  v.  Marvin,  8 

Halst.)  9  (1846) ;   Wilmer  v.  Atlanta  Barb.  (N.  Y.)  9  (1850) ;  Wolcott  v. 

&  R.  A.  L.  R.  Co.,  2  Wood  C.  C.  447  Schenck,  23  How.  (N.  Y.)  Pr.  385 

(1875).  (1862);    Ames    v.    Lockwood,    13 

»  Cunningham  v.  Cassidy,  17  N.  How.  (N.  Y.)  Pr.  555  (1856);  Woods 

Y.    276    (1858).     See    Campbell   v.  v.  Mouell,  1  Johns.  Ch.  (N.  Y.)  503 

Macomb,  4  Johns.  Ch.  (N.  Y.)  534  (1815);  American  Ins.  Co.  v.  Oakley, 

(1820) ;  Lyman  v.  Sale,  2  Johns.  Ch.  9  Paige  Ch.  (N.  Y.)  259  (1841) ;  s.  c. 

(N.  Y.)  487  (1817) ;  Brinckerhoff  v.  38  Am.  Dec.  561. 

Thallhimer,  2  Johns.  Ch.  (N.  Y.)  486  M  N.  Y.   Civ.    Proc.    Rep.    126 

(1817).     See  post  %  489.  (1881). 


§  486.]  HOW    MUCH   TO    BE    SOLD.  589 

\ 

was  held  to  be.*  That  statute  enacted  that  if  the  premises 
consist  of  distinct  buildings,  they  shall  be  sold  separately. 
The  reason  of  the  codifiers  for  substitutinsf  *  must  *  for 
*  shall '  is  not  apparent ;  they  give  no  explanation  in  their 
note  to  the  section.  The  substituted  word  is  more  impera- 
tive than  that  which  it  replaces.  As  verbal  alterations 
occur  frequently  in  the  new  Code  without  apparent  reason, 
the  change  in  question  loses  much  of  its  significance.  The 
reasons  for  holding  the  former  enactment  to  be  directory 
merely  are  applicable  in  every  respect  to  the  new.  No 
different  construction  could  be  adopted  without  doing,  in 
certain  cases,  a  great  injury." 

§  486.     Determining  how  much  of  premises  to  be  sold. 

— On  an  order  of  reference  in  a  mortgage  foreclosure,  the 
first  duty  of  the  referee,  aside  from  computing  the  amount 
due  on  the  mortgage,  is  to  ascertain  whether  the  mortgaged 
premises  are  so  circumstanced  that  they  can  be  sold  in  parcels 
without  injury  to  the  interests  of  the  parties.  A  sale  of  the 
whole  premises  in  one  parcel  can  be  most  beneficial  to 
the  parties  only  when  the  mortgagee  will  receive,  and  the 
mortgagor  will  be  able  to  pay,  from  the  proceeds  thereof, 
the  largest  amount  of  the  mortgage  debt,  or  when  the  sale 
will  leave  the  largest  surplus  after  the  payment  of  the  whole 
debt.  The  benefits  intended  by  the  statute  should  be  com- 
mon to  both  parties. 

But  the  report  of  the  referee,  in  regard  to  the  manner  of 
sale,  is  only  a  part  of  the  evidence  before  the  court,  upon 
which  it  should  decide  whether  it  will  or  will  not  be  most 
beneficial  to  the  parties  to  decree  a  sale  of  the  whole 
premises  in  one  parcel  in  the  first  instance.  The  court  may 
look  to  the  pleadings  and  receive  other  evidence  in  its 
discretion  ;  it  may  also  consider  the  stipulations,  offers  or 
admissions  of  any  of  the  parties  on  the  hearing."  In 
determining  whether  the  premises  shall  be  sold  together  or 
in  parcels,  the  court  should  take  into  consideration  the 
interests   of    the   parties    having   equities   subject    to    the 


»  Cunningham  v.  Cassidy,   17  N.  *  Gregory  v.  Campbell,   16  How. 

Y.  276  (1858).  (N.  Y.)  Pr.  417  (1858). 


590  SALE    so    AS   TO   PEOTECT   JUiHOR    LIEXS.      [§  487. 

mortgage,  and  direct  the  sale  to  be  made  in  such  a  manner 
that  the  rights  of  no  party  interested  will  be  prejudiced  by 
the  order  of  the  sale.' 

§  487.  Sale  to  be  made  so  as  to  protect  subsequent 
liens  and  equities. — A  mortgage  foreclosure  sale  is  not  for  the 
benefit  of  the  complainant  alone,  but  for  the  benefit  of  all 
the  parties  who  are  before  the  court ;  and  where  the  com- 
plainant in  such  a  suit  makes  a  junior  mortgagee  of  the 
premises  a  party,  the  court  may  make  a  decree  directing 
the  sale  of  so  much  of  the  mortgaged  premises  as  will  be 
sufficient  to  satisfy  the  amount  due  on  such  junior  mort- 
gage and  on  intermediate  incumbrances,  in  addition  to  the 
amount  due  on  the  complainant's  mortgage,  besides  the  costs 
of  the  action.  But  it  is  said  that  before  such  junior  mort- 
gage can  be  paid,  the  report  of  the  referee,  or  other 
officer  making  the  sale,  must  be  filed  and  the  surplus 
moneys  brought  into  court,  so  that  interested  persons,  who 
have  not  been  made  parties  to  the  suit,  may  have  an  oppor- 
tunity to  file  their  claims  to  such  surplus  money.* 

It  is  the  duty  of  the  court  in  decreeing  a  foreclosure  of 
the  mortgaged  premises,  to  provide  that  only  so  much 
thereof  shall  be  sold,  and  in  such  a  manner,  as  that  the  parties 
having  equities  subject  to  the  primary  lien  will  not  be 
prejudiced  thereby.  This  power  may  be  exercised  as  long 
as  the  subject  matter  and  the  parties  remain  under  the 
jurisdiction  of  the  court.*  But  where  the  court  has  failed 
in  a  decree  of  foreclosure  to  protect  the  equitable  rights  of 
the  parties  before  it,  it  may  supply  the  defect  independently 
of  the  statute  by  a  supplementary  order;*  and  this  may  be 
done  even  after  a  portion  of  the  premises  sufficient  to  satisfy 
the  primary  lien  has  been  sold.* 


'  Livingston  v.  Mildrum,   19   N.  '  Livingston  v.  Mildrum,  19  N.  T. 

Y.  440  (1859).     See  DeForest  v.  Far-  440  (1859).    See  DeForest  v.  Farley, 

ley,  62  N.  Y.  628  (1875) ;  Malcolm  62  N.   Y.    628  (1875) ;   Malcolm  v. 

V.    Allen,    49    N.    Y.    448    (1872) ;  Allen,  49  N.  Y.  448  (1872). 

Beekman  v.  Gibbs,  8  Paige  Ch.  (X.  *  Malcolm  v.  Allen,  49  N.  Y.  448 

Y.)  511  (1840) ;  Blazey  v.  Delius,  74  (1872) ;  Livingston  v.  Mildrum,   19 

111.  299  (1874).  N.  Y.  440  (1859). 

'  Beekman  v.  Gibbs,  8  Paige  Ch.  *  Livingston  v.  Mildruxa,  19  N.  Y. 

(N.  Y.)  511  (1840).  490  (1859). 


§  488.]    WHEN  SALE  IN  PAEOELS  MATTER  OF  EIGHT.         591 

§  488.  Sale  in  parcels— When  matter  of  right.— In  a 
mortgage  foreclosure  the  plaintiff  is  entitled  to  the  sale  of 
a  sufficient  amount  of  land  to  pay  his  claim  and  the  costs 
of  the  suit,  and  no  more  ;*  and  the  sale  should  be  made  by 
the  officer  conducting  it  in  such  a  manner  as  to  pay  the  just 
demands  of  the  plaintiff  without  inflicting  unnecessary  loss 
upon  the  debtor,  or  interfering  with  the  rights  and  interests 
of  subsequent  incumbrancers.* 

It  is  a  well  settled  principle  of  law,  irrespective  of  any 
statute,  that  where  a  tract  of  mortgaged  land  has  been 
laid  out  in  parcels  for  separate  and  distinct  enjoyment,  it 
should  be  sold  in  parcels  on  a  decree  of  foreclosure.*  This 
general  rule  is  said  to  rest  upon  the  reasonable  presumption, 
sanctioned  alike  by  observation  and  experience,  that  such 
property  will  realize  more  when  sold  in  parcels  than  in  one 
piece,  because  of  the  fact  that  such  sale  will  better  corres- 
pond to  the  probable  wants  of  the  purchasers.* 

Aside  from  statutory  regulations  touching  the  matter,  it 
is  the  primary  duty  of  the  officer  making  the  sale  to  adopt 
such  a  mode  of  sale  as  will  probably  realize  the  largest 
amount,  and  to  exercise  his  best  judgment  in  determining 
how  that  end  can  be  best  accomplished ;  a  sale  in  a  different 
manner  may  be  a  sufficient  reason  for  avoiding  the  sale,  if 
the  price  received  is  disproportionate  to  the  actual  value 
of  the  premises.* 


»  Ellsworth  V,  Lockwood,  42  K  502  (1815) ;  Mahone  v.  Williams,  39 

Y.  89  (1870) ;  Hewson  v.  Deygert,  8  Ala.  202  (1863) ;  Rowley  v.  Brown, 

Johns.   (N.   Y.)  333   (1811);    Tier-  1  Bin n.  (Pa.)  61  (1803) ;  Stead's  Exrs. 

nan  V.  Wilson,   6  Johns.  Ch.   (N.  v.  Course,  8  U.  S.  (4  Cr.)  403(1808); 

Y.)  411  (1822) ;  Jenks  v.  Alexander,  bk.  2  L.  ed.  660. 
11  Paige  Ch.  (N.  Y. )  619  (1845) ;         *  It  has  been  held  that  if  there  is 

Mohawk  Bank  v.  Atwater,  2  Paige  no  division  of  the  tract  into  parcels, 

Ch.  (N.  Y. )  61  (1830);  O'Donnell  adapted   for   separate  and   distinct 

V.  Lindsay,  39  N.  Y.  Supr.  Ct.  (7  J.  enjoyment,  it  is  generally  reasonable 

&  S.)  623,  530  (1873).  that  the  defendant  should  show  to  the 

•  Woodhull  V.  Osborne,  2  Edw.  referee,  or  other  officer  selling,  by  a 
Ch.  (N.  Y.)  614  (1830).  map  or  diagram,  or  in  some  other 

*  Wolcott  V.  Schenck,  23  How.  intelligible  manner,  the  distinct  par- 
(N.  Y.)  Pr.  385  (1863) ;  Hewson  v.  eels  into  which  the  land  might  be 
Deygert,  8  Johns.  (N.  Y.)  333  (1811);  profitably  divided  for  sale.  See 
Wood  v.Monell,!  Johns.  Ch.(N.Y.)  Woodhull  v.  Osborne,  2  Edw.  Ch, 


592 


PREMISES   DESCRIBED    IN    ONE    PIECE. 


[§  489. 


§  489.  Selling  in  parcels  when  premises  described  in 
one  piece. — And  the  rule  as  to  selling  in  parcels  is  the  same, 
whether  the  land  is  desciibed  in  the  mortgage  in  parcels  or 
as  one  piece.'  It  seems,  however,  that  if  the  premises  are 
described  in  the  mortgage  as  one  tract,  the  referee,  or 
ofKicer  making  the  sale,  is  not  bound  to  sell  them  in  parcels  ;" 
but  where  the  premises  are  so  situated  that  he  can  sell  in 
parcels  without  injury  to  the  interests  of  any  of  the  parties, 
he  may  properly  do  so.'  And  it  has  been  held,  where  mort- 
gaged premises  consist  of  two  or  more  parcels  of  land  which 
have  previously  been  held,  used  and  conveyed  together, 
that  a  sale  of  the  whole  in  one  parcel  will  be  valid.* 

The  provisions  of  the  Code  of  Civil  Procedure  regulating  this 
matter  are  simply  declaratory  of  the  law  on  the  subject,  as 
the  same  was  enforced  by  the  courts  of  chancery  before  the 
enactment  of  the  statute.*  The  object  of  the  statute,  as  well 
as  of  the  chancery  rule,  is  to  insure  from  the  sale  of  the 


(K  Y.)  614  (1830) ;  Wood  v.  Monell, 
1  Johns.  Ch.  (N.  Y.)  502  (1815). 

*  Mahone  v.  Williams,  39  Ala. 
202  (1863) ;  Gray  v.  Shaw.  14  Mo. 
341  (1851);  Stull  v.  Macalester,  9 
Ohio,  19,  24  (1839) ;  Ord  v.  Noel,  5 
Madd.  488  (1820). 

But,  "a  mere  error  of  judgment 
in  the  selection  of  a  mode  of  sale, 
whereby  some  injury  may  probably 
have  resulted,  ought  not  to  be  any 
ground  for  the  avoidance  of  a  sale. 
If  it  were,  all  certainty  and  stability 
would  be  stripped  from  such  sales, 
and  their  validity  would  depend 
upon  mere  vague  speculation.  The 
rule  which  we  have  deduced  from 
Chancellor  Kent's  opinion  [see  Wood 
V.  Monell,  1  Johns.  Ch.  (N.  Y.)  502 
(1815);  Woodhull  v.  Osborne,  2 
Edw.  Ch.  (N.  Y.)  614(1830)],  is  a 
general  one,  adopted  because  it  will 
lead,  usually,  to  a  correct  solution 
of  the  question  whether  a  sale  should 
be  by  parcels,  and  is  designed  to 
aid  in  determining  whether  a  sale 


should  be  avoided,  because  it  was  not 
made  in  that  manner."  Mahone  v. 
Williams,  39  Ala.  202,  218  (1863). 

'  Ellsworth  v.  Lockwood,  43  N. 
Y.  89  (1870).  See  Hewson  v.  Deygert, 
8  Johns.  (N.  Y.)333  (1811);  Tiernan 
v.  Wilson,  6  Johns.  Ch.  (N.  Y.)  411 
(1822);  Jencks  v.  Alexander,  11 
Paige  Ch.  (N.  Y.)  619  (1845); 
Mohawk  Bank  v.  Atwater,  2  Paige 
Ch.  (N.  Y.)  54,  61  (1830). 

*  Sherman  v.  Willett,  42  N.  Y. 
146,  150  (1870) ;  Griswold  v.  Fowler, 
24  Barb.  (N.  Y.)  135  (1857) ;  s.  c.  4 
Abb.  (N.  Y.)  Pr.  238  ;  Lamerson  v. 
Marvin,  8  Barb.  (N.  Y.)  9  (1850). 

3  Sherman  v.  Willett,  42  N.  Y. 
146,  150  (1870). 

•*  Anderson  v.  Austin,  34  Barb. 
(N.  Y.)  319  (1861). 

^  Campbell  v.  Macomb,  4  Johns. 
Ch.  (N.  Y.)  534  (1820)  ;  Lyman  v. 
Sale,  2  Johns  Ch.  (N.  Y.)  487  (1817); 
Brinckerhoff  v.  Thallhimer,  2  Johns*. 
Ch.  (N.  Y.)  486  (1817).  See  ante 
§485. 


§  490.]    MOETGAGOR   DICTATING    OEDEE   OF    SALE.  593 

property  the  largest  possible  sum  of  money  ;  and  a  sale  in 
parcels  is  generally  best  for  the  interests  of  all  parties  con- 
cerned, because  it  tends  to  accommodate  the  wants  of  the 
bidders  and  to  promote  competition.* 

The  practice  of  selling  several  distinct  parcels  of  land  as 
one  piece  and  of  offering  an  entire  tract  at  one  time,  when  a 
portion  of  it  would  be  sufificient  to  satisfy  the  judgment 
without  detriment  to  the  interests  of  any  of  the  parties  to 
the  suit,  has  been  uniformly  condemned  by  the  courts  as 
tending  to  the  sacrifice  of  the  property  and  to  the  oppres- 
sion of  the  debtor.' 

§  490.  Mortgagee  or  mortgagor  dictating  order  of 
sale. — In  determining  the  order  of  sale  the  question  always 
is,  what  method  of  sale  will  produce  the  best  result.  In  decid- 
ing this  much  necessarily  depends  upon  the  circumstances 
of  each  particular  case.  The  plaintiff  has  a  right  to  have  his 
lien  protected  in  the  fullest  manner  possible  ;  and  if  the 
property  is  of  doubtful  value,  and  he  acts  in  good  faith 
and  no  party  in  interest  is  willing  to  furnish  him  additional 
security,  he  may  properly  be  allowed  to  designate  the 
manner  in  which  the  sale  shall  be  made.*  But  where  the 
land  is  ample  security,  the  desires  and  preferences  of  the 
owner  of  the  equity  of  redemption  will  be  entitled  to 
the  fullest  consideration  from  the  referee  or  officer  making 
the  sale.* 

In  King  v.  Piatt,'  the  decree  of  foreclosure  directed 
the  sale  of  certain  lots  in  New  York  city ;  the  defendant 
mortgagor  presented  a  written  request  to  the  referee  to  have 
the  corner  lot,  which  was  the  most  valuable,  sold  first ;  the 


>  See  Wood  v.  Monell,  1  Johns.  *  Griswold  v.   Fowler,   24   Barb. 

Ch.  (N.  Y.)  503  (1815).  (N.  Y.)  135  (1857) ;  Brown  v.  Frost, 

'Griffith    V.    Hadley,    10    Bosw.  Hoff.  Ch.  (N.  Y.)  41,  43  (1839). 

(N.Y.)  587  (1862).    See  Cunningnam  -i  Walworth  v.  Farmers'  Loan  «& 

V.  Cassidy,17N.  Y.  276  (1858) ;  s.  c.  Trust  Co.,  4  Sandf.  Ch.  (N.  Y.)  51 

7  Abb.  (N.  Y.)  Pr.  183^   Jackson  (1846).     SeeEllsworth  v.  Lockwood, 

V.  Newton,  18  Johns.  (K  Y.)  355,  43  N.  Y.  89  (1870). 

363(1830);    Tiernan  v.  Wilson,    6  *  37  N.  Y.  155(1867)  ;  s.  c.  3  Abb. 

Johns.  Ch.  (N.  Y.)  411,  414  (1833) ;  (N.  Y.)  Pr.  N.  S.  434  ;  35  How.  (N. 

"Wood  V.  Monell,  1  Johns.  Ch.  (K  Y.)  Pr.  23. 
T.)  503  (1815). 

(33) 


594  MOETGAGOE  DICTATLNG   ORDER   OF   SALE.     [§491. 

referee  disregarded  this  request  and  directed  the  sale  to 
proceed  in  a  different  manner.  It  appearing  that  the  request 
was  made  in  good  faith  and  in  the  belief  that  it  would 
increase  the  amount  realized  from  the  sale  of  the  property, 
and  no  satisfactory  reason  for  denying  the  request  being 
shown  by  the  referee,  the  sale  was  set  aside  and  a  resale 
ordered. 

The  mortgagee  can  only  demand  that  the  usual  terms  of 
sale  as  to  the  time  of  the  payment  of  the  purchase  money, 
or  so  much  thereof  as  is  necessary  to  discharge  his  debt  and 
the  costs  of  suit,  be  not  departed  from  without  special 
reasons.* 

And  it  has  been  held,  where  a  party  directly  interested  in 
the  price  which  the  property  to  be  sold  should  bring,  makes 
a  reasonable  request  as  to  the  order  in  which  the  parcels 
shall  be  sold,  with  a  view  of  enhancing  the  price  for  which 
the  property  may  sell,  and  the  request  is  disregarded  without 
an  apparently  good  cause,  that  the  court  will  be  justified  in 
setting  the  proceedings  aside  and  in  ordering  a  new  sale  ;* 
and  in  a  case  where  the  mortgaged  premises,  which  were 
clearly  worth  more  than  the  mortgage  debt  and  the  costs  of 
the  suit,  had  been  laid  out  into  city  lots,  the  decree  of  fore- 
closure and  sale  allowed  the  owners  of  the  equity  of  redemp- 
tion to  direct  the  order  in  which  the  lots  should  be  sold.' 

§  491.    Discretion  of  officer  as  to  selling  in  parcels. — 

The  provisions  of  the  Code  of  Civil  Procedure  leave  the 
question  as  to  whether  the  mortgaged  premises  shall  be 
sold  as  a  whole,  or  in  parcels,  in  the  discretion  of  the  officer 
making  such  sale,  in  case  the  court  does  not  in  the  decree, 
direct  the  manner  in  which  the  sale  shall  be  made.  In  some 
cases  the  facts  will  be  such  that  the  officer  will  be  called 
upon  to  exercise  a  discretion,  which  is  judicial  in  its  nature,* 
in  which  case  an  honest  exercise  of  that  discretion  will  be  as 


"  Brown  v.  Frost,  Hoff.  Ch.  (N.  »  Walworth  v.  Farmers'  Loan  «& 

T.)  41  (1839) ;  Vandercook  v.  Co-  Trust  Co.,"4  Sandf.  Ch.  (N,  Y.)  51 

hoe's  Savings  Institute,  5  Hun  (N.  (1846). 

T.)  641  (1875).  '•Where   the   decree    directs   the 

•  King  V.   Piatt,    37   N.  T.    155  referee  or  officer  making  the  sale,  ta 

(1867).  inquire  and  ascertain  in  what  order 


§491.]   DISCRETION  OF  EEFEREE SALE  IN  PAEOELS.       595 

final  as  the  action  of  any  judicial  tribunal.'  In  those  cases 
in  which  it  is  proper  for  the  officer  making  the  sale,  to 
determine  whether  the  property  shall  be  sold  in  parcels, 
it  seems  that  the  parties  to  the  action  are  entitled  to  what- 
ever possible  benefit  might  follow  from  the  judicious 
exercise  of  that  discretion.'  And  it  seems  that  where  the 
officer  making  the  sale,  instead  of  exercising  his  discretion, 
relies  upon  the  purchaser  for  his  information,  the  sale  may 
be  treated  as  invalid.* 

Thus,  it  has  been  held  where  the  mortgaged  premises 
are  contiguous  and  adjoining  and  appear  always  to  have 
been  controlled  by  a  single  person,  that  it  is  in  the  sound 
discretion  of  the  referee  conducting  the  sale  of  such  premises 
on  a  mortgage  foreclosure  to  sell  the  same  in  one  piece  or  in 
parcels,  and  that  the  careful  and  honest  exercise  of  such 
discretion  will  not  be  disturbed  by  the  court  directing  the 
sale.* 

Whether  the  property  on  a  mortgage  foreclosure  sale  is 
to  be  sold  as  an  entirety  or  in  parcels,  is  in  some  cases 
determined  by  the  court — generally  through  a  referee — while 
in  other  cases  it  is  left  to  the  discretion  of  the  officer 
making  the  sale.  When  the  method  of  sale  is  determined 
by  the  court,  the  order  of  sale  sometimes  directs  the  form 
and  manner  of  the  division  of  the  property,  and  designates 
the  order  in  which  the  parcels  shall  be  offered  for  sale.* 

The  order  of  the  sale  may  be  based  upon  the  facts  shown 
at  the  hearing,  or  upon  the  consent  of  the  parties ;'   and 


the  different  parcels  of  the  mortgaged  (1873);  Russell  v.  Conn,  20  N.  Y.  83 

premises  should  be  sold  under  the  de-  (1859). 

cree,  in  order  to  protect  the  equitable  *  O'Donnell  v.  Lindsay,  39  N.  Y. 

rights  of  the  several  persons  claiming  Supr.  Ct.  (7  J.  &  8.)  523,  530  (1873). 

to  have  interests  therein,  or  liens  on  *  Whitbeck  v.  Rowe,  25  How.  (N. 

the  respective  parcels,  such  referee  Y.)  Pr.  403  (1862).     See  Waldo  v. 

or  other  officer,  in  determining  this  Williams,  3  111,  (2  Scam.)  470  (1840); 

question,  acts  as  a  quasi  judge  of  Benton  v.  Wood,  17  Ind.  260  (1861) ; 

the  court.     Snyder  v.  Stafford,  11  White  v.  Watts,  18  Iowa,  74  (1864) ; 

Paige  Ch.  (IST.  Y.)  71  (1844).  Lay  v.  Gibbons,  14  Iowa,  377  (1862). 

1  O'Donnell  v.  Lindsay,  39  N.  Y.  » Bard  v.  Steele,  3  How.  (N.  Y.) 

Supr.  Ct.  (7  J.  &  S.)  529  (1873).  Pr.  110  (1847);    Cissna  v.  Haines,  18 

»  O'Donnell  v.  Lindsay,  39  K  Y.  Ind.  496  (1862) ;  Brugh  v.  Darst,  16 

Supr.  a.    (7  J.   &  S. )   523,    530  Ind.  79  (1861). 


596  SUBDIVIDING    AFTER    MORTGAGING.  [§  492. 

where  an  order  is  once  made,  it  will  not  be  disturbed  without 
good  cause  therefor  being  first  shown.'  Where  the  statute 
directs  that  only  so  much  of  the  mortgaged  premises  shall 
be  sold  as  will  pay  the  amount  due  to  the  plaintiff  and  the 
costs  of  the  suit,  if  a  division  of  the  property  into  parcels  is 
possible,  the  statute  will  control  the  case,'  the  court  being 
required  simply  to  determine  whether  the  property  can  be 
subdivided  without  injury  to  the  parties  in  interest. 

§  492.    Sale  of  premises  subdivided    into    lots    after 
execution  of  mortgage, — Where  lands  have  been  mortgaged 
as  an  undivided  tract  or  parcel,  and  are  subsequently  cut 
up   into  lots   for  the   convenient   occupation   of  the   mort- 
gagor, or  for  the  purpose  of  sale,  the  mortgagor  will  have 
no  right  upon  foreclosure  to  insist  that  the  mortgagee  shall 
sell  the  premises  in  lots,  according  to  the  map,  instead  of 
selling  the  whole  as  one  undivided  tract  according  to  the 
description  contained  in  the  mortgage,'  because  by  the  terms 
of  the  mortgage  the  w^hole  premises  are  pledged   for  the 
,  payment    of    the    mortgage    debt,    and    the    contract    of 
ithe  parties  is,  that  in  case  of  non-payment,  the  whole  land 
I  shall  be  sold ;  and  no  court  has  any  power  to  alter  or  impair 
that  contract  in  any  particular,  or  to  direct  that  only  a  part 
of  the  land  shall  be  sold,  and  that  the  remainder  shall  be  given 
laway  or  dedicated  to  the  public.     The  mortgagor  can  not, 
by  laying  out  the  mortgaged  premises  in  village  lots,  bounded 
upon  and  intersected  by  streets,  withdraw  from  the  lien  of 
the  mortgage  the  land  included  in  the  streets.* 


« Cord  V.  Southwell,  15  Wis.  211  v.  Lockwood,  43  K  Y.  89  (1870) ; 

(1862).  Lane  v.  Conger,  10  Hun  (N.  Y.)  1 

'  Vaughn  v.  Nims,  36  Mich.  297  (1877) ;  Ellsworth  v.  Lockwood,   9 

(1877).  Hun  (N.  Y.)  548  (1877). 

*  Bank  of  Ogdensburg  v.  Arnold,  *  Griswold  v.   Fowler,   24   Barb. 

5  Paige  Ch.  (N.  Y.)  38  (1835).  (N.  Y.)  135  (1857) ;  s.  c.  4  Abb.  (N. 

»  Griswold  v.  Fowler,   24  Barb.  Y.)  Pr.  238.     See  Hubbell  v.  Sibley, 

(N.   Y.)  135  (1857) ;    8.  c.  4  Abb.  5  Lans.  (N.  Y.)  51  (1871) ;  Lane  v. 

(N.    Y.)    Pr.    238;     Lamerson    v.  Conger,  10  Hun  (N.  Y.)  1  (1877); 

Marvin,  8  Barb.  (N.  Y.)  9  (1850) ;  Ellsworth  v.  Lockwood,  9  Hun  (N. 

Hubbell  V.  Sibley.  5  Lans.  (N.  Y.)  Y.)  548  (1877). 
51  (1871),   distinguishing  Ellsworth 


§§  493-494.]    SALE  OF  molety — tenants.  597 

§  493.  Sale  of  moiety— Land  held  by  tenants  in  com- 
mon.— Where  land  is  held  by  tenants  in  common,  and  they 
unite  in  executing  a  joint  mortgage  to  secure  a  joint  and 
several  debt,  one  of  them  can  not  compel  the  mortgagee  to 
receive  half  the  debt  and  to  proceed  against  his  co-tenant's 
moiety  for  the  collection  of  the  other  half  of  the  mortgage 
debt ;  and  this  is  true,  notwithstanding  he  may  tender  a  suffi- 
cient bond  of  indemnity  against  eventual  loss.  And  on  a 
foreclosure  of  the  mortgage  against  both  mortgagors, 
a  decree  will  not  be  made  for  a  sale  of  the  undivided  moieties 
separately  for  the  respective  half  parts  of  the  debt.' 

But  it  seems  that  where  tenants  in  common  mortgage 
their  land  for  a  joint  debt  and  afterwards  make  a  partition 
of  the  land,  each  half  will  be  chargeable  primarily  with  one- 
half  of  the  debt  and  one-half  of  the  costs  of  the  suit.*  This 
is  presumably  on  the  principle  that  equity  will  require  each 
portion  of  the  mortgaged  premises  to  bear  its  own  propor- 
tion of  the  mortgage  debt. 

Where  the  owner  of  an  undivided  half  of  real  estate  mort- 
gaged the  same,  and  the  land  was  afterwards  partitioned, 
it  was  held  that  the  portion  of  the  land  set  off  to  the  mort- 
gagor must  first  be  sold.  In  such  a  case,  where  the  officer 
making  the  sale  was  tendered  the  whole  amount  of  the  debt 
and  costs,  for  which  sale  was  directed  to  be  made  of  the 
undivided  half  set  off  to  the  mortgagor,  but  refused  such  bid 
and  sold  the  whole  mortgaged  premises,  the  court  set  the 
sale  aside.*  The  equitable  effect  of  the  sale  of  an  undivided 
one-half  of  mortgaged  premises  by  the  mortgagor,  and  the 
payment  of  the  purchase  money  to  him,  is  to  cast  the  burden 
of  the  payment  of  the  mortgage  debt  primarily  on  the 
remaining  half,  if  that  is  sufficient  to  pay  the  incumbrance.* 

§  494.  Sale  in  parcels  when  only  part  of  mortgage 
due. — The  Code  of  Civil  Procedure  provides  that  where  a 
part  only  of  the  mortgage  debt  has  become  due,  and  the 


•  Frost  V.  Frost,  8  Sandf .  Ch.  (N.  »  Quaw  v.  Lameraux,  36  Wis.  626 
T.)  188  (1846).  (1875). 

•  Rathbone  v.  Clarke,  9  Paige  Ch.  *  Schrack  v.  Shriner,  100  Pa.  St 
(N.  Y.)  648  (1842).  451  (1882). 


598  SALE    WHEN    PAET   OF   MOETGAGE   DUE.       [§494. 

mortgaged  property  is  so  situated  that  it  can  be  sold  in 
parcels  without  injury  to  the  interests  of  the  parties,  the 
final  judgment  must  direct  that  no  more  of  the  property  be 
sold,  in  the  first  place,  than  will  be  sufficient  to  satisfy  the 
sum  due  with  the  costs  and  expenses  of  the  sale.*  The  fact 
that  the  premises  are  a  meager  security  for  the  debt  and  are 
depreciating  in  value  for  want  of  proper  care,  will  not 
justify  a  sale  of  the  entire  premises  for  a  debt,  only  a  portion 
of  which  is  due.'  It  seems  that  under  such  circumstances, 
in  order  to  secure  a  sale  of  the  whole  property,  it  is  necessary 
that  it  should  be  alleged  in  the  pleadings  and  decided  by  the 
court  that  the  premises  can  not  be  divided  without  manifest 
injury  to  the  parties  concerned.'  If  a  part  only  of  the  debt 
is  due  and  the  premises  are  so  situated  that  they  can  not  be 
divided,  the  whole  premises  should  be  directed  to  be  sold  * 
and  the  decree  should  provide  for  the  payment  of  the  money 
to  the  mortgagee  for  the  extinction  of  the  debt,  unless  some 
safe  course  more  beneficial  to  the  mortgagor  is  suggested  to 
the  court.' 

Where  there  is  a  sale  of  the  whole  premises  for  an  install- 
ment due,  such  sale  exhausts  the  remedy  of  the  mortgagee 
and  passes  a  clear  title  to  the  purchaser,'  because,  as  against 


'  N.  Y.  Code  Civ.  Proc.  §  163G ;  v.  Redwood,  9  Port.  (Ala.)  70,  96 

Long  V.  Lyons,  54  How.  (N.  Y.)  Pr.  (1839). 

129  (1875).     See  Caufman  v.  Sayre,  *  Poweshiek  Co.  v.   Denison,   36 

2  B.  Mon.  (Ky.)  202  (1841).     It  has  Iowa,  244,  248  (1873) ;  s.  c.  15  Am. 

been  said    that  where  there  is  no  Rep.  521.     See  Packer  v.  Rochester 

statutory  requirement,    a    court  of  &  S.  R.  R.  Co.,  17  N.  Y.  287  (1858), 

equity  will  order  a  sale  in  parcels  Holdeq  v.  Sackett,  12  Abb.  (N.  Y.) 

■where  the  premises  consist  of  differ-  Pr.  473  1861) ;  Lansing  v.  Goelett, 

ent  tracts,  which  are  together  worth  9  Cow.  (N.  Y.)  346  (1827).     See  also 

more    than    the    amount    secured.  Bradford    v.    Harper,   25  Ala.   387 

Ryerson  v.  Boorman,  7  K  J.  Eq.  (1854);  Kelly  v.  Payne,  18  Ala.  371 

(3  Halst.)  167,  640  (1849).  (1850);  Hobby  v.  Pemberton,  Dudley 

"Blazey  V.    Delius,    74    111.    299  (Ga.)212(1831);  Marston  v.  Marston. 

(1874).  45  Me.  412  (1858) ;  Haynes  v.  Wel- 

2  Blazey    v.   Delius,   74    111.    299  lington,  25  Me.  458  (1845) ;  Brown 

(1874).  V.    Tyler,   72  Mass.    (8    Gray),  135 

*  N.  Y.  Code  Civ.  Proc.  §  1637.  (1857) ;    s.    c.    69  Am.    Dec.    239  ; 

«  Walker  v.  Hallctt,  1  Ala.  379,  393  Ritger  v.  Parker,  62  Mass.  (8  Cush.) 

(1840).     See  Knapp  v.  Burnham,  11  145  (1851) ;     Glower    v.    Rawlings, 

Paige  Ch.  (N.  Y.)  330  (1844) ;  Levert  17  Miss.  (9  Smed.  &  M.)  122  (1847); 


§  495.]       SALE   FOE  PAET  DUE — ^FUTUEE   SALES.  599 

the  mortgagee,  the  presumption  is,  in  all  cases,  that  the 
property  sells  for  its  full  value.'  In  such  a  case  the  mortgagee 
is  entitled  to  retain  from  the  proceeds  of  the  sale  enough  to 
satisfy  unpaid  installments,  though  not  yet  due.'  Where 
judgment  of  foreclosure  is  rendered  upon  a  mortgage  secur- 
ing both  matured  and  unmatured  notes,  and  the  land  is 
ordered  to  be  sold  as  not  divisible,  the  plaintiff  may  bid  the 
whole  amount  due  and  to  become  due  on  the  mortgage, 
besides  the  costs  of  the  action,  and  upon  paying  the  costs 
and  simply  receipting  for  the  whole  amount  of  the  judg- 
ment, the  same  will  constitute  a  valid  payment. 

§  495.  Sale  of  portion  of  premises  for  part  of  debt 
due — Failure  to  pay  subsequent  installments. — Where  a 
portion  of  the  mortgage  debt  is  not  yet  due,  and  the  judg- 
ment directs  that  so  much  of  the  mortgaged  premises  be 
sold  as  will  be  sufficient  to  pay  the  amount  then  due  on  the 
mortgage,  with  the  costs  of  the  suit,  and  there  has  been 
a  sale  of  such  separate  portion,  the  judgment  will  remain  in 
force  as  a  security  against  any  subsequent  default.  And  if 
there  should  be  a  default  subsequent  to  the  judgment  in  the 
payment  of  any  portion  of  the  interest  or  any  installment  of 
the  principal,  the  court  will,  upon  a  proper  petition  of  the 
plaintiff,  due  notice  having  been  served  upon  the  parties 
interested,  by  further  order  founded  upon  the  first  judgment, 
direct  a  sale  to  be  made  of  so  much  of  the  mortgaged  prem- 
ises as  will  be  necessary  to  satisfy  the  amount  of  interest,  or 
the  installment  of  the  principal  then  due,  together  with  the 
costs  of  the  petition  and  of  the  subsequent  proceedings  there- 
on. And  this  proceeding  may  be  repeated  as  often  as  a 
subsequent  default  is  made.* 


Stark  V.  Mercer,  4  Miss.  (3  How.)  man   v.   Ely,  6    "Wis.  244   (1858) ; 

377   (1839) ;    Carter   v.    Walker,    2  Hope  v.  Booth,  1  Barn.  &  Ad.  498 

Ohio  St.  339  (1853) ;   West  Branch  (1830). 

Bank    v.   Chester,   11  Pa.   St.   282  >  Escher  v.   Simmons,   54  Iowa, 

(1849) ;  8.  C.  57  Am.  Dec.  547  ;  Mc-  269  (1880). 

Call  V.  Lenox,  9  Serg.  &  R.  (Pa.)  «  Fowler  v.  Johnson,  26  Minn.  338 

302  (1823) ;  Pierce  v.  Potter,  7  Watts.  (1880). 

(Pa.)  477  (1838) ;  Berger  v.  Hiester,  «  N.  Y.  Code  Civ.  Proc.  §  1636. 

6  Whart.  (Pa.)  210  (1840) ;  Hodson  See  Malcolm  v.  Allen,  49  N.  Y.  443 

V.  Treat,  7  Wis.  263  (1859);  Tall-  (1872). 


600  OEDEELNG    SECOND    SALE.  [§496. 

It  would  seem  that  the  provisions  of  the  Code  of  Civil 
Procedure,  relating  to  a  foreclosure  sale  for  installments 
not  due  at  the  commencement  of  the  suit,  apply  only  to 
the  foreclosure  of  mortgages  executed  to  secure  the  pay- 
ment of  money  by  installments,  and  can  not  be  applied 
to  mortgages  conditioned  for  the  performance  of  covenants 
other  than  for  the  payment  of  money.'  Thus,  in  an  action 
brought  to  foreclose  a  mortgage,  conditioned  merely  for  the 
support  of  the  mortgagee,  no  relief  can  be  granted  for 
neglect  to  support  after  the  commencement  of  the  action, 
except  by  a  new  foreclosure,  if  only  a  portion  of  the  premises 
were  sold.' 

§  496.  Petition  for  order  of  second  sale — Reference 
thereon  to  compute  amount  due. — Where  a  portion  of  the 
premises  have  been  sold  for  an  installment  due,  and  there 
has  been  a  subsequent  default,  the  plaintiff  should  apply  by 
petition  to  the  court  for  a  subsequent  sale  of  the  residue  of 
the  premises,  or  so  much  thereof  as  may  be  necessary  to  pay 
the  installment  or  interest  then  due,  besides  the  costs  of  the 
proceeding.  Such  a  petition  should  bear  the  title  of  the  action 
and  be  addressed  to  the  court  in  which  the  judgment  of 
foreclosure  was  obtained.  It  should  contain  all  the  essential 
points  upon  which  the  previous  order  for  sale  was  founded, 
and  should  recite  the  judgment,  and  the  continuance  thereof 
as  security  for  subsequent  defaults.  It  should  also  set  forth 
briefly  the  facts  in  the  case  showing  the  amount  of  the 
installment  or  interest  due,  the  time  when  it  became  due, 
and  other  particulars  for  the  full  information  of  the  court. 
It  should  be  verified  on  the  oath  of  the  petitioner  and  contain 
a  prayer  for  the  relief  desired,  the  same  as  other  petitions. 
Due  notice  of  application  to  the  court  for  the  second  sale 
should  be  served  upon  all  the  parties  interested  who  have 
appeared  in  the  action.'' 

If  all  the  parties  are  adults,  and  have  been  personally 
served,  the  court  will  order  a  second  sale  on  a  petition  without 


'  Ferguson  v.  Ferguson,   2  N.  Y,  ^  Morrison  v.    IMorrison,    4    Hun 

360   (1849),  modifying  3  Barb.  Ch.       (N.    Y.)  410    (1875)  ;    Ferguson-  v. 
(N.  Y.)  616.  Ferguson,  2  N.  Y.  360  (1849), 


§  497.]  OEDEB  FOR   SECOITD    SALE.  601 

a  reference ;  but  if  any  of  the  defendants  are  absentees  or 
infants  who  are  not  represented  in  the  action,  the  court  will 
not  proceed  and  order  a  second  sale  without  a  reference. 

The  referee  will  have  duties  and  authority  similar  to  those 
of  a  referee  appointed  to  compute  the  amount  due  upon  an 
application  for  judgment  on  default.'  If  there  are  further 
installments  yet  to  become  due,  the  referee  should  ascertain 
whether  the  premises  still  remaining  unsold  can  be  sold  in 
parcels  without  prejudice  to  the  interests  of  the  parties.  But 
where,  upon  a  bill  for  the  foreclosure  of  a  mortgage  payable 
by  installments,  some  of  which  were  not  due  and  payable  at 
the  time  of  granting  the  decree  of  sale,  the  referee  appointed 
by  the  court  upon  the  first  reference,  reported  that  the  prem- 
ises could  not  be  sold  in  parcels,  it  seems  that  it  will  not  be 
necessary  to  obtain  another  report  upon  that  subject  pre- 
vious to  obtaining  a  second  order  of  sale  to  pay  installments 
which  have  become  due  subsequently  to  the  decree.' 

§  497.  Order  for  second  sale. — If  there  has  been  a 
second  reference,  on  the  coming  in  of  the  referee's  report, 
the  order  for  a  second  sale  will  follow  as  a  matter  of  course, 
as  under  the  original  order  of  reference,  and  the  manner  of 
conducting  the  sale  will  be  the  same.  The  second  order 
of  sale  should  refer  to,  and  be  founded  upon  the  first 
judgment,  and  should  in  a  similar  manner  direct  the  sale  of 
the  mortgaged  premises,  or  so  much  thereof  as  will  be 
necessary  to  satisfy  the  amount  due,  besides  costs,  and  the 
payment  of  the  same  to  the  petitioner ;  it  should  also  contain 
all  the  other  essential  requisites  of  a  judgrrient  in  fore- 
closure. 

The  report  of  the  referee  to  compute  the  amount  due, 
must  be  filed  and  confirmed  before  the  plaintiff  will  be 
entitled  to  apply  for  an  order  of  sale  founded  upon  it.  In 
those  cases  where  any  of  the  defendants  attend  before  the 
referee  and  contest  the  reference,  the  order  of  the  court, 
together  with  the  petition  and  the  report  of  the  referee  upon 


»  Knapp  V.  Burnham,  11  Paige  Ch.  (N.  T.)  330  (1844). 
»  Knapp  V.  Bumham,  11  Paige  Ch.  (N.  T.)  330  (1844). 
»  Knapp  V.  Burnham,  11  Paige  Ch.  (N.  Y.)  330  (1844). 


602  SALE   STAYED    BY   PAYMENT.  [§  498. 

which  it  was  founded,  and  all  the  other  orders  and  papers 
in  the  proceedings  must  be  filed  before  applying  for  an  order 
of  sale.' 

§  498.  Where  proceedings  stayed  by  payment— Sub- 
sequent default. — The  New  York  Code  of  Civil  Procedure 
provides,"  where  an  action  is  brought  to  foreclose  a  mortgage 
upon  real  property,  upon  which  a  portion  of  the  principal 
or  interest  is  due,  and  a  portion  of  either  is  to  become  due, 
and  after  a  final  judgment  directing  a  sale  is  rendered, 
but  before  the  sale  is  made,  that  if  the  defendant  pays  into 
court  the  amount  due  for  principal  and  interest,  and  the 
costs  of  the  action,  together  with  the  expenses  of  the  pro- 
ceedings to  sell,  if  any,  all  proceedings  upon  the  judgment 
must  be  stayed ;  but  that  upon  a  subsequent  default  in  the 
payment  of  principal  or  interest,  the  court  may  make  an 
order  directing  the  enforcement  of  the  judgment  for  the 
purpose  of  collecting  the  sum  then  due. 

If  after  such  stay,  the  defendant  makes  default  in  the 
payment  of  any  subsequent  installment  of  principal  or 
interest  when  it  becomes  due,  the  plaintiff  may  apply  to  the 
court  upon  petition,  setting  forth  the  default  subsequent  to 
the  judgment,  the  amount  due  on  the  mortgage,  and  the 
time  when  it  became  due,  and  ask  that  leave  be  granted 
to  enforce  his  judgment  by  a  sale  of  the  mortgaged  premises. 

The  application  must  be  made  to  the  court  upon  due 
notice  to  all  parties  who  have  appeared  in  the  action  ;  all 
the  proceedings  are  substantially  the  same  as  those  in  the 
case  of  a  failure  to  pay  subsequent  installments,  where  a  por- 
tion of  the  premises  have  been  sold  to  pay  an  installment 
due,  except  that  a  reference  in  this  case  is  not  necessary,  as 
the  judgment  fixes  the  rights  of  the  parties ;  if  the  facts  are 
not  disputed,  the  order  follows  as  a  matter  of  course.' 


»  Knapp  V.  Burnham,  31  Paige  Ch.  (N.  Y.)  330  (1844). 
•  N.  Y.  Code  Civ.  Proc.  §  1634,  1635. 
»  N.  Y.  Code  Civ.  Proc.  §  1635. 


CHAPTER    XXIV. 


SALE  IN  INVERSE  ORDER  OF  ALIENATION. 

GENERAL  RULE-DETERMINING  ORDER  OF  SALE-COURT  DIRECTING 

ORDER-EQUITABLE  RIGHTS  BETWEEN  SUBSEQUENT  GRANTEES 

AND  LIENORS. 


§  499.  Rule  for  selling  in  inverse 
order  of  alienation. 

500.  Rule  in  Iowa,  Kentucky  and 

Georgia. 

501.  Rule  where  conveyances  by 

grantees  of  mortgagor. 
503.  Determining    order    of    sale 
where    various    grantees — 
Equities  between  them. 

503.  Directions  by  court  for  the 

order  of  sale. 

504.  Application  to  the  court  for 

directions. 

505.  Equitable  rights  between  sub- 

sequent grantees  and  lienors. 

506.  Equities  between  grantees — 

Time  of  acquiring  title. 

507.  Rights  of   successive  subse- 

quent  mortgagees  —  New 
Jersey  rule. 


508.  Rights  of  purchaser  of  part 

of  mortgaged  premises  sub- 
ject to  mortgage. 

509.  Order  of  sale  in  parcels  where 

subsequent  grantee  of  part 
has  assumed  mortgage. 

510.  When  rule  for  sale  in  inverse 

order  does  not  apply. 

511.  Contribution    according     to 

value  —  Valuation,   when 
made. 

512.  Where    the    mortgagee    has 

other    securities  and  there 
are  subsequent  mortgagees. 

513.  Rule  where  portions  alienated 

have  been  released. 

514.  Rule  for  order  of  sale  where 

the  mortgage  covers  home- 
stead and  other  lands. 


§  499.    Rule  for  selling  in  inverse  order  of  alienation. — 

Upon  a  sale  of  mortgaged  premises  in  an  action  for  fore- 
closure, if  the  mortgagor,  subsequent  to  the  execution  of 
the  mortgage,  has  made  successive  transfers  of  separate 
parcels  of  the  mortgaged  premises  to  different  persons,  that 
portion,  if  any,  still  remaining  in  his  hands,  must  first  be 
sold  to  satisfy  the  mortgage  debt  and  the  costs  and  expenses 
of  the  action  ;  and  if  a  sufificient  sum  for  that  purpose  is  not 
realized  from  such  sale,  then  the  various  portions  of  the 
mortgaged  lands  conveyed  by  the  mortgagor  must  be  sold 
in  the  inverse  order  of  their  alienation,  according  to  the 
equitable  rights  of  the  different  grantees  as  among  themselves, 
until  a  sufficient  sum  is  realized  to  satisfy  the  mortgage  debt. 
The  same  principle  of  equity  is  applicable  to  subsequent 
incumbrances    upon    different    portions    of   the    mortgaged 


603 


604  SALE  IN  LNYERSE  ORDER  OF  ALIENATION.     [§  499. 


premises,  either  by  mortgage  or  by  judgment,'  as  well  as  to 
sales  of  parcels  of  the  equity  of  redemption,*  because 
subsequent  incumbrances  are  deemed  sales  within  the  rule 
above  stated.* 

This  rule  has  been  adopted  throughout  the  states  of  the 
Union,  and  now  prevails  in  New  York,*  Alabama,*  Colo- 
rado,* Florida,'  Illinois,*  Indiana,*  Maine,"  Massachusetts," 


'  Bernhardt  v.  Lymburner,  85  N. 
Y.  173  (1881) ;  Stuy  vesant  v.  Hall,  3 
Barb.  Ch.  (N.  Y.)  151,  155  (1847) ; 
New  York  Life  Insurance  and  Trust 
Co.  V.  Milnor,  1  Barb.  Ch.  (N.  Y.) 
353  (1846) ;  Snyder  v.  Stafford,  11 
Paige  Ch.  (N.  Y.)  71  (1844) ;  Fassett 
V.  Mulock,  5  Colo.  466  (1880)  ; 
Conrad  v.  Harrison,  3  Leigh  (Va.) 
533  (1833). 

«  Steere  v,  Childs,  15  Huu  N.  Y. 
511  (1878) ;  Dodds  v.  Snyder,  44  111. 
53  (1867). 

2  Milligan's  Appeal,  104  Pa.  St. 
508  (1883).  See  Fassett  v.  Mulock, 
5  Colo.  466  (1880). 

*  Bernhardt  v.  Lymburner,  85  N. 
Y.  173  (1881) ;  Hopkins  v.  Wolley, 
81  N.  Y.  77  (1880) ;  Barnes  v.  Mott, 
64  N.  Y.  397.  403  (1876) ;  Chapman 
V.  West,  17  N.  Y.  135  (1858)  ;  In- 
galls  V.  Morgan,  10  N.  Y.  178  (1854); 
Howard  Ins.  Co.  v.  Halsey,  8  N.  Y. 
271  (1853) ;  s.  c.  59  Am.  Dec.  478  : 
Crafts  V.  Aspinwall,  3  N.  Y.  389 
(1849);  McDonald  v.  Whitney,  3 
N.  Y.  Week.  Dig.  529  (1876); 
Woods  V.  Spalding,  45  Barb.  (N.  Y.) 
608  (1866);  Lafarge  Fire  Ins.  Co. 
V.  Bell,  33  Barb.  (N.  Y.)  54  (1856) ; 
St.  John  V.  Bumpstead,  17  Barb. 
(N.  Y.)  103  (1853) ;  Weaver  v. 
Toogood,  1  Barb.  (N.  Y.)  338  (1847) ; 
Ferguson  v.  Kimball,  3  Barb.  Ch. 
(N.  Y.)  616  (1846);  Stuyvesant  v. 
Hall.  3  Barb.  Ch.  (N.  Y.)  151  (1847); 
New  York  Life  Ins.  &  Trust  Co.  v, 
Milnor,  1  Barb.  Ch.  (N.  Y.)  353 
(1846) ;  Ex  parte  Merrian,   4  Den. 


(N.  Y.)  354  (1847);  VanSlyke  v. 
VanLoan,  36  Hun  (N.  Y.)  344 
(1882) ;  Coles  v.  Appleby,  22  Hun 
(N.  Y.)  73  (1880) ;  Steere  v.  Childs, 
15  Hun  (N.  Y.)  518  (1878) ;  Clowes 
V.  Dickenson,  5  Johns.  Ch.  (N.  Y.) 
335  (1837) ;  8.  c.  9  Cow.  (N.  Y.) 
403;  Gill  v.  Lyon,  1  Johns.  Ch. 
(N.  Y.)  447  (1815);  Kellogg  v.  Rand. 
11  Paige  Ch.  (N.  Y.)  59  (1844)  ; 
Rathbone  v.  Clark,  9  Paige  Ch.  (N. 
Y.)  648  (1843) ;  Schryver  v.  TeUer, 
9  Paige  Ch.  (N.  Y. )  173  (1841); 
Farmers'  Loan  &  Trust  Co.  v. 
Maltby,  8  Paige  Ch.  (N.  Y.)  361 
(1840) ;  Patty  v.  Pease,  8  Paige  Ch. 
(K  Y.)377  (1840) ;  8.  c.  35  Am.  Dec. 
683  ;  Skeel  v.  Spraker.  8  Paige  Ch. 
(K  Y.)  183  (1840) ;  Guion  v.  Knapp, 
6  Paige  Ch.  (N.  Y.)  35  (1836) ;  s.  c. 
29  Am.  Dec.  741  ;  Jenkins  v.  Freyer, 
4  Paige  Ch.  (N.  Y.)  47  (1833)  ;  Gou- 
verneur  v.  Lynch,  3  Paige  Ch.  (N. 
Y.)  300  (1830) ;  James  v.  Hubbard, 
1  Paige  Ch.  (N.  Y.)  228(1828) ;  New 
York  Life  Ins.  &  Trust  Co.  v.  Cut- 
ler, 3  Sandf.  Ch.  (N.  Y.)  176  (1845). 

»  Mobile  M.  D.  &  M.  Ins.  Co.  v. 
Huder,  35  Ala.  713  (1860). 

« Fassett  v.  Mulock,  5  Colo.  466 
(1880). 

'  Ritch  V.  Eichelberger  13  Fla. 
169  (1869). 

•Niles  V.  Harmon,  80  111.  396 
(1875) ;  Moore  v.  Chandler,  59  111. 
466  (1871);  Sumner  v.  Waugh,  56 
111.  531  (1869)  ;  Tompkin  v.  Wiltber- 
ger,  56  111.  385  (1870) ;  Lock  v.  Ful- 
ford,   52  Bl  166  (1869) ;  Dodds  y. 


§  499.]      SALE  LN  INVERSE  OEDER  OF  ALIEXATION'. 


605 


Michigan,'  Minnesota,*  New  Hampshire,'  New  Jersey,*  Ohio,' 
Pennsylvania,"  South  Carohna/  Texas,'  Vermont,"  Virginia," 


Snyder,  44  HI.  53  (1867);  Iglehart 
V.  Crane,  42  111.  261  (1866) ;  Matte- 
son  V.  Thomas,  41  111.  110  (1866) ; 
McLaurie  v.  Thomas,  39  111.  291 
,(1866) ;  Marshall  v.  Moore,  36  HI, 
321  (1865). 

•  Evansville  Gas  Light  Co.  v. 
State,  73  Ind.  219  (1881) ;  Medsker 
V.  Parker,  70  Ind.  509  (1880);  Mc 
Cullum  V.  Turpie,  32  Ind.  146 
(1869);  Aiken  v.  Bruen,  21  Ind.  137 
(1863) ;  Williams  v.  Perry,  20  Ind. 
437  (1863) ;  Cissna  v.  Haines,  18  Ind. 
496(1842) ;  Day  v.  Patterson,  18  Ind. 
114(1862). 

"  Sheperd  v.  Adams,  32  Me.  63 
(1850) ;  Holden  v.  Pike,  24  Me.  427 
(1844). 

"  Beard  v.  Fitzgerald,  105  Mass. 
134  (1870) ;  Pike  v.  Goodnow,  94 
Mass.  (12  Allen),  474(1866) ;  George 
v.  Wood,  91  Mass.  (9  Allen),  80 
(1864) ;  Kilbom  v.  Robbins,  90  Mass. 
►(8  Allen),  466  (1864) ;  George  v. 
Kent,  89  Mass.  (7  Allen),  16  (1863) ; 
Chase  v.  Woodbury,  60  Mass.  (6 
Cush.)  143  (1850) ;  Allen  v.  Clark, 
34  Mass.  (17  Pick.)  47  (1835).  But 
see  Parkman  v.  Welch,  36  Mass, 
(19  Pick.)  231  (1837). 

'  McVeigh  v,  Sherwood,  47  Mich. 
645  (1882);  Sager  v.  Tupper,  35 
Mich.  134  (1876) ;  McKinney  v.  Mil- 
ler, 19  Mich.  142  (1869);  Ireland  v. 
Woolman,  15  Mich.  253  (1867); 
Cooper  V.  Bigly,  13  Mich.  463 
<1865) ;  Briggs  v.  Kaufman,  2  Mich. 
N.  P.  160  (1871) ;  Mason  v.  Payne, 
Walk.  Ch.  (Mich.)  459  (1844). 

'  Johnson  v.  Williams,  4  Minn. 
260,  268  (1860). 

»  Mahagan  v.  Mead,  63  N.  H.  570 
(1885) ;  Brown  v.  Simons,  44  N.  H. 
475  (1863). 

*  HiU  V.  McCarter,  27  N.  J.  Eq. 


(12  C.  E.  Gr.)  41  (1876);  Mutual  L. 
Ins.  Co.  of  N.  T.  V.  Boughrum,  24 
N.  J.  Eq.  (9  C.  E.  Gr.)  44  (1873) ; 
Mount  V.  Potts,  23  N.  J.  Eq.  (8  C. 
E.  Gr.)  188  (1872);  Weatherby  v. 
Slack,  16  N.  J.  Eq.  (1  C.  E.  Gr.)491 
(1864) ;  Keene  v.  Munn,  16  N.  J. 
Eq.  (1  C.  E.  Gr.)  398  (1863) ;  Gaskill 
V.  Sine,  13  N.  J.  Eq.  (2  Beas.)  400 
(1861) ;  s.  c.  78  Am.  Dec.  105  ;  Win- 
ters V.  Henderson,  6  N.  J.  Eq.  (2 
Halst.)  31  (1846) ;  Wikoff  v.  Davis, 
4  N.  J.  Eq.  (3  H.  W.  Gr.)  224  (1842); 
Britton  v.  Updike,  3  N.  J.  Eq.  (2  H. 
W.  Gr.)  125  (1834);  Shannon  v. 
Marselis,  1  N.  J.  Eq.  (Saxt.)  413 
(1831). 

'  Stemberger  v.  Hanna,  42  Ohio 
St.  305  (1884) ;  Nellons  v.  Truax,  6 
Ohio  St.  97  (1856) ;  Gary  v.  Folsom, 
14  Ohio,  365  (1846)  ;  Commercial 
Bank  of  Lake  Erie  v.  Western 
Reserve  Bank,  11  Ohio,  -J 44  (1842)  ; 
s.  c.  38  Am.  Dec.  789.  But  see 
Green  v.  Ramage,  18  Ohio,  428 
(1849);  3.  c.  51  Am.  Dec.  458. 

«Milligan's  Appeal,  104  Pa.  St. 
503  (1883) ;  Carpenter  v.  Koons,  20 
Pa.  St.  222  (1852) ;  Warren  v.  Sen- 
nett,  4  Pa.  St.  114  (1846)  ;  Cowden's 
Estate,  1  Pa.  St.  267  (1845)  ;  Pres- 
byterian Corporations  v,  Wallace,  3 
Rawle  (Pa.)  109  (1831) ;  Donley  v. 
Hays,  17  Serg.  &  R.  (Pa.)  400  (1828); 
Nailer  v.  Stanley,  10  Serg.  &  R. 
(Pa.)  450  (1823);  s.  c.  13  Am.  Dec. 
691. 

'  Norton  v.  Lewis,  3  S.  C.  25 
(1871) ;  Stoney  v.  Shultz,  1  Hill  (S. 
C.)  Eq.  465  (1834);  s.  c.  27  Am. 
Dec.  429  ;  Meng  v.  Houser,  13  Rich, 
(S.  C.)  Eq.  210  (1867). 

8  Rippetoe  v.  Dwyer,  49  Tex.  498 
(1878);  Miller  v,  Rogers,  49  Tex. 
398  (1878). 


606 


SALE  IN  INVEESE  OEDER  OF  ALIENATION.     [§  500. 


and  Wisconsin.'  The  same  rule  also  prevails  in  England.' 
But  a  different  rule  obtains  in  Iowa,  Kentucky  and  Georgia.* 

§  500.    Rule  in   Iowa,   Kentucky  and    Georgia.— The 

courts  of  Iowa,  Kentucky  and  Georgia  hold,  contrary  to  the 
general  rule  above  stated,  that  where  several  parts  of  a 
mortgaged  estate  are  conveyed  in  distinct  parcels  to  differ- 
ent persons,  at  different  times,  the  several  owners  must 
contribute  to  the  payment  of  the  mortgage  debt  pro  rata, 
according  to  the  value  of  their  respective  portions  of  the 
property.* 

The  supreme  court  of  Iowa,  in  stating  the  arguments  in 
favor  of  this  rule  in  Bates  v.  Ruddick,^  said  :  *'  When  we  come 
to  settle  the  question,  however,  as  between  two  grantees 
purchasing  the  different  parcels  of  the  incumbered  premises, 
nt  different  times,  there  is  no  more  moral  obligation  on 
the  one  to  pay  than  on  the  other.  Both  of  them  have 
purchased  premises  that  are  alike  affected  by  a  lien,  which 
neither  created  nor  undertook  to  pay.  The  purchased 
premises  are  liable  to  be  sold,  because  of  the  failure  of  their 
grantor  to  discharge  his  undertaking,  and  not  because  of 
any  failure  on  their  part.  In  such  cases  their  interest  is 
common,   their   rights  are  equal  and  there  should  be   an 


»  Eoot  V.  Collins,  34  Vt.  173  (1861); 
Lyman  v.  Lyman,  32  Vt.  79  (1859). 

'0  Jones  V.  Myrlck,  8  Gratt.  (Va.) 
179  (1851);  Henkle  v.  Allstadt,  4 
Gratt.  (Va.)  284  (1848) ;  Conrad  v. 
Harrison,  3  Leigh.  (Va.)  532  (1832). 

'  Aiken  v.  Milwaukee  &  St,  P.  R. 
Co..  37  Wis.  469  (1875);  State  of 
"Wisconsin  v.  Titus,  17  Wis.  241 
(1863) ;  Worth  v.  Hill,  14  Wis.  559 
(1861);  Ogden  v.  Glidden,  9  Wis. 
46  (1859). 

» See  Hartley  v.  O'Flaherty, 
Lloyd  &  Goold  Cas.  Temp.  Plun- 
kett,  208  (1835) ;  Averall  v.  Wade, 
Lloyd  &  Goold  Cas.  Temp.  Suyden, 
252  (1836);  Hamilton  v.  Royse,  2 
Sch.  &  Lef.  315  (1806).  But  see 
Barnes  v.  Racster,  1  Young  &  C. 
C.  R.  401  (1842). 


«  See  vost  §  500. 

<  Huff  V.  Farewell,  67  Iowa,  298 
(1885) ;  Barney  v.  Myers,  28  Iowa, 
472  (1870);  Griffith  v.  Lovell,  26 
Iowa,  226  (1868) ;  Massie  v.  Wilson, 
16  Iowa,  391  (1864) ;  Bates  v.  Rud- 
dick,  2  Iowa,  423  (1856) ;  s.  c.  65 
Am.  Dec.  174 ;  Campbell  v.  John- 
son, 4  Dana  (Ky, )  182  (1836); 
Hughes  V.  Graves,  1  Litt.  (Ky.)  317 
(1822) ;  Poston  v.  Eubanks,  3  J.  J. 
Marsh.  (Ky.)  44  (1829) ;  Dickey  v. 
Thompson,  8  B.  Mon.  (Ky.)  312 
(1848);  Burk  v.  Chrisman,  3  B. 
Mon.  (Ky.)  50  (1842);  Hunt  v. 
McConnell,  1  T.  B.  Mon.  (Ky.)  219 
(1824).  See  also  Stanly  v.  Stocks, 
1  Dev.  (N.  C.)Eq.  314(1829);  Borden 
V.  Grady,  37  Ga.  660  (1868). 

»  2  Iowa,  423  (1856). 


§  501.]  EXTLE SALES  BY  GEANTEES  OF  MOETGAGOE.       607 

equality  of  burden.  It  is  difficult  for  us  to  see  why  the  last 
purchaser,  any  more  than  the  first,  sits  in  the  seat  of  the 
grantor." 

In  Kentucky,  in  the  case  of  Dickey  v.  Thompson,'  Chief 
Justice  Marshall  held  it  to  be  decided  by  authority,  even  if  not 
by  reason,  so  far  as  that  state  is  concerned,  that  the  rule  as 
to  the  application  of  property  to  the  satisfaction  of  a 
mortgage  in  the  inverse  order  of  its  transfer  by  the  mort- 
gagor, does  not  prevail,  but  that  the  transferees  must 
contribute  ratably. 

In  Barden  v.  Grady,*  the  supreme  court  of  Georgia  held 
that,  inasmuch  as  a  judgment  binds  all  the  property  of  the 
defendant  from  its  date,  equity  will  not  compel  the  plaintiff 
to  levy  on  that  portion  of  the  property  last  sold  by  the 
mortgagor,  and  sell  that  part,  before  he  can  proceed  against 
property  previously  sold. 

§  501.  Rule  where  conveyances  by  grantees  of  mort- 
gagor.— The  rule,  that  if  successive  sales  of  portions  of 
mortgaged  lands  are  made  by  the  mortgagor  to  different 
persons,  the  part  unsold  shall  first  be  liable  to  satisfy  the 
mortgage  debt,  and  after  it,  the  parcels  alienated  in 
the  inverse  order  of  the  sales,  applies  also  to  successive 
conveyances  with  warranty  by  the  mortgagor's  grantees.' 
Thus,  where  the  grantee  of  a  mortgagor  conveys  the  mort- 
gaged premises  in  separate  parcels,  and  the  grantees  of  such 
parcels  subsequently  convey  them  in  parcels,  the  parcels 
subsequently  conveyed  will  be  subject  to  sale  in  the  invers'a 
order  of  their  conveyance.* 

The  same  rule  applies  where  there  are  general  liens  upon 
the  entire  mortgaged  premises  and  subsequent  incumbrances 
on  separate  parcels  thereof,  in  which  case  the  general  liens 
are  primarily  chargeable  on  the  parcels  in  the  inverse  order 
of  the  dates  of  the  subsequent  incumbrances.*     This  rule. 


»  8  B.  Mon.  (Ky.)  312,  319  (1847).  »  Mahagan  v.  Mead,  63  N.  H.  570 

•37  Ga.    660    (1868),    overruling  (1885). 

Gumming  v.  Gumming,  3  Ga.   460  <  Hiles  v.  Goult,  30  N.  J.  Eq.  (3 

(1847).    See  Knowles  v.  Lawton,  18  Stew.)   40   (1878),     See    Guion    v. 

Ga.  476  (1855);  Hammond  v.  Myrick,  Knapp,  6  Paige  Ch.  (N.  Y.)  35  (1836). 

14  Ga,  77  (1858).  »  Schry  ver  v.  Teller,  9  Paige  Ch. 


60S  OfiDEK    OF   SALE VAEIOUS    GllANTEES.        [§502. 

however,  will  not  be  enforced  in  any  case  where  its  applica- 
tion would  work  injustice  to  any  party.' 

§  502.  Determining  order  of  sale  where  various  gran- 
tees—  Equities  between  them. — In  a  contest  between 
successive  purchasers  as  to  whose  premises  shall  be  sold 
first  to  pay  the  mortgage  debt,  the  order  of  sale  will  be 
determined  prima  facie  by  the  dates  when  their  respective 
titles  vested;  but  the  holder  of  a  junior  conveyance  may 
show  that,  prior  to  the  execution  and  delivery  of  the  senior 
conveyance,  he  was  in  the  actual  and  open  possession  of 
the  parcel  of  land  purchased  by  him,  under  a  contract 
of  sale,  and  that  he  had  so  far  performed  his  part  of  the  con- 
tract as  to  be  entitled  to  a  specific  performance  thereof  prior 
to  the  date  of  the  record  title  held  by  a  senior  grantee.'  The 
rule  providing  for  the  sale  of  parcels  of  mortgaged  premises 
in  the  inverse  order  in  which  the  conveyances  thereof  were 
made,  has  been  said  to  rest  upon  the  principle,  that  where 
the  mortgagor  sells  a  part  of  the  mortgaged  premises  with- 
out reference  to  the  incumbrance,  it  is  right  between 
him  and  the  purchaser,  that  the  part  still  held  by  the 
mortgagor  should  first  be  applied  to  the  payment  of  the  debt.* 

The  supreme  court  of  Illinois*  has  held,  that  "where  the 
owner  of  land  mortgaged  conveys  a  portion  of  it  with 
warranty,  it  is  his  duty  to  protect  the  grantee  against  the 
mortgage;  and,  in  foreclosing  the  mortgage,  it  is  just  and 
right  that  it  should  be  satisfied,  if  may  be,  out  of  the 
portion  of  the  land  which  remains  in  the  mortgagor,  and 
that  it  should  be  first  charged  with  the  debt.  This  protects 
the  interest  of  the  purchaser  of  the  part,  and  makes  the 


(N.  Y.)  173  (1841).     See  Stuyvesant  (1861) ;    s.   c.   78    Am.    Dec.    105 ; 

V.  Hall,  2  Barb.  Ch.   (N.   Y.)  151  Messervey  v.  Barelll,  2  Hill  (S.  C.) 

(1847).  Eq.    567    (1837).       See    Dickey    v. 

>  Hill  V.  McCarter,  27  N.  J.  Eq.  Thompson,    8    B.    Mon.  (Ky.)  314 

(12  C.  E.  Gr.)  41  (1876).  (1847) ;  Blight  v.    Banks,   6  T.    B. 

«  Sternberger  v.  Hanna,  42  Ohio  Mon.  (Ky.)  197  (1827) ;  s.  c.  17  Am. 

St.  305  (1884).  Dec.  136  ;  Blackledge  v.  Nelson,  2 

»  Lock   V.   Fulford,    52    111.    166  Dev.  (N.  C.)  Eq.  66  (1831);  Me^vey's 

(1869) ;  Hoy  v.  Bramhall.  19  N.  J.  Appeal,  4  Pa.  St.  80  (1846). 

Eq.  (4  C.  E.  Gr.)  563  (1868) ;  Gaskill  *  Niles    v.    Harmon,   80  111.    396, 

V.  Sine,  13  N,  J.  Eq.  (2  Beas.)  400  399  (1879). 


§  503.]        OEDER    OF    SALE — VAEIOUS    GRANTEES.  609 

mortgagor  but  pay  his  own  debt  out  of  his  own  land.  It 
saves  such  purchaser  from  loss  and  injury,  and  does  no 
harm  to  any  one  else.  And  should  the  mortgagor  convey 
the  portion  remaining  in  him  to  a  second  purchaser,  he 
takes  the  land  as  it  was  in  the  hands  of  the  mortgagor, 
subject  to  the  equity  of  being  first  charged  with  the  pay- 
ment of  the  mortgage  debt,  and  it  is  thus  equitable  that  the 
portion  of  the  land  held  by  the  second  purchaser  should 
first  be  sold  for  the  satisfaction  of  the  debt,  before  resort  is 
had  to  the  land  of  the  first  purchaser." 

The  portion  of  the  mortgaged  premises  retained  by  the 
mortgagor,  being  regarded  as  equitably  charged  with  the 
payment  of  the  debt,  if  the  mortgagor  afterwards  sells 
another  parcel  thereof,  the  second  purchaser  will  take  his 
parcel  charged  with  the  payment  of  the  mortgage  debt, 
as  between  him  and  the  purchaser  of  the  first  lot  ;  but  as 
between  such  second  purchaser  and  his  vendor,  the  land  still 
retained  by  the  mortgagor  will  be  primarily  liable  for  the 
payment  of  the  whole  debt.  The  same  principle  will  apply 
to  every  successive  alienation  throughout  the  entire  order 
thereof.* 

Where  it  has  been  established  by  statutory  enactment,  or 
by  the  decisions  of  the  courts,  in  the  case  of  the  sale  of  mort- 
gaged premises  on  foreclosure,  where  portions  thereof  have 
been  sold  by  the  mortgagor  at  various  times  subsequent  to  the 
execution  of  the  mortgage,  that  the  parcels  shall  be  subject 
to  sale  in  the  inverse  order  of  their  alienation,  it  is  held  that 
this  rule,  being  a  rule  of  property,  is  binding  on  the  courts 
of  the  United  States  sitting  in  that  state.* 

§  503.    Directions  by  court  for  the  order  of  sale. — If  the 

original  mortgagor  or  his  grantee  has  made  several  successive 
conveyances  of  portions  of  the  mortgaged  premises,  to  dif- 
ferent persons,  the  court,  upon  judgment  of  foreclosure  and 


1  Iglehart  v.   Crane,  43    111.     261  Gr.)  491   (18G4) ;  Wikofl  v.  Davis,  4 

(1866).  SeeIngallsv.]Morgan,10N.Y.  K  J.  Eq.   (3  H.  W.  Gr.)  224  (1842). 

178  (1854) ;  Thompkins  v.  Wilkbur-  =  Orvis  v.  Powell,  98  U.  S.  (8  Otto), 

ger,  56  111.  385  (1870)  ;  Matteson    v.  176  (1878)  ;  bk.  25  L.  ed.  238  ;  s.  c.  8 

Thomas,  41  111.  110  (1866) ;  Weatli-  Cent.  L.  J.  74. 
erby  v.  Slack,  16  N.  J.  Eq.  (1  C.  E. 


610  COURT   DrRECTLNG    OEDER    OF   SALE.  [§503. 

sale,  will  decree  that  the  parcels  shall  be  sold  in  the  inverse 
order  of  their  alienation,  as  shown  by  the  dates  of  the  respec- 
tive conveyances.*  In  Erie  County  Savings  Bank  v.  Roop,*  it 
was  held  that  "  courts  of  equity  have  long  exercised  the  power 
of  directing,  in  foreclosure  actions,  the  order  in  which  the 
different  parcels  of  the  mortgaged  premises  shall  be  sold, 
arising  out  of  the  equities  of  the  different  parties  interested 
in  the  equity  of  redemption  as  between  themselves."*  This 
rule  is  applicable,  however,  only  where  the  mortgage  was 
originally  a  lien  resting  uniformly  upon  the  whole  of  the 
land.* 

In  granting  a  decree  of  foreclosure  and  for  the  sale  of 
mortgaged  premises,  directions  as  to  the  order  in  which  the 
diferent  parcels  of  the  mortgaged  premises  shall  be  sold, 
will  be  given  as  a  matter  of  course,  upon  information  that 
separate  portions  of  such  premises  are  held  or  claimed  by 
different  persons  under  conveyances  or  incumbrances  which 
are  subsequent  to  the  mortgage  of  the  plaintiff.'  In  a 
case  where,  upon  judgment  of  foreclosure  and  sale,  a  motion 
was  made  for  directions  as  to  the  manner  of  selling  the 
mortgaged  property,  and  such  directions  were  given  as  the 
equities  of  the  parties  required,  it  was  held  that  no  error  was 
committed  ;  but  a  motion  for  such  directions  can  not  be  first 
made  in  an  appellate  court.* 

In  case  there  are  conflicting  claims,  among  junior  judg* 
ment  creditors,  to  the  surplus  that  may  arise  from  the  sale 
of  mortgaged  premises,  should  the  parcels  be  sold  in  any 
special  manner,  such  creditors  should  apply  to  the  court, 
previously  to  the  sale  under  the  decree,  for  directions  that 


>  Hart  V.  Wandle,   50  N.  T.  381  Clark,    9    Paige    Ch.    (N.  T.)   648 

(1872).     See  Erie  Co.  Sav.  Bank  v.  (1842) ;  Jumel  v.  Jumel,  7  Paige  Ch. 

Roop,  48  N.  Y.  292  (1872) ;  New  York  (N.  Y.)  591  (1839). 

L.  Ins.  &  T.  Co.  V.  Milnor,  1  Barb.  *  Evansville    Gas    Light    Co.    v. 

Ch.  (N.  Y.)  353  (1846) ;  National  State  State,  73  Ind.  219  (1881). 

Bank  v.  Hibbard,  45  How.  (N.  Y.)  '  New  York  L.   Ins.  &  T.  Co.  v. 

Pr.  280  (1873) ;  Evansville  Gas  Light  Milnor,   1  Barb.   Ch.   (N.   Y.)  353 

Co.  V.  State,  73  Ind.  219  (1881).  (1846). 

»  48  N.  Y.  292,  299  (1872).  •  Haggerty  v.  Byrne,  75  Ind.  499 

•SeeFergusonv,  Kimball,  3  Barb.  (1881).     See  Medsker  v.  Parker.  70 

Ch.  (N.  Y.)  616  (1846) ;  Rathbone  v.  Ind.  509  (1880). 


§  504.]    APPLICATION    TO    COUET    FOE    DIEECTIONS.  611 

the  premises  be  sold  in  such  manner  as  will  enable  them  to 
settle  their  respective  claims  upon  the  reference  for  the 
distribution  of  the  surplus. 

§  504.  Application  to  the  court  for  directions. — Where 
a  party  to  an  action  brought  to  foreclose  a  mortgage  and  to 
obtain  a  sale  of  the  mortgaged  premises,  desires  to  have  the 
parcels  of  such  premises  sold  in  a  particular  order,  he  should 
ask  to  have  a  clause  to  that  effect  inserted  in  the  decree  of 
sale.'  An  application  for  directions  in  the  judgment  as  to 
the  order  of  sale,  should  be  made  at  the  trial  or  at  a  special 
term  of  the  court ;  failure  to  give  directions  for  such  order 
of  sale  will  not  be  a  sufficient  ground  for  a  reversal  of  the 
judgment  on  appeal.* 

If  a  person  wishing  a  clause  inserted  in  the  decree 
directing  the  order  in  which  the  referee  shall  sell  the  prem- 
ises, neglects  to  apply  to  the  court  at  the  time  the  decree 
is  rendered,  or  at  a  special  term  thereafter,  he  may  apply  to 
the  referee  personally,  requesting  the  sale  to  be  made  in  a  par- 
ticular order ;  and  if  such  request  be  proper,  and  is  disregarded 
by  the  referee  without  reason,  the  person  aggrieved  may, 
after  sale,  move  to  set  the  same  aside.* 

Where  an  application  is  made  at  the  trial  for  the  insertion 
of  directions  in  the  decree  of  sale  as  to  the  order  in  which 
the  parcels  shall  be  sold,  the  proper  form  of  decree  is  that 
the  referee  or  other  ofificer  making  the  sale  of  the  mortgaged 
premises,  shall  sell  the  parcels  thereof  in  the  inverse  order 
of  their  alienation,  and  according  to  equity  as  between  the 
several  defendants,  leaving  the  officer  making  the  sale  to  set- 
tle the  details  of  the  order  of  sale  upon  principles  of  equity.* 

It  was  held  in  the  case  of  Knickerbacker  v.  Eggleston,^ 
that  where  a  controversy  exists  between  different  defendants 


'  Vandercook  t.  Cohoes  Savings  *  Vandercook  v.   Colioes  Savings 

Institution,  5  Hun  (N.Y.)  641  (1875);  Institution,    5    Hun    (N.    Y.  )  641 

Bergen  v.  Backhouse,  7  N.  Y.  Week.  (i'875). 

Dig.  113  (1878).  *  Rathbone  v.  Clark,  9  Paige  Ch, 

»  Bergen  v.  Backhouse,  7  N.  Y.  (N.  Y.)  648  (1842). 

Week.  Dig.  113(1878) ;  Vandercook  *  3  How.  (N.  Y.)  Pr.  130  (1847). 
V.  Cohoes  Savings  Institution,  5  Hun 
(N.Y.)  641  (1875). 


612  RIGHTS    OF   JUNIOR    LIENORS.  [§  505. 

in  relation  to  the  order  in  which  the  several  portions  of  the 
mortgaged  premises  shall  be  sold,  instead  of  directing 
a  reference  preHminary  to  the  decree  to  settle  the  order  of 
the  sale  of  the  different  parcels,  a  provision  should  be  inserted 
in  the  decree  of  sale  referring  it  to  some  suitable  person  to 
make  the  sale,  and  directing  that  if  it  shall  appear  to  such 
referee  that  separate  parcels  of  the  mortgaged  premises  have 
been  conveyed  or  incumbered  by  the  mortgagee,  or  by  those 
claiming  under  him  subsequent  to  the  lien  of  the  complain- 
ant's mortgage,  then  the  referee  shall  sell  the  mortgaged 
premises  in  parcels,  in  the  inverse  order  of  their  alienation, 
according  to  the  equitable  rights  of  the  parties  who  are  sub- 
sequent grantees  or  incumbrancers,  as  such  rights  shall  be 
made  to  appear  to  the  officer  making  the  sale. 

§  505.  Equitable  rights  between  subsequent  grantees 
and  lienors. — Where  the  entire  mortgaged  premises  are  to 
be  sold,  it  can  make  but  little  difference  which  parcel  is  sold 
first.  The  proceeds  will  go  into  a  common  fund  and  be 
taken  into  court  to  be  distributed  according  to  the  equitable 
rights  of  the  parties  to  the  suit.'  If  apart  of  the  mortgaged 
premises  is  incumbered  by  a  second  mortgage,  and  the 
residue  thereof  is  sold  and  conveyed  absolutely,  subsequent 
to  such  second  mortgage,  the  part  mortgaged  should  be 
sold  first  and  the  surplus  proceeds  of  that  sale,  beyond  the 
amount  of  principal  and  interest  due  on  the  second  mort- 
gage, should  be  applied  in  payment  of  the  first  mortgage 
before  resorting  to  the  sale  of  the  part  of  the  premises  which 
was  conveyed  absolutely.' 

The  right  to  have  the  lands  which  have  been  sold  by  the 
mortgagor  charged  on  foreclosure  with  the  payment  of 
the  mortgage  debt  in  the  inverse  order  of  alienation,  is 
not  strictly  a  legal  but  an  equitable  right,  and  is  governed 
by  those  equitable  principles  by  which  courts  of  equity 
protect  the  rights  of  sureties  or  those  who  stand  in  the 
relation  of  sureties.*     And  the  rights  and  duties  of  the  party 


•  Snyder  v,  Stafford,  11  Paige  Ch.  »  Kellogg  v.  Rand,  11  Paige  Ch. 

(N.  Y.)  71  (1844).    See  Oppenheimer      (N.  Y.)  59  (1844). 
V.  Walker,  3  Hun  (N.  Y.)  30  (1874).  »  Guion  v.  Knapp,   6  Paige  Ch 


§  506.]  EQUITIES    BETWEEN    GRANTEES.  613 

who  holds  the  mortgage  under  foreclosure  will  not  be 
affected,  unless  he  is  informed  of  the  facts  upon  which  the 
equitable  rights  of  the  parties  depend,  or  unless  he  has  sufifi- 
cient  notice  of  the  probable  existence  of  the  rights  to  make 
it  his  duty  to  ascertain  whether  such  equitable  rights  do,  in 
fact,  exist.* 

§  506.    Equities  between  grantees — Time  of  acquiring. 

— Where  subsequent  to  the  execution  of  a  mortgage,  the 
mortgaged  premises  are  sold  by  the  mortgagor  in  separate 
parcels  at  different  times  to  different  purchasers,  who  have 
no  notice  of  the  mortgage,  and  one  of  the  parties  takes  a 
conveyance  executed  and  delivered  prior  to  the  giving  of 
a  deed  to  another  party,  whose  later  conveyance  is  first 
recorded,  upon  a  sale  on  foreclosure  of  the  mortgage,  the 
purchaser  w:hose  deed  was  first  executed  and  delivered  will 
take  precedence  over  the  party  whose  deed  was  executed 
last  but  recorded  first,  and  he  will  have  a  prior  equity  in 
respect  to  the  order  in  which  the  several  parcels  are  to 
be  sold.' 

This  rule  does  not  apply,  however,  in  case  there  has  been 
a  condemnation  of  a  part  of  the  mortgaged  lands  for  a 
public  use  under  the  power  of  eminent  domain.  Thus,  in 
a  case  where,  after  five  mortgages  had  been  given  on  a  tract 
of  land,  a  small  strip  thereof  was  condemned  and  taken  for 
a  railroad,  and  the  owner  paid  therefor,  the  court  held  that 
the  decree  on  foreclosure  should  order,  first,  the  sale  of  all 
the  land,  except  the  strip  condemned  for  the  railroad,  to 
satisfy,  in  their  order,  all  five  of  the  mortgages,  and  in  case 
of  a  deficiency,  then  the  sale  of  that  strip.* 


(N.T.)  35,  42(1836).  See  Bernhardt  v.  v.  Pease,  8  Paige  Ch.  (N.  Y.)  277, 

Lymburner,  85  N.  Y.  172,  175  (1881).  285  (1840) ;  s.  c.  35  Am.  Dec.  683  ; 

'  Guion  V.    Knapp,   6  Paige  Ch.  Stuyvesant  v.  Hone,  1  Sandf.  Ch. 

(N.  Y.)  35,  42  (1836).     See  Colgrove  (K  Y.)  419.  423  (1844). 

V.  Tallman,  67  K  Y.  95,  98  (1876) ;  »  Ellison  v.  Pecare,  29  Barb.  (N. 

Howard  Ins.  Co.  v.  Halsey,  8  N.  Y.  Y.)  333  (1859) ;   YanSlyke  v.   Van 

271,273(1853);  Kendall  v.  Niebuhr,  Loan,  26  Hun  (N.  Y.)  344  (1882); 

45  N.  Y.  Supr.  Ct.  (13  J.  &  S.)  543,  Meacham  v.  Steele,  93  111.  135  (1879j; 

551  (1879) ;  s.  c.  58  How.  (N.  Y.)  Lausman    v.   Drahos,   8  Neb.    457 

Pr.    156,  163  ;    Stuyvesant  v.  Hall,  (1879). 

2  Barb.  Ch.  (N.  Y.)  151  (1847) ;  Patty  »  Foster  v.  Union  Nat.   Bank  of 


614       EIGHTS  OF  SUCCESSIVE  JUNIOR  MORTGAGEES.  [§507. 

Where  land  which  has  been  mortgaged  is  subsequently- 
sold  in  parcels  under  executions  issued  upon  various  judg- 
ments, upon  a  foreclosure  of  the  mortgage,  the  parcels 
should  be  liable  to  sale  in  the  inverse  order  of  the  dates 
when  the  respective  judgments  became  liens,  and  not  of  the 
dates  of  the  actual  sales  and  the  times  when  the  convey- 
ances were  made.*  But,  it  would  seem,  where  the  adminis- 
trator of  a  deceased  mortgagor  obtains  an  order  of  the 
probate  court  for  the  sale  of  a  portion  of  the  mortgaged 
premises  to  pay  debts  other  than  those  secured  by  the 
mortgage,  and  which  have  been  allowed  against  the  estate, 
that  the  residue  of  the  mortgaged  premises  owned  by  the 
heirs  of  the  mortgagor  must  be  first  resorted  to  for  the  satis- 
faction of  the  mortgage,  that  portion  held  by  the  purchaser 
at  an  administrator's  sale  being  only  secondarily  liable.' 

§  507.  Rights  of  successive  subsequent  mortgagees — 
New  Jersey  rule. — It  is  held  in  New  Jersey  that  the  rule 
for  selling  in  the  inverse  order  of  alienation  does  not  apply 
to  the  holders  of  subsequent  mortgages.  Thus,  where  a 
party  holds  a  second  mortgage  upon  part  of  the  premises 
embraced  in  a  first  mortgage,  upon  the  remaining  part 
whereof  another  person  holds  a  second  mortgage,  he  will  be 
entitled  to  have  the  two  parcels  sold  separately  under 
proceedings  to  foreclose  the  first  mortgage,  if  such  a  sale  can 
be  made  without  prejudice  to  the  rights  of  the  plaintiff ;  yet,  it 
the  property  be  sold  in  such  a  manner,  the  proceeds  of  the 
sales  of  the  several  parcels  must  pay  their  just  proportion  of 
the  amount  due  on  the  first  mortgage,  besides  the  costs, 
according  to  their  respective  values.* 

And  it  seems  that  where  the  plaintiff's  mortgage  covers 
several  parcels  of  land,  which  have  been  conveyed  by  subse- 
quent incumbrances,  the  decree  of  foreclosure  of  the  first 
mortgage  may  direct  the  whole  of  the  property  to  be  sold, 
and  the  proceeds  to  be  applied  to  satisfy  the  subsequent 


Rahway,  34  N.  J.  Eq.  (7  Stew.)  48  vania.     See  Carpenter  v.  Koons,  30 

(1881).  Pa.  St.  222  (1852). 

'  Wood  V.  Spalding,  45  Barb.  (N.  2]yiooi.evcijaiidler,59  01.466(1871). 

T.)  602  (1866).     It  would  seem  that  »  Pancoast  v.  Duval,  26  N.  J.  Eq. 

a  different  rule  prevails  in  Penusyl-  (11  C.  E.  Gr.)  445  (1875). 


§  508.]  SALE — SUBJECT  TO   MORTGAGE.  615 

incumbrances,  after  payment  of  the  complainant's  mortgage, 
and  this  may  be  done,  although  the  complainant's  mort- 
gage be  satisfied  by  the  sale  of  only  a  part  of  the  prem- 
ises.* 

Where  a  part  of  the  mortgaged  premises  has  been  mort- 
gaged a  second  time,  and  the  residue  thereof  has  been  sold 
and  conveyed  absolutely,  the  mortgage  being  but  a  qualified 
conveyance  of  the  property  and  the  mortgagor  still  retaining 
an  interest  therein,  the  part  mortgaged  should  be  sold  on  the 
foreclosure  of  the  prior  mortgage  before  resorting  to  that 
part  which  was  conveyed  absolutely ;  and  this  is  true  whether 
the  sale  of  a  portion  of  the  mortgaged  premises  was  made 
prior  or  subsequent  to  the  execution  of  the  second  mort- 
gage.* 

§  508.  Rights  of  purchaser  of  part  of  mortgaged 
premises  subject  to  mortgage. — Where,  in  a  conveyance 
of  real  estate,  it  is  expressly  stated  that  it  is  agreed  by  and 
between  the  parties  to  such  conveyance,  that  the  premises 
conveyed  are  subject  to  a  mortgage,  and  to  all  sums  due 
and  to  become  due  thereon,  as  between  the  grantor  and  the 
grantee,  the  entire  mortgaged  premises  remain  the  primary 
fund  for  the  payment  of  the  mortgage  debt.  And  should 
the  grantee  afterwards  be  compelled  to  pay  the  entire  debt 
to  the  mortgagee,  he  will  be  entitled  in  equity  to  be  subro- 
gated to  the  rights  of  the  latter  and  to  re-imburse  himself 
out  of  the  whole  mortgaged  premises.* 

And  a  subsequent  purchaser  of  the  premises  thus  con- 
veyed will  take  them  subject  to  the  same  equity,  although 
his  deed  may  not  in  terms  refer  to  the  Hen  of  the  mort- 
gage, nor  describe  the  lands  as  conveyed  subject  to  such 
lien.*  The  purchaser  of  an  equity  of  redemption,  at  a 
judicial  sale,  takes  the  land  burdened  with  the  mortgage, 
and  he  will  have  no  right,  therefore,  to  ask  that  some  other 


'  Ely  V.  Perrine,  2  N.  J.  Eq.  (1  H.  »  Jumel  v.  Jumel,  7  Paige  Ch.  (N. 

W.  Gr.)  396  (1841).  T.)  591  (1839). 

-  Kellogg  V.  Rand,  11  Paige  Ch.  ••  Jumel  v.  Jumel,  7  Paige  Ch.  (N. 

(N.  Y.)  59  (1844) ;  Sager  v.  Tupper,  T.)  591  (1839). 
35  Mich.  134  (1876). 


616  SALE — GEANTEE   ASSUMI]S'G    MORTGAGE.       [§509. 

fund  be  applied  to  the  discharge  of  the  mortgage  debt  in 
order  to  reheve  his  estate.* 

§  509.  Order  of  sale  in  parcels  where  subsequent 
grantee  of  part  has  assumed  mortgage.  —  Where  the 
owner  of  mortgaged  premises  sells  a  portion  thereof  to 
a  purchaser  who  assumes  and  agrees  to  pay,  as  a  part  of  the 
purchase  price,  the  whole  or  a  part  of  the  mortgage  debt, 
the  purchaser  is  legally  and  equitably  bound  to  pay  off  and 
to  satisfy  such  mortgage ;'  by  such  assumption  he  becomes 
the  principal  debtor,  and  the  part  of  the  land  conveyed  to 
him  the  primary  fund  out  of  which  the  mortgage  is  to  be 
paid,  the  mortgagor  remaining  simply  a  surety,  and  the 
remainder  of  the  property  being  liable  only  secondarily.' 

The  purchaser,  therefore,  is  bound  to  protect  the  mortga- 
gor and  his  grantees  from  all  liability  on  account  of  the  mort- 
gage debt.*  And  should  the  mortgagor  or  his  grantee  be 
compelled  to  pay  the  mortgage  debt,  or  any  part  thereof, 
he  will  be  entitled  to  an  assignment  of  such  mortgage  to 
enable  him  to  obtain  satisfaction  out  of  the  land  of  the 
party  who  assumed  the  payment  thereof.^ 

The  grantee  of  a  portion  of  the  mortgaged  premises, 
where  a  former  grantee  of  the  remainder  thereof  has  assumed 
and  agreed  to  pay  the  existing  incumbrance,  is  not  bound, 
to  take  any  notice  of  an  action  to  foreclose  the  mortgage  ;  it 
is  the  duty  of  the  grantee  who  assumed  and  agreed  to  pay 
the  mortgage  to  appear  therein  and  to  protect  the  interests 
of  his  surety,  and  if  he  fails  to  do  so  and  a  subsequent 
grantee  of  another  portion  of  the  premises  is  consequently 
deprived  of  his  land,  such  purchaser  will  be  liable  to  him  in 
damages,*  because  the  obligation  on  the  part  of  the  purchaser 
who  assumed  and  agreed  to  pay  the  mortgage  debt  is  not 
affected  by  the  subsequent  conveyance  from  the  mortgagor. 


»  Krueger  v.  Ferry,  41  N.  J.  Eq.  325  (1887) ;  Mirhigan  State  Ins.  Co. 

(14  Stew.)  482  (1S86).  v.  Soule,  51  Mich.^312  (1883). 

«  Torrey  v.  Bank   of    Orleans,    9  *  Wilcox  v.  Campbell,  lOG  N.  Y. 

Paige  Ch.  (N.  Y.)  649  (1842).     See  325  (1887). 

Warren  v.  Boynton,  2  Barb.  (N.  Y.)  »  Halsey  v.  Reed,  9  Paige  Ch.  (N. 

13  (1847).  Y.)  446  (1842). 

»  Wilcox  V.  Campbell,  106  N.  Y. 


§  510.1      SALE — GEAirrEE  ASSUMING    MOETGAGB.  617, 

! 

Where  such  purchaser  fails  to  protect  the  residue  of  the 
land  from  sale  under  the  mortgage,  he  will  be  liable  alike  to 
the  mortgagor  and  to  his  grantee  for  the  damages  thus 
caused.  The  measure  of  damages  will  be  the  fair  value  ofi 
the  land.* 

In  an  action  to  foreclose  a  mortgage  covering  two  farms, 
it  appeared  that  L.,  the  mortgagor,  conveyed  one  of  the 
farms  to  K.,  who  agreed  to  pay  $2,500  of  the  mortgage 
as  part  of  the  purchase  money.  L.  had  contracted  to 
purchase  a  piece  of  land  of  B.,  who  agreed  to  take  the 
bond  of  K.  secured  by  a  mortgage  on  the  farm  so  to  be  con- 
veyed to  him  for  part  of  the  purchase  price,  and  concur- 
rent with  the  conveyance  from  L.  to  K.  the  latter  exe- 
cuted his  bond  and  mortgage  to  B.  who  conveyed  to  L. 
as  agreed.  B.  knew,  when  he  took  his  mortgage,  of  the 
existence  of  the  prior  mortgage  and  of  K.'s  assumption  to 
pay  a  portion  thereof.  The  court  held  that  the  judgment 
properly  directed  the  sale  first  of  the  farm  conveyed  to  K., 
and  that  the  circumstances  under  which  the  mortgage  to  B. 
was  given  did  not  change  the  equitable  rights  of  the  parties.* 

§  510.  When  rule  for  sale  in  inverse  order  does  not 
apply. — The  rule  that  parcels  of  mortgaged  property  alien- 
ated subsequently  to  the  execution  of  the  mortgage,  are  to 
be  sold  in  the  inverse  order  of  their  alienation,  does  not 
apply  where  the  purchaser  of  one  of  the  parcels  has  assumed 
and  agreed  to  pay  the  mortgage  debt  ;*  and  where  a  mort- 
gagor sells  a  portion  of  the  mortgaged  premises,  and  in  the 
deed  of  conveyance  expressly  stipulates,  that  it  is  "subject 
to  the  payment  by  the  said  grantee  of  the  existing  liens 
upon  said  premises,"  the  rule  does  not  apply.* 


•  Wilcox  V.  Campbell,  106  N.  T.  (1842) ;  Halsey  v.  Reed,  9  Paige  Ch. 
825  (1887).  (N.  T.)  446  (1842) ;  Ross  v.  Haines, 

»  Wilcox  V.  Campbell,  106  N.  Y.  5  N.  J.  Eq.  (1  Halst.)  632  (1847) ; 

825(1887).  Engle  v.  Haines,   5  K   J.   Eq.   (1 

»  Bowne  v.  Lynde,  91  N.  T.  93  Halst.)  186  (1845) ;  s.  c.  43  Am.  Dec. 

(1883).  624. 

•  Warren  v.  Boynton,  2  Barb.  (N.  *  Brisco  v.  Power,  47  111.  447 
T.)  13  (1847) ;  Torrey  v.  Bank  of  (1868) ;  Hoy  v.  Bramball,  19  N.  J. 
Orleans,  9  Paige  Ch.  (N.  T.)  649  Eq.  (4  C.  E.  Gr.)  563  (1868). 


618  PARCELS    KOT    SOLD    IN    INVERSE  ORDER.      [§511. 

And  if  by  the  terms  of  the  sale  of  a  part  of  the  mortgaged 
premises,  the  mortgage  is  to  remain  a  common  charge  upon 
the  whole  premises,  and  is  to  be  paid  by  the  mortgagor 
and  the  purchaser,  and  there  is  no  special  agreement  as  to 
the  proportion  which  each  one  shall  pay,  the  parcels  will 
be  subject  to  their  pro  rata  share  of  the  incumbrance.* 
Where  a  purchaser  of  a  portion  of  the  mortgaged  premises 
assumes  and  agrees  to  pay  the  mortgage  debt,  or  a  specified 
portion  thereof,  and  afterwards  conveys  the  part  purchased 
to  a  person  who  has  notice  of  his  agreement  and  obligation, 
the  equitable  rights  of  such  second  purchaser  will  be  as 
fully  bound  as  are  those  of  his  vendor." 

Thus,  where  after  the  execution  of  a  mortgage,  a 
portion  of  the  premises  were  sold  to  a  party  who  assumed 
and  agreed  to  pay  the  mortgage,  and  such  purchaser  after- 
wards mortgaged  the  part  purchased  to  a  party  having  notice 
of  the  assumption,  it  was  held  that  such  parcel  remained  the 
primary  fund  for  the  payment  of  the  debt,*  and  that  the 
remaining  portion  of  the  premises  covered  by  the  first 
mortgage,  was  merely  security  for  the  payment  of  the 
balance  of  the  debt,  if  any,  remaining  after  exhausting 
the  primary  fund.* 

§  511.  Contribution  according  to  value— Valuation, 
when  made. — Where  land  which  has  been  mortgaged  is 
subsequently  conveyed  to  different  parties,  the  mortgage 
remaining  a  common  charge  upon  the  whole  land  so  that  each 
part  will  be  required  to  bear  its  due  proportion  of  the  debt, 
equity  will  compel  every  part  to  a  just  contribution.  Such 
contribution  will  be  enforced /r<?  rata  according  to  the  value 
of  the  several  parcels.     It  has  been  said  that  in  making  the 


»Brisco   V.    Power,   47    111.    447  » Steere  v.  Childs,   15    Hun    511 

(1868) ;  Hoy  v.    Bramhall,  19  N.  J.  (1878). 

Eq.  (4  C.  E.  Gr.)  563  (1868).  *  Warfield  v.  Crane,  4  Abb.   Ct. 

^Torrey    v.   Bank  of  Orleans,   9  App.  Dec.  (N.  Y.)  525(1868) ;  Woods 

Paige  Ch.  (N.  Y.)  649  (1843) ;  Ptoss  v.   Spalding,  45  Barb.   (N.  Y.)  607 

V.  Haines,  5  K  J.  Eq.  (1  Halst.)  633  (1866) ;  Stuyvesant  v.  Hall,  2  Barb. 

(1847):  Engle  V.  Haines,  5  N.  J.  Eq.  Ch.  (N.   Y.)  151  (1847);    Steere  v. 

(1  Halst.)  186  (1845) ;  s.  c.  43  Am.  Childs.    15  Hun  (N.    Y.)  511,   518 

Dec.  624.  (1878). 


§512.]   contributiojS^ — valuation  of  parcels.        C19 

apportionment  of  the  burden  which  each  parcel  should  bear, 
due  regard  should  be  had  to  the  relative  value  of  each  parcel 
at  the  date  of  the  mortgage.' 

But  in  some  cases  it  is  held  that  the  distribution  of  the 
burden  of  paying  the  mortgage  should  be  according  to  the 
value  of  the  parcels  when  they  are  sold."  Chancellor  Kent 
has  held  that  the  parcels  are  bound  to  contribute  according 
to  their  actual  relative  value,  and  not  according  to  the 
prices  for  which  they  are  sold  at  the  sheriff's  sale,"  from 
which  it  has  been  inferred  by  some  courts  that  the  relative 
value  of  the  parcels  is  to  be  estimated  at  the  time  when  they 
are  called  upon  for  contribution.* 

§  512.  Where  the  mortgagee  has  other  securities  and 
there  are  subsequent  mortgagees. — Where  a  mortgage 
has  been  executed  upon  a  whole  tract  of  land  and  subse- 
quently another  mortgage  is  executed  upon  a  portion  of  the 
land,  the  first  mortgagee  will  be  required  to  exhaust  that 
portion  of  the  land  not  covered  by  the  second  mortgage 
before  resorting  to  the  latter  portion.*  And  where  a  mort- 
gagee holds  a  mortgage  on  two  tracts  of  land  securing  his 


■  Stevens  v.  Cooper,  1  Johns.  Ch.  c.   8  Am.    Dec.    554 ;     Stevens    v. 

(N.  Y.)  425  (1815) ;  s.  c.  7  Am.  Dec.  Cooper,  1  Johns.    Ch.  (N.  Y.)  425 

499  ;  Morrison  v.  Beckwith,  4  T.  B.  (1815);  s.  c.  7  Am.  Dec.  499  ;  Cheese- 

Mon.  (Ky.)  73  (1827) ;  s.  c.  16  Am.  brough    v.    Millard,   1  Johns.    Ch. 

Dec.  736.     See  Lyon  v.  Bobbins,  45  (N.  Y.)  409  (1815) ;  s.  c.  7  Am.  Dec. 

Conn.  513(1878);  Dickey  V.  Thomp-  494;   James  v.   Hubbard,    1   Paige 

son,   8  B.   Men.  (Ky.)  312  (1847);  Ch.  (N.  Y.)  228,  235(1825) ;  Terry  v. 

Hall  V.  Morgan,  79  Mo.  47  (1883).  Rosell,  33  Ark.  478  (1877)  ;  Andreas 

2  Burk  V.  Chrisman,  3  B.  Mon.  v.  Hubbard,  50  Conn.  351  (1882) ; 
(Ky.)  50  (1842).  Chicago  &  G.  AV.  R.  Co.  v.  Peck. 

3  Cheesebrough  v.  Millard,  1  112  111.  408(1 8S5);  Swift  v.  Conboy, 
Johns.  Ch.  (N.  Y.)  409  (1815) ;  s.  c.  12  Iowa,  444  (1861) ;  Sibley  v. 
7Am.  Dec.  494.  Baker,  23- Jlich.   312  (1871) :  Trow- 

*  Dickey  V.  Thompson,  8  B.  Mon.  bridge    v.    Harleston,    Walk.    Ch. 

(Ky.)  312,  316  (1847).  (Mich.)  185  (1843);  Warwick  v.  Ely, 

5  See  lugalls  v.  Morgan,  10  N.  Y.  29  N.  J.   Eq.   (2  Stew.)  82  (1878) ; 

178(1854);  Torkifc  Jersey  Steamboat  Ramsey's  Appeal,  2  Watts  (Pa.)  228 

Ferry  Co.  v.  Associates  of  the  Jer-  (1834);  Fowler  v.  Barksdale,  Harp. 

sey  Co.,    Hopk.    Ch.   (N.    Y.)    460  (S.  C.)  Eq.    164    (1824);    Scott  v. 

(1824);  Evertson  v.  Booth,  19  Johns.  Webster,  44  Wis.    185  (1878).     Sea 

(X.  Y.)  486  (1822) ;  Hayes  v.  Ward,  also  Lanoy  v.   Athol,   2  Atk.  444, 

4  Johns.  Ch.  (N.  Y.)  123  (1819) ;  s.  446  (1742);    Wright  v.  Nult,  1  H. 


620  EIGHTS    OIT   SUBSEQUENT   MORTGAGEES.        [§  512. 

debt,  and  there  have  been  subsequent  conveyances  or  mort-- 
gages  of  one  of  the  tracts,  he  will  be  required  to  exhaust  his 
remedies  against  the  portion  which  has  not  been  mortgaged 
or  conveyed  before  resorting  to  the  other  portion.' 

If  the  mortgagee  of  the  north  half  of  a  lot  of  land,  having 
notice  that  it  is  equitably  chargeable  with,  and  of  sufficient 
value  for  the  payment  of  a  prior  mortgage  upon  the  whole 
lot,  becomes  the  purchaser  of  such  prior  mortgage,  he  can 
not,  in  equity,  enforce  it  against  the  remainder  of  the  lot.*  In 
such  a  case  the  north  half,  being  chargeable  with  the  pay- 
ment of  the  mortgage  upon  the  whole  lot,  must  first  be 
applied  to  that  purpose  ;  and  if  it  is  sufficient  to  satisfy  the 
debt  in  full,  the  mortgage  will  be  held  discharged  as  to 
the  remainder  of  the  premises.' 

But  a  trustee  mortgagee,  whose  mortgage  is  a  senior  lien 
on  land,  can  not  be  deprived  of  such  lien,  merely  because  he 
may  have  a  right  to  satisfy  the  mortgage  debt  out  of  a  bond 
executed  by  his  predecessor  in  the  trust,  by  virtue  of  which 
the  mortgage  came  to  him.* 

It  has  been  held,  where  there  are  mortgages  of  lands  and 
of  chattels  to  secure  the  payment  of  the  same  debt,  and  the 
mortgagee  seizes  the  chattels  after  condition  broken,  that  a 
subsequent  purchaser  of  the  land  from  the  mortgagor  will 
have  a  right  to  compel  the  mortgagee  to  apply  the  value  of 
the  chattels  seized  to  the  satisfaction  of  the  mortgage  debt ; 
and  that  if  he  loses  the  chattels  by  his  neglect,  he  will  be 
compelled  to  deduct  their  value  from  the  amount  due,  and 
the  mortgage  can  be  foreclosed  only  for  the  balance  remain- 
ing unpaid  after  such  deduction.* 


Bl.  150  (1789) ;  Aldrich  v.  Cooper,  *  Shuey   v.   Latta,    90    Ind.    136 

8  Ves.  382,  395  (1803) ;  Averall  v.  (1883). 

Wade,  Lloyd  &  Goold,  Cas.  Temp.  *  Moody  v.  Haselden,  1  S.  C.  (N. 

Sugden,  252  (1835).  S.)  129  (1869).   See  Fowler  v.  Barks- 

>  Raun  V.  Reynolds,   11   Cal.   14  dale.  Harp.  (S.  C.)  Eq.  164  (1824) : 

(1858) ;    Andreas    v.   Hubbard,    50  Gist  v.  Pressley,  2  Hill  (S.  C.)  Eq. 

Conn.  351(1882);  Burpee  v.  Parker,  318  (1835);    Gadberry  v.  McClure, 

24  Vt.  567  (1852).  4  Strob.  (S.  C.) Eq.  175  (1850) ;  Bank 

«  Mclntire  v.  Parks,  59  N.  H.  258  of  Hamburg  v.  Howard,  1  Slrob. 

(1879).  (S.  C.)  Eq.  173  (1846). 

«  Mclntire  v  Parks,  59  N.  H.  258 
(1879), 


§  513.] 


POETION   ALIENATED    RELEASED. 


621 


§  513.  Rule  where  portions  alienated  have  been 
released. — From  the  equitable  doctrine  of  the  sale  of  mort- 
gaged premises  in  the  inverse  order  of  alienation  subsequent 
to  the  execution  of  the  mortgage,  it  follows  as  a  corollary 
that  if  the  mortgagee,  with  actual  notice  of  the  fact  of  the 
subsequent  conveyances  of  the  parts  of  the  mortgaged  prem- 
ises, releases  from  the  mortgage  one  or  more  parcels  of  the 
premises  primarily  liable,  he  thereby  releases  pro  rata  the  por- 
tion secondarily  liable,'  and  he  can  not  enforce  his  lien  against 
the  residue  without  deducting  the  value  of  the  part  released 
from  the  amount  due  on  the  mortgage.' 

In  case  the  value  of  the  property  released  is  equal  to  the 
full  amount  of  the  mortgage  debt,  the  mortgagee  will,  of 
course,  lose  his  debt  so  far  as  the  lien  of  his  mortgage  is 
concerned.  But  it  has  been  held  that  where  the  subsequent 
purchasers  or  mortgagees  are  not  prejudiced  by  the  release, 
as  where  the  mortgagor  had  no  title  to  the  lot  released  at  the 
time  the  first  mortgage  was  executed,  this  rule  will  not 
apply.* 


•  Iglehart  v.  Crane,  42  HL  261, 
268  (1866). 

•  Stuy  vesant  v.  Hall,  2  Barb.  Ch. 
(N.  Y.)  151  (1847);  Stevens  v. 
Cooper,  1  Johns.  Ch.  (N.  Y.)  425 
(1815);  s.  c.  7  Am.  Dec.  499; 
Cheesebrough  v.  Millard,  1  Johns. 
Ch.  (N.  Y.)  409  (1815) ;  a  c.  7  Am. 
Dec.  494  ;  Patty  v.  Pease,  8  Paige 
Ch.  (N.  Y.)  277  (1840) ;  8.  c.  35  Am, 
Dec.  683  ;  Skeel  v.  Spraker,  8  Paige 
Ch.  (N.  Y.)  195  (1840);  Guion  v. 
Knapp,  6  Paige  Ch.  (N.  Y.)  35 
(1836) ;  Bu-nie  v.  Main,  29  Ark.  591 
(1874);  Iglehart  v.  Crane,  42  HI. 
261,  268  (1866) ;  Matteson  v.  Thomas, 
41  111.  110  (1866) ;  Taylor  v.  Short, 
Adm'r,  27  Iowa,  361  (1869) ;  George 
T.  Wood,  91  Mass.  (9  Allen),  80 
(1864);  Chase  v.  Woodbury,  89 
Mass.  (6  Cush.)  143  (1850);  Park- 
man  T.  Welch,  36  Mass.  (19  Pick.) 
231  (1837);  James  v.  Brown,  11 
Mich.  25  (1862) ;  Harrison  v.  Guerin, 


27  N.  J.  Eq.  (11  C.  E.  Gr.)  219 
(1876) ;  Mount  v.  Potts,  23  N.  J.  Eq. 
(8  C.  E.  Gr.)  188  (1872) ;  Hoy  v. 
Bramhall,  19  N.  J.  Eq.  (4  C.  E.  Gr.) 
563  (1868)  ;  Vanorden  v.  Johnson, 
14  N.  J.  Eq.  (1  McCar.)  376  (1862) ; 
Gaskill  V.  Sine,  13  N.  J.  Eq.  (2 
Beas.)  400  (1861) ;  s.  c.  78  Am.  Dec. 
105  ;  Reilly  v.  Mayer,  12  N.  J.  Eq. 
(1  Beas.)  55  (1858) ;  Blair  v.  Ward, 
10  N.  J.  Eq.  (2  Stockt.)  119  (1854) ; 
Mickle  V.  Rambo,  1  N.  J.  Eq.  (1 
Saxt.)  501  (1832) ;  Shannon  v.  Mar- 
selis,  1  N.  J.  Eq.  (1  Saxt.)  413  (1831); 
Taylor  v.  Maris,  5  Rawle  (Pa.)  51 
(1835) ;  Miller  v.  Rogers,  49  Tex. 
398  (1878);  Lyman  v.  Lyman,  32 
Vt.  79  (1859) ;  Deuster  v.  McCamus, 
14  Wis.  307  (1861).  But  see  Stuy- 
vesant  v.  Hone,  1  Sandf.  Ch.  (N.  Y.) 
419  (1844). 

*  Taylor  v.  Short's  Adm'r,  27 
Iowa,  361  (1869) ;  s.  c.  1  Am.  Rep. 
280. 


622  PABCELS    ATTRVATFn    KEIXASED.  [§  514. 

A  creditor  having  a  Hen  upon  two  parcels  of  land  may 
release  the  lien  from  one  without  impairing  his  legal  claim 
upon  the  other,  if  he  has  no  reason  to  suppose  that  such 
discharge  will  interfere  with  the  equitable  rights  of  any  other 
person.'  To  affect  the  mortgagee,  he  must  have  actual 
notice  of  the  subsequent  transfer  of  a  portion  or  portions  of 
the  mortgaged  premises,  before  a  release  by  him  of  a  portion 
of  such  premises  will  bar  his  right  to  foreclose  his  mortgage 
upon  the  remaining  portion.* 

A  mortgagee  is  not  required  to  search  the  records  from 
time  to  time  to  ascertain  whether  subsequent  incumbrances 
have  been  placed  upon  the  mortgaged  premises,  or  whether 
a  portion  thereof  has  been  transferred  ;*  furthermore,  the 
record  is  not  constructive  notice  to  the  prior  mortgagee 
of  such  incumbrance/  And  where  an  attorney  has  been 
employed  by  a  mortgagee  to  foreclose  a  mortgage  upon  a 
particular  piece  of  property,  and  such  attorney  learns,  from 
other  sources,  and  not  in  connection  with  his  business  of 
foreclosing  the  mortgage  on  such  property,  that  there  are 
subsequent  mortgages  or  conveyances  of  a  part  of  the 
mortgaged  premises,  such  knowledge  of  the  attorney  will 
not  be  deemed  notice  to  his  client,  the  prior  mortgagee.' 

§  514.  Rule  for  order  of  sale  where  the  mortgage 
covers  homestead  and  other  lands. — Where  the  mort- 
gage covers  the  homestead  of  a  family,  together  with  other 


'  Stuyresant  v.   Hone,   1   Sandf ,  Bimie  v.  Main,  29  Ark.  591  (1874) ; 

Ch.  CN".  T.)  419  (1844) ;   Guion  v.  Ritch  v.  Eichelberger,  13  Fla.  169 

Knapp.  6  Paige  Ch.  (X.  T.)  35,  43  (1869);  Cliasev.  Woodbuiy,60:Mass. 

(1836).  (6  Cush.)  143  flSoO);  James  v.  Brown, 

*  Stuyresant  V.  Hall,  2  Barb.  Ch.  11    :Mich.    25    (1862);    Brown    v. 

ON".   Y.)  151  (1847) ;    King  v.   Mc-  Simons,  44  2s.  H.  475  (1863j ;  Shan- 

Vickar,  8  Sandf.  Ch.  (N.  T.)  192  non  v.   IMarselis,   1    N.   J.    Eq.   (1 

(1846)  ;  Blair  v.  Ward,  10  X.  J.  Eq.  Saxt.)  413  (1S31) ;  Taylor  v.  Maris, 

(2  Stockt.)  119  (1854).  5  Rawle  (Pa.)  51  (1835) ;  Lyman  v. 

»  Howard  Ins.  Co.  v.  Halsey,  8  N.  Lyman,  32  Yt  79  (1859). 

T.  271  (1853) ;   Talmage  v.  Wilgers,  *  Howard  Ins.  Co.  v.  Halsey,  8  N. 

1  X.  Y.  Leg.  Obs.  42  (1842).  ^See  Y.  271  (1853; ;  Talmage  v.  Wilgers, 

Cheesebrough  v.  :Millard,  1  Johns.  1  N.  Y.  Leg.  Obs.  42  (1842). 

Ch.  (N.  Y.)^409  (1815) ;  8.  c.  7  Am.  »  Howard  Ins.  Ck>.  v.  Halsey,  8  N. 

Dec.     494 ;    Stuyvesant    v.    Hone.  Y,  271  (1853). 
1  Sandf.  Ch.   (N.  Y.)  419  (1844); 


0  514.]    OEDER  OF  SALE HOMESTEAD  LANDS.       623 

lands,  the  mortgagor  will  have  no  right  to  require,  and  the 
court  will  not  be  warranted  in  granting,  an  order  directing 
that  the  other  lands  be  sold  first  and  that  the  homestead  be 
resorted  to  only  in  case  there  is  a  deficiency.*  The  mort- 
gagee may  release  the  other  land  and  still  retain  his  Hen 
upon  the  homestead.'  And  this  is  true  although  the 
remainder  of  the  property  mortgaged,  without  the  home- 
stead, is  sufficient  to  satisfy  the  mortgage.* 

And  it  has  been  said  that  where  the  mortgage  covers  the 
homestead  together  with  other  lands,  the  mortgagor  will  have 
no  right  to  require  the  latter  property  to  be  sold  for  the  pay- 
ment of  the  mortgage  debt  before  resorting  to  the  homestead.* 
The  fact  that  a  part  of  the  property  is  a  homestead  does  not 
alter  the  rule  requiring  a  party  having  security  on  two 
funds  first  to  exhaust  his  remedy  against  the  fund  upon 
which  he  alone  is  secured,  if  there  is  another  party  having 
security  on  the  other  part.* 


'  Dodds   V.    Snyder,    44   HI.    53  ative  relief  to  her  upon  answer,  but 

(1867) ;  Cimpman  v.  Lester,  12  Kan.  is  for  the  benefit  of  the  complainant, 

592  (1874) ;  Searle  v.  Chapman,  121  and  is  ■warranted  imder  the  prayer 

Mass.  19  (1876);  White  v.  Polleys,  20  in  the  bill  for  "such  other  and  fur- 

Wis.  503  (1866);   Jones  v.  Dow,  18  ther  relief  as  equity  may  require." 

"Wis.  241  (1864).  »  Chapman  v.  Lester,  12  Kan.  592 

But  a  contrary  rule  prevails  in  (1874).      See  Dodds  v.    Snyder,  44 

some  of  the  states.     See  McLaughlin  HI.  53  (1867) ;   Searle  v.  Chapman, 

V.  Hart,  46  Cal.  639  (1873) ;  Dickson  121  Mass.  19  (1876). 

V.  Chom,  6  Iowa,  19  (1858).  It  is  said  »  Searle  v.  Chapman,  121  Mass.  17 

in  the  case  of  Hall  v.  Harris,  113  111.  (1876). 

410,413  (1885),  that  on  the  foreclosure  *  See  Chapman  v.  Lester,  12  Kan. 

of  such  a  mortgage  there  can  be  no  592  (1874) ;  Searle  v.  Chapman,  121 

sale  until  the  homestead  is  assigned  Mass.  19  (1876) ;  White  v.  Polleys, 

to  the  widow  ;  and  that  a  decree  of  20  Wis.  503  (1866). 

foreclosure  directing  an  assignment  *  In  re  Sauthofi,  7  Biss.  C.  C.  167 

of  the  homestead  before  sale  of  the  (1876). 
residue  is  not  the  granting  of  affirm- 


CHAPTER  XXV. 


CONDUCT  OF  SALE. 

PERSONAL  ATTENDANCE  OF  REFEREE— DISCRETIONARr  POWERS  ON 

SALE— ADJOURNMENTS— WHO  MAY  PURCHASE— REPORT  OF 

SALE  BY  REFEREE-CONFIRMATION  THEREOF. 


515.  Personal  attendance   of  the 

officer  conducting  the  sale. 

516.  Discretionary  powers  of  re- 

feree   to    sell  —  Powei's   of 
loan  commissioners. 

517.  Postponement  and  adjourn- 

ment of  sale. 

518.  Publishing  notice  of  adjourn- 

ment— Adjourning  sale  un- 
der statutory  foreclosure. 

519.  Holding  sale  open. 

520.  Who   may    purchase    on    a 

foreclosure  sale. 


521.  Purchase  by  mortgagee. 
523.  Memorandum  of  sale. 

523.  Report  of  officer  making  sale. 

524.  What  referee's  report  should 

show. 

525.  Confirmation  of  referee's  re- 

port. 

526.  Referee's  report  should  state 

amount  of  deficiency. 

527.  Substituted  or  supplemental 

report  of  referee  —  Notice 
to  defendant. 


§  515.  Personal  attendance  of  the  officer  conducting 
the  sale. — It  is  the  duty  of  the  referee  appointed  by  the 
court  to  conduct  the  sale  on  a  mortgage  foreclosure,  to 
attend  the  sale  in  person  at  the  time  and  place  appointed. 
The  sale  must  be  made  at  public  auction,  to  the  highest 
bidder,  unless  the  court  has  otherwise  directed.  It  must 
be  made  by  the  ofificer  appointed  by  the  decree  of  foreclosure 
and  sale,  or  designated  by  the  statute,'  or  under  his  immedi- 
ate personal  supervision  and  direction;'  he  must  receive 
bids  as  long  as  they  are  offered,  waiting  a  reasonable  length 
of  time  after  a  bid  is  made  for  others,  and  if  no  other  is 
made  he  must  strike  off  the  premises  to  the  highest  bidder." 

In  Heyer  v.  Deaves,*  it  was  held  that  all  sales  of  mort- 
gaged premises  under  a  decree  of  the  court  must  be  made 


'  Heyer  v.  Deaves,  2  Johns.  Ch.      R.  R.  Co.,  70  U.  S.   (3  Wall.)  196, 


(N.  Y.)  154  (1816).     See  May  v. 
May,    11  Paige    Ch.   (N.  Y. )    201 
(1844). 
*  Blossom  V.  Milwaukee  «&  Chicago 


205  (1865) ;  bk.  18  L.  ed.  43. 

3  Bicknell  v.  Byrnes,  23  How.  (N. 
Y.)  Pr.  486  (1862). 

*  2  Johns.  Ch.  (N.  Y.)  154  (1816). 


QZi 


§  516.]         OFilCEB    SELLING    MUST   BE   PRESENT.  625 

by  a  master,*  or  under  his  immediate  direction,"  and  if  such 
officer  fails  to  be  present  and  to  direct  such  sale,  it  will  be 
irregular  and  may  be  set  aside  upon  motion.  The  court 
held  in  that  case,  that  "  the  statute  intended  that  such  sales 
should  be  under  the  immediate  direction  of  a  known  and 
responsible  public  officer.  An  under  or  deputy  master  is 
not  an  officer  known  in  the  law."  The  case  of  Heyer  v. 
Deaves  was  distinguished  in  Connolly  v.  Belt,'  where  the 
court  held  that  "  neither  the  New  York  statute  nor  that 
case  is  applicable  to  the  present  case,  which  is  a  sale  under 
a  common  deed  of  trust.  The  time,  place,  terms  and 
conditions  were  such  as  were  deemed  by  the  trustee  most 
for  the  interest  of  the  parties  concerned  in  the  said  sale,  as 
appears  by  the  answer  of  the  trustee ;  and  a  sale  made  by 
an  agent  of  the  trustee,  according  to  the  terms  and  condi- 
tions at  the  time  and  place  prescribed,  is  a  sale  by  the 
trustee,  there  being  no  law  requiring  him  to  be  present 
personally  at  the  auction."  The  distinction,  it  seems,  is 
between  what  involves  a  discretion  and  a  power  to  do  a 
certain  specific  act.  In  the  former  case  the  trustee  must 
act  in  person ;  in  the  latter  case  he  was  authorized  to 
delegate  his  power.* 

§  516.  Discretionary  powers  of  referee  to  sell — Powers 
of  loan  commissioners. — The  reason  for  requiring  the 
presence  and  personal  supervison  of  the  officer  delegated  to 
make  the  sale,  is  said  to  be  that  the  statute  imposes  a  duty 
upon  such  officer,  and  presupposes  that  he  will  ascertain  the 


•  The  old  master  in  chancery  has         *  Powell    v.    Tuttle,    8    N.    T. 

been    supplanted    by    the    modern  396    ( 1850 ).       Thus,     where     an 

referee.  administrator   is   authorized   by   a 

«  See  Reynolds  v.  Wilson,  15  111.  decree  of  court  to  sell  land  for  the 

394  (1854) ;  Blakey  v.  Abert,  1  Dana  payment  of  debts,  the  sale  must  be 

(Ky.)  185  (1883) ;  Meyer  v.  Bishop,  made  by  him  personally  or  by  his 

27  K   J.   Eq.   (12  C.   E.  Gr.)  145  agent  in  his  presence.     Sebastian  v. 

(1876) ;  Blossom  v.  Milwaukee  &  C.  Johnson,  72  111.  283  (1874) ;  s.  c.  23 

R.  Co.,  70  U.  S.  (3  Wall.)  205  (1865);  Am.  Rep.  l45.     See  Berger  v.  Duff, 

bk.  18  L.  ed.  43,  46 ;  Williamson  v.  4  Johns.    Ch.   (N.  Y.)  368  (1820) ; 

Berry,  49  U.  S.  (8  How.)  495,  544  Taylor    v.    Hopkins,    40    111.    442 

(1850);  bk.  12  L.  ed.  1170,  1191.  (1866). 


»  5  Cr.  C.  C.  405,  408  (1838). 


(40) 


626  DISCKETIONARY    POWERS    OF    REFEREE.        [§516. 

situation  of  the  property  before  the  time  of  the  sale,  and 
will  sell  it  as  the  best  interests  of  the  parties  may  require. 
Again,  there  may  be  cases  in  which  the  exercise  of  his 
discretionary  powers  will  become  necessary,  in  which  case  the 
honest  exercise  of  such  discretion  is  said  to  be  as  final  as  a 
decision  in  like  cases  of  any  judicial  tribunal.'  And  in  such 
cases  it  seems  that  the  parties  have  a  legal  right  to  whatever 
possible  benefit  may  follow  from  the  honest  exercise  of  such 
discretion.' 

The  exercise  of  such  discretion  can  not  be  delegated,  and 
for  that  reason  a  sale  made  by  a  person  delegated  by  the 
referee,  or  other  officer,  in  his  absence,  may  be  set  aside 
as  irregular,  on  a  direct  application  made  in  the  course  of 
the  proceedings,  although  a  deed  made  by  the  officer  will 
pass  the  title  to  the  premises  and  will  be  valid  and  effective 
in  collateral  proceedings,  as  the  act  of  an  officer  de  facto} 

Thus,  it  has  been  held  that  the  New  York  statute,  creating 
the  office  of  loan  commissioners,  and  investing  such  officers 
-\ith  certain  discretionary  powers  and  providing  for  the  loan- 
ing of  moneys  on  mortgage  security  and  for  the  foreclosure  of 
such  mortgages  on  failure  to  pay  the  interest  or  principal, 
invests  them  with  a  special  authority  and  must  be  strictly  pur- 
sued ;*  consequently  the  sale  of  mortgaged  premises  made  by 
one  loan  commissioner  in  the  absence  of  his  associates  has  been 
held  to  be  irregular,  and  to  be  ineffective  to  pass  the  title  of  the 
premises  to  the  purchaser,* 


'  O'Donnell  v.  Lindsey,  38  N.  Y.  Bishop,  27  N.  J.  Eq.  (12  C.  E.  Gr.) 

Supr.  Ct.  (7  J.  «&  S.)  523,  529(1873),  141    (1876).      See    also    People   v. 

citing  Litchfield  v.  Register,  76  U.  S.  Collins,  7  Johns.  (N.  Y.)  549  (1811) ; 

(9  Wall.)  577  (1869) ;  bk.  19  L.  ed.  Potter  v.  Luther,  3  Johns.  (N.  Y.) 

682 ;  The  Secretary  v.  McGarrahan,  431    (1808) ;    Wilcox    v.    Smith,    5 

76  U.  S.  (9  Wall.)  311  (1868) ;  bk.  19  Wend.  (N.  Y.)  231  (1830) ;  s.  c.  21 

L.  ed.  64 ;  Gaines  v.  Thompson,  74  Am.  Dec.  213 ;  State  v.  Carroll,  38 

U.  8.  (7  WaU.)  349  (1868) ;  bk.  19  Conn.  449  (1871) ;  9  Am.  Rep.  409. 
L.  ed.  62.  ♦  Powell  v.  Tuttle,  3  N.  Y.  396, 

«  O'Donnell  v.  Lindsey,  39  N.  Y.  400  (1850).     See  Sherwood  v.  Reade, 

Supr.  Ct.  (7  J.  «&  S.)  523,  529.  530  7   Hill  (N,  Y.)  431  (1844) ;    Sharpe 

(1873).     See  RusseU  v.  Conn,  20  N.  v.  Speir,  4  Hill  (N.  Y.)  76  (1843) ; 

Y.  81  (1859).  Downing  v.  Rugar,  21  Wend.  (N. 

» Meyer   v.    Patterson,   28  N.  J.  Y.)  178  (1839) ;  s.  o.  34  Am.  Dec 

Eq.  (1  Stew.)  239  (1877) ;  Meyer  v.  223. 


§517.]         POSTPONING    AND    ADJOURNING    SALE.  627 

In  the  case  of  King  v.  Stow,*  it  was  said  that  the  assent 
of  the  absent  commissioner  was  to  be  presumed,  as  no 
dissent  was  afterwards  expressed  by  him,  and  he  united  in 
the  deed  to  the  purchaser,  and  that  though  it  was  the  duty 
of  both  commissioners  to  be  present  at  the  sale,  yet  the 
absence  of  one  of  them  from  necessity  or  just  cause  would 
not  affect  the  validity  of  a  sale  otherwise  regular  and  fair. 
But  this  case  was  directly  overruled  by  the  decision  in 
Powell  V.  Tuttle.' 

§  517.  Postponement  and  adjournment  of  sale.— The 
sale  of  mortgaged  premises  may  be  postponed  from  time  to 
time,  or  an  adjournment  may  be  had  to  another  place,  unless 
the  place  of  sale  is  fixed  by  the  decree  of  foreclosure,*  in  the 
discretion  of  the  referee  or  other  officer  making  the  sale, 
either  for  want  of  bidders  or  for  any  other  reasonable  cause, 
inducing  him  to  believe  that  a  future  day  or  another  place 
will  be  more  favorable  for  making  an  advantageous  sale.* 

The  application  for  a  postponement  or  adjournment  gener- 
ally comes  from  some  one  or  more  of  the  interested  parties 
and  is  not  infrequently  made  by  the  plaintiff's  attorney  ;  but 
the  referee  possesses  a  discretionary  power  in  the  matter  and 
should  not  be  governed  by  the  directions  of  the  plaintiff's 
attorney,  nor  by  the  request  of  other  parties  ;  there  may  be 
occasions  when  it  will  be  the  duty  of  the  officer  to  adjourn 
the  sale  without  the  request  of  any  one,  and  even  against  the 
express  wishes  of  a  party  in  interest.'     The  referee  is  not  a 


»  York  V.  Allen,  30  N.  Y.  104,  111  Bank  of    Maryland  v.   Clarke,  28 

(1864) ;  Pell  v.  Ulmar,  18  N.  Y.  139,  Md.  145  (1867). 

144  (1858) ;  s.   c.  21  Barb.   (N.  Y.)  *  Tinkom    v.    Purdy,    5    Johns. 

500;    Olmstead  v.  Elder,  5  N.   Y.  (X.  Y.)  345  (1810) ;  Russell  v.  Rich- 

144,  147  (1851) ;   Powell  v.  Tuttle,  ards,  11  Me.  (2  Fairf.)  371  (1834)  ; 

3  N.  Y.  396  (1850).  s.  c.  25  Am.  Dec.  254  :  Warren  v.' 

•  6  Johns.  Ch.  (N.  Y.)  323  (1822).  Leland,  9  Mass.  265  (1812) ;  Strong 

»  3  N.  Y.  396  (1850).  v.  Catton,  1  Wis.  471  (1853);  Rich"^ 

'  Richards  v.  Holmes,  59  U.   S.  ards  v.  Holmes,  59  U.  S.  (18  How.) 

(18  How.)  143  (1855) ;  bk.  16  L.  ed.  143  (1855) ;  bk.  16  L.  ed.  320. 

320.      The    Maryland  courts   have  *  Tinkom  v.  Purdy,  5  Johns.  (N. 

gone  so  far  as  to  confirm  a  sale  ad-  Y.)  345  (1810) ;  Astor  v.  Romayne, 

joumed  to  a  place  different  from  1  Johns.    Ch.   (N.  Y.)  310  (1814) ; 

that  named  in  the  decree.     Farmers'  McGown  v.  Sandford,  9  Paige  f.'h. 


628  ADVEKTISLNG    ADJOURNilEXT    OF    SALE.        [§518. 

mere  agent  of  the  plaintiff,  but  an  officer  of  the  court, 
having  a  legal  duty  to  perform  and  a  quasi-judicial  discretion 
to  exercise.  In  case  he  acts  unreasonably,  the  sale  may  be 
set  aside  and  a  resale  ordered.* 

It  was  held  by  the  supreme  court  of  the  United  States 
in  Blossom  v.  Milwaukee  and  Chicago  Railroad  Company,' 
where  the  decree  was  to  the  effect  that  the  premises  should 
be  sold  at  a  certain  time,  unless  the  mortgagor  should  pre- 
viously pay  the  mortgage  debt,  that  a  few  brief  adjournments 
for  the  purpose  of  enabling  the  mortgagor  to  make  arrange- 
ments to  pay  the  amount  due  on  the  mortgage,  were  allowed 
for  a  sufficient  cause,  although  made  at  the  request  of  the 
plaintiff's  solicitor. 

§  518.  Publishing  notice  of  adjournment — Adjourning 
sale  under  statutory  foreclosure. — In  case  a  sale  is  post- 
poned or  adjourned,  the  statute  requires  that  a  notice  of 
such  postponement  must  be  published  in  the  paper  or  papers 
wherein  the  notice  of  sale  was  published.*  The  day  to 
which  the  sale  is  adjourned  should  be  announced  at  the 
time  of  the  adjournment  ;*  but  if  this  can  not  be  done  on 
account  of  an  injunction,  or  for  other  reasons,  a  general 
adjournment  may  be  made  and  the  day  to  which  the  sale  is 
adjourned  subsequently  advertised.*  But  where  the  defen- 
dant has  procured  a  stay  of  proceedings  which  is  vacated 
on  the  day  of  the  sale,  because  such  stay  was  improperly 
granted,  the  sale  will  not  be  set  aside  and  a  resale  ordered, 
simply  because  the  party  procuring  tlie  stay  had  made  no 
preparation  to  attend  the  sale.* 


(N.  Y.)  290  (1841) ;  Ward  v.  James,  «  N.  Y.  Code  Civ.  Proc.  §  1678. 

8  Hun  (N.  Y.)  526  (1876) ;  Russell  See  also  LaFarge  v.  VanWageneu, 

V.  Richards,  11  Me.  (2  Fairf.)  371  14  How.  (N.  Y.)  Pr.  54  (1857). 

(1834);    8.   c.   26  Am.    Dec.    532;  « LaFarge    v.    VanWagenen,    14 

Richards  v.  Holmes,  59  U.   S.  (18  How.  (N.  Y.)  Pr.  54  (1857). 

How.)  143,  147(1855);  bk.  16 L.ed.  'LaFarge    v.    VanWagenen,    14 

820.  How.  (N.  Y.)  Pr.  54  (1857). 

'  Breese  v.  Bushby,  13  How.  fN".  •  Peck  v.  New  Jersey  &  N.  Y.  R 

Y.)  Pr.  485,  4.89  (1855).  Co.,  22  Hun  (N.  Y.)  129  (1880). 

«  70  U.  S.   (3  Wall.)  196  (1865) ; 
bk.  18  L.  ed.  43. 


§  519.]     ADviri^TisrNrG  adjoueishvient  of  sale.  C29 

The  proceedings  in  the  statutory  foreclosure  of  a  mort- 
gage will  not  be  void  because  the  day  of  sale  specified  in 
the  advertisement  happens  to  be  on  Sunday.  The  mort- 
gagee or  the  officer  having  charge  of  the  sale  may  postpone 
it  before  the  advertised  day  of  such  sale  to  a  subsequent 
day  without  affecting  the  regularity  thereof.'  And  where 
the  day,  not  a  legal  holiday,  fixed  for  the  sale  of  the  mort- 
gaged premises,  is  afterwards  appointed  to  be  a  legal  holiday, 
the  referee,  or  other  officer  making  the  sale,  may  adjourn  the 
sale  to  another  day.* 

Where,  upon  a  statutory  foreclosure,  the  mortgagee 
attends  upon  the  day  of  sale  mentioned  in  the  advertisement 
and  the  sale  is  adjourned  to  another  day,  it  must  be  made 
on  the  day  to  which  it  is  adjourned  ;  and  if  there  is  a 
variance  between  the  day  announced  at  the  adjournment 
and  the  day  published  in  the  newspapers,  the  sale  will  be 
irregular.'  It  is  questionable  whether  a  sale  can  be  post- 
poned before  the  day  upon  which  it  is  advertised  to  occur.* 
And  it  has  been  held  that  where  a  notice  of  postponement 
of  sale  has  been  given  prior  to  the  day  on  which  it  is  adver- 
tised to  occur,  and  the  sale  is  afterwards  made  on  the  day 
originally  advertised,  such  sale  will  be  irregular  and  void.' 

§  519.  Holding  sale  open.— A  defendant  to  a  foreclosure 
bid  off  the  premises  at  the  sale  and  asked  for  time  to  produce 
the  money,  and  two  days'  time  was  given  him  for  that  pur- 
pose.    The  sale  was  held  open  for  that  length  of  time,  and 


'  Saylos  V.  Smith,   12  Wend.  (N.  the  owner  of  the  equity  of  redemp- 

Y.)  57  (1834) ;  s.  c.  27  Am.  Dec.  117  ;  tion,  see  Neptune  Ins.  Co.  v.  Dorsey, 

Westgate  v.  Handlin,  7  How.  (N.  3  Md.  Ch.  334  (1850). 

Y.)  Pr.   372  (1853).     See  Bunce  v.  *  See  Jackson  v.  Clark,  7  Johns. 

Eced,16Barb.(N.Y.)347,349(1853\  (N.    Y.)  217  (1810);    Frederick   v. 

5  White  V.  Zust,  28  N.  J.  Eq.  (1  Wheelock,  3  T.  &  0.  (N.  Y.)  210 

Stew.)  107  (1877).  (1874). 

3  Miller  v.  Hull,  4  Den.  (N.  Y.)  « See  Jackson  v.  Clark,  7  Johns. 

104  (1847);    LaFarge  v.   Van  Wag-  (N.    Y.)  217  (1810);   Frederick   v. 

cnen.   14  How.  (N.  Y.)  Pr.  54,  58  Wheelock,  3  T.  &.  C.  (N.  Y.)  210 

(1857) ;  Lantz  v.  Worthington,  4  Pa.  (1874).     See  Miller  v.  Hull,  4  Den. 

St.  153  (1846).     As  to  commissions  (N.  Y.)  104  (1847) ;  LaFarge  v.  Van 

and  expenses,  in  the  case  of  an  ad-  Wagenen,  14  How.  (N.  Y.)  Pr.  64 

journmeut  made  at  the  request  of  (1857). 


630  HOLDING  SALE  OPEN.  [§  520. 

a  public  announcement  thereof  was  made  at  the  time.  The 
party  failed  to  make  good  his  bid,  and  a  new  sale  was  there- 
upon made  at  the  time  to  which  it  was  held  open  ;  such  sale 
was  held  to  be  regular  and  could  not  be  set  aside  as  a  matter 
of  right  at  the  instance  of  the  defendant  who  first  bid  off 
the  premises,  where  he  had  no  equities  entitling  him  to  a 
resale.' 

It  has  been  held,  where  property  on  a  foreclosure  is  struck 
off  to  a  purchaser  who  offers  to  pay  in  good  bank  bills,  but 
specie  is  demanded,  that  it  is  the  duty  of  the  officer 
making  the  sale  to  hold  it  open  a  sufficient  length  of  time 
to  enable  such  purchaser  to  obtain  specie  instead  of  bank 
bills.' 

§  520.  Who  may  purchase  on  a  foreclosure  sale.— The 
Code  of  Civil  Procedure'  provides  that  a  referee  or  other 
officer  conducting  the  sale  in  a  mortgage  foreclosure,  or  a 
guardian  of  an  infant  party  to  the  action  shall  not,  nor  shall 
any  person  for  his  benefit,  directly  or  indirectly,  purchase, 
or  be  interested  in  the  purchase  of,  any  of  the  property 
sold,  except  that  a  guardian  may,  when  he  is  lawfully 
authorized  so  to  do,  purchase  for  the  benefit  of  his  ward.* 

Under  the  provisions  of  the  rules  of  practice,'  the  decree  of 
foreclosure  and  sale  must  contain  a  clause  providing  that  the 
plaintiff  or  any  other  party  to  the  suit  may  become  the  pur- 
chaser of  the  premises  on  such  sale ;  this  rule,  however,  will 
not  permit  one  defendant  to  bid  in  premises  belonging  to 
another  and  to  hold  them  against  the  latter  contrary 
to  equity.* 

A  person  other  than  the  debtor,  who  has  become  the 
owner  of  the  land  which  is  subject  to  the  lien  of  the  mort- 
gage, may  become  the  purchaser  at  a  foreclosure  sale,  and 
as  such  purchaser  acquire  a  valid  title ;'  but  one  who,  as 


'  Isbell  V.    Kenyon,   33  Mich.  63  *  N.  Y.  Supreme  Court  Rule  61. 

(1875).  •  Bennett  v.  Austin,  81  N.  Y.  308 

«  Baring   v.   Moore,  5   Paige  Ch.  (1880). 
(N.  Y.)  48  (1835).  ''  Chautauqua  Bank  v.  Risley,  19 

»  N.  Y.  Code  Civ.  Proc.  §  1679.  N.  Y.  369  (lb59) ;  s.  c.  75  Am.  Dec. 

*  Lefevre   v.   Laraway,  22    Barb.  347. 
(N.  Y.j  167  (1856). 


§521.]  WHO    MAY    PURCHASE   AT   SALE.  631 

trustee,  holds  the  legal  title  to  the  lands,  subject  to  a  mort- 
gage, can  not  individually  acquire  an  interest  therein  by 
taking  an  assignment  of  the  bid  of  the  purchaser  on  a  fore- 
closure sale  under  such  mortgage  and  by  taking  a  deed  from 
the  referee,  because  a  trustee  can  not  gain  an  advantage  to 
himself  to  the  detriment  of  those  for  whom  he  is  trustee.' 
Until  the  sale  to  the  original  purchaser  is  consummated  by 
payment  and  delivery  of  the  deed,  the  disability  of  the 
trustee  to  take  title,  individually,  is  absolute." 

A  tenant  in  common  with  the  plaintiff,  having  no  duties 
towards  him  other  than  such  as  necessarily  arise  from  the 
co-tenancy,  is  not  prevented  from  purchasing  the  premises  for 
his  own  benefit  at  a  foreclosure  sale.'  Any  of  the  defen- 
dants may  purchase  the  mortgaged  property  of  a  co-defen- 
dant ;*  the  plaintiff's  attorney  may  become  a  purchaser  at 
such  sale,  and  when  he  bids  off  the  property  in  his  own 
name,  and  takes  the  certificate  from  the  referee  in  his 
own  name,  the  presumption  will  be  that  the  purchase  was  on 
his  own  account.* 

§  521.  Purchase  by  mortgagee. — By  the  general  rules 
of  practice  in  New  York,"  it  is  required  that  a  provision  shall 
be  inserted  in  every  decree  of  foreclosure  and  sale  of  mort- 
gaged property,  allowing  the  plaintiff  or  any  other  party  to 


>  Toole  V.  McKiernan,  48  N.  Y.  v.    Boylan,    25    Wis.    679    (1870) ; 

Supr.  Ct.  (16  J.  &  S.)  163  (1882);  Piatt  v.  Oliver,  2  McL.  C.  C.  313 

TenEyck  v.  Craig,  62  N.  Y.  406,  420  (1840). 

(1875) ;  Willcox  v.  Smith,  26  Barb.  »  T^Qig  ^    McKiernan,  48  N.  Y. 

(N.  Y.)  352  (1858) ;  New  York  Cent.  Supr.  Ct.  (16  J.  &  S.)  163  (1882). 

Ins.  V.  National  Protection  Ins.  Co.,  *  Streeter  v.  Shultz,  45  Hun  (N. 

20  Barb.   470    (1854);    Conger    v.  Y. )    406    (1887),    explaining    Van 

Ring,  11  Barb.  (N.  Y.)  364  (1851);  Home  v.  Fonda,  5  Johns.  Ch.  (N. 

Chapin  v.  Weed,  Clarke  Ch,  (N.  Y.)  Y.)  388,  407  (1821). 

464  (1841) ;   Fellows  v.   Fellows,   4  *  Neilson  v.  Neilson,  5  Barb.  (N. 

Cow.  (N.  Y.)  698  (1825) ;  Matthew-  Y.)  565  (1849). 

son  V.  Johnson,  Hoff.  Ch.  (N.  Y.)  »  Chappell  v.  Dann,  21  Barb.  (N. 

564    (1840);      Rogers    v.    Rogers,  Y.)  17  (1855)     But  see  Gardiner  v 

Hopk.  Ch.  (N.  Y.)  525  (1825) ;  Van  Ogden,  22  N.  Y.  327  (1860) ;  s.  c. 

Home  V.  Fonda,  5  Johns.  Ch.  (N.  78  Am.  Dec.  192 ;  Squier  v.  Norris, 

Y.)  407  (1821) ;   Levy  v.  Brush,  1  1  Lans.  (N.  Y.)  282  (1869). 

Sweeney  (N.  Y.)  663  (1869) ;  Wright  «  N.  Y.  Supreme  Court  Rule  61. 
V.  Ross.  36  Cal.  432  (1868) ;  Phelan 


632  PURCHASE    BY    MOKTGAGEE.  [§  521. 

become  a  purchaser  at  such  sale ;  and  the  plaintiff  may  also 
buy  in  any  outstanding  title  and  hold  it  against  the  mortgagor.' 
This  privilege  is  frequently  necessary,  in  order  to  prevent  a 
sacrifice  of  the  mortgagee's  interests.*  Where,  by  statutory 
provision,  or  by  the  permission  of  the  court,  the  mortgaged 
premises  are  purchased  by  the  mortgagee  or  his  assignee 
under  a  decree  of  foreclosure,  such  purchase  does  not  extin- 
guish the  mortgage  debt  nor  any  balance  that  may  remain 
unpaid.* 

In  those  cases  where,  on  the  sale  of  mortgaged  premises, 
the  mortgagee  becomes  the  purchaser,  he  is  presumed  to 
take  the  title  with  notice  of  the  defects,  if  any,  in  the  fore- 
closure proceedings.*  And  the  mortgagee  who  becomes  a 
purchaser  under  a  decree  of  foreclosure  will  not  be  allowed 
to  object  to  the  title,  on  the  ground  that  persons  in  posses- 
sion of  the  property  without  title  were  not  made  parties  to 
the  action.' 

In  Alabama,  where  it  is  intended  to  give  the  owner  of  a 
reversionary  or  other  interest  in  the  land,  who  is  a  party  to 
the  record,  the  right  to  become  a  bidder  at  the  sale  of  such 
real  estate,  a  provision  to  that  effect  must  be  inserted  in  the 
decree  of  foreclosure  and  sale.  Where  a  purchaser  of  real 
estate  executes  to  his  vendor  a  purchase  money  mortgage, 
and  afterwards  sells  the  land  to  a  third  person  who  assumes 
and  agrees  to  pay  the  balance  due  to  the  vendor  on  the  pur- 
chase money  mortgage,  and  agrees  further  that  the  land  shall 
remain  bound  by  the  mortgage,  such  purchaser  will  not  be 
within  the  rule  prohibiting  a  mortgagee  from  purchasing  at 
his  own  sale.* 

Where  a  rule  prevails  against  a  purchase  by  the  mort- 
gagee at  his  own  sale,  if  the  mortgagee,  through  an  agent. 


•  TenEyck  v.  Craig,  62  N.  T.  406,  «  Edwards  v.  Sanders,  6  S.  C.  316 

421  (1875)  ;  Williams  v.  Townsend,  (1875). 

31  N.  Y.  415  (1865) ;    Cameron  v.  "  Boyd  v.  Ellis,  11  Iowa,  97,  102 

Irwin,   5  HUl  (N.   Y.)  280  (1843)  ;  (1860) ;    Corriell  v.   Doolittle,  2   G. 

Shaw  V.   Bunny,  2  DeG.,  J.  &  S.  Greene  (Iowa),  385,  389(1849). 

468  (1864) ;  s.  c.  13  W.  R.  374.  '  Ostrom  v.  McCann,  21  How.  (N. 

«  Holcomb  V.  Holcomb,  11  N.  J.  Y.)  Pr.  431,  433  (1860). 
Eq.  (3  Stockt.)  281  (1857). 


§§  522-523.]  AEEMOEAia)UM   OF   SALE.  633 

becomes  the  purchaser  at  the  sale  under  the  mortgage,  the 
mortgagor  may  avoid  such  sale,  although  no  other  person 
can.' 

§  522.  Memorandum  of  sale. — It  is  not  essential  to  the 
validity  of  a  sale  of  premises  on  mortgage  foreclosure,  that 
the  purchaser  sign  a  memorandum  of  sale.*  If  the  officer 
making  the  sale  signs  the  memorandum,  it  will  be  sufficient 
to  make  the  sale  valid  under  the  statute  of  frauds.*  Should 
the  purchaser  sign  the  memorandum  of  sale,  by  which  he 
agrees  to  comply  with  the  conditions  thereof,  such  memoran- 
dum does  not  constitute  a  contract,  either  with  the  officer 
making  the  sale  or  with  the  plaintiff  in  the  foreclosure,  and 
no  action  can  be  maintained  upon  it.*  The  purchaser  by 
signing  the  memorandum  of  sale  simply  subjects  himself  to 
the  jurisdiction  and  control  of  the  court  for  the  purpose  of 
enforcing  the  specific  performance  of  the  purchase  according 
to  the  terms  thereof,  or  of  making  him  answer  in  damages 
for  non-compliance  therewith.* 

§  523.  Report  of  officer  making  sale.  —  The  general 
requirement  that  a  judicial  sale  of  real  estate  shall  be  reported 
to  the  court  on  the  oath  of  the  person  making  the  same,  and 
confirmed  by  the  court  before  a  conveyance  is  executed, 
does  not  apply  to  mortgage  foreclosures.*  The  referee  or 
officer  who  makes  the  sale  in  a  mortgage  foreclosure  acts 
simply  as  the  agent  of  the  court ;  and  after  he  has  disposed 


•  McNeiU  V.  McNeill,  36  Ala.  109  *  Miller  v.  Collyer,  36  Barb.  (N. 
^860)  ;  8.  c.  76  Am.  Dec.  320.  T.)  250  (1862) ;  Willets  v.  VanAlst. 

» Edmondson  v.  Welsh,  27  Ala.  26    How.    ( N.  T. )    Pr.    825,    346 

578(1855).  (1863,. 

«  Bicknell  v.  Byrnes,  23  How.  (N.  «  Miller  v.  Collyer,  36  Barb.  (N. 

Y.)  Pr.  486  (1862).    See  Wadsworth  Y.)  250  (1862) ;  WiUets  v.  VanAlst, 

v.  Lyon,  93  N.  Y.  201,  219  (1883) ;  26  How.  (N.  Y.)  Pr.  325  (1863).    In 

45  Am.  Rep.  109  ;  Miller  v.  Collyer,  re  D&vis,  7  Daly  (N.  Y.)  1,  8  (1877) ; 

36  Barb.  (N.  Y.)  250  (1862) ;  WiUeta  Miller  v.  Burke,  6  Daly  (N.  Y.)  171, 

V.  VanAlst,  26  How.  (N.  Y.)  Pr.  179  (1875) ;    Graham  v.  Bleakie,  2 

325  (1863) ;  National  Fire  Ins.  Co.  Daly  (N.  Y.)  55  (1866). 

V.  Loomis,  11  Paige  Ch.  (N.  Y.)  431  *  Agricultural  Ins.  Co.  v.  Barnard. 

(1847).  96  N.  Y.  525  (1884). 

•  Bicknell  v.  Byrnes,  23  How.  (N. 
Y.)  Pr.  486  (1863). 


Giii  EEPOKT    OF    REFEREE    SELLING.  [§524. 

of  the  mortgaged  premises  and  distributed  the  proceeds 
thereof  according  to  the  directions  of  the  judgment,  he  must 
make  a  report  of  the  sale  and  his  proceedings  to  the 
court. 

The  report  should  be  prepared  and  filed  by  the  officer  mak- 
ing the  sale  as  soon  as  practicable  after  the  disposition  of 
the  proceeds  of  the  sale,  as  directed  by  the  judgment. 
The  report  of  the  referee  may  be  excepted  to.  An  error  in 
reciting  the  date  of  a  decree  of  foreclosure  in  such  report  of 
sale  is  immaterial,  where  the  record  furnishes  the  means 
of  correcting  it.'  To  sustain  a  report  of  sale  as  against 
exceptions  filed  to  it,  affidavits  showing  that  the  terms  of 
sale  were  different  from  those  reported,  are  inadmissible.* 

§  524.  What  referee's  report  should  show.  —  The 
referee's  report  should  be  a  complete  history  of  his  pro- 
ceedings, and  should  show  that  every  direction  given  in 
the  judgment  has  been  fully  executed.  It  should  contain  a 
statement  of  his  fees  and  of  the  necessary  expenses  con- 
nected with  the  sale,  and  should  be  accompanied  b)- 
proper  receipts  or  vouchers  for  all  payments  and  disburse- 
ments. All  receipts  and  vouchers  should  be  attached  to  the 
report  and  filed  with  the  clerk,  and  a  note  of  the  day  of 
filing  the  report  should  be  entered  by  the  clerk  in  the  proper 
book  under  the  title  of  the  cause.  The  report  will  become 
absolute  and  stand  in  all  things  confirmed,  unless  exceptions 
thereto  are  filed  and  served  within  eight  days  after  service 
of  notice  of  filing  the  same.* 

Where  the  judgment  directs  the  officer  making  the  sale  to 
report  any  deficiency  that  may  arise,  and  the  proceeds  of 
the  sale  are  not  sufficient  to  satisfy  the  mortgage,  with  the 
costs  and  expenses,  his  report  should  set  forth  that  fact  and 
specify  the  amount  of  such  deficiency. 

Where  there  is  a  surplus,  a  report  of  the  sale  can  not 
be  filed  or  confirmed  unless  accompanied  by  a  proper 
voucher  for  the  surplus  moneys,  showing  that  they  have 


'  Ruggles  V.  First  Nat.  Bank  of  Centreville,  43  Mich.  193(1880) 
«  Koch  V.  Purcell,  45  N.  Y.  Supr.  Cl.  (13  J.  &  S.)  102  {IH'.O). 
*  N.  Y.  Supreme  Court  Rule  30. 


§  525.]  CONFIRMTNG   EEPORT   OF   SALE.  035 

been  paid  to  the  proper  parties  or  deposited  pursuant  to  the 
directions  of  the  judgment.* 

§  525.  Confirmation  of  referee's  report. — In  some  states 
no  title  passes  to  the  purchaser  until  the  sale  is  confirmed  by 
the  court.*  It  seems,  however,  that  where  a  deed  has  been 
executed  and  delivered  without  a  confirmation  of  the  sale  by 
the  court,  long  continued  possession  under  it  will  render  the 
title  valid.* 

When  the  report  of  the  referee,  or  other  oflEicer  making 
the  sale,  is  filed,  any  party  to  the  action  may  enter  an  order, 
of  course,  confirming  the  same,  unless  cause  against  the 
same  is  shown  within  eight  days ;  if  no  exceptions  are  filed 
and  served  within  that  time,  the  report  of  sale  will  become 
absolute,  without  notice  or  further  order.*  An  order  of 
confirmation  is  appealable.*  Until  the  report  of  the  sale 
is  confirmed,  any  person  aggrieved  may  make  a  summary 
application  to  the  court  for  a  resale,  provided  he  has  just 
grounds  to  sustain  such  application.* 

Under  the  New  York  practice,  it  seems  that  it  is  not 
necessary  for  the  plaintiff  to  give  notice  to  any  party  of  the 
filing  of  the  report  of  the  officer  making  the  sale ;  neither  is 
it  necessary  for  him  to  obtain  an  order  confirming  the  report, 
preliminary  to  the  issuing  of  an  execution  to  collect  any 
deficiency  specified  in  the  report,  and  which  is  provided  for 
in  the  decree  of  foreclosure  and  sale  ;^  yet  it  certainly  is  the 
safer  practice  to  give  notice  of  the  filing  of  the  report,  and 
after  waiting  eight  days  for  the  filing  of  exceptions  thereto, 


•  New  Tork  Supreme  Court  Rule  *  Tarrans  v.  Hicks,  32  Mich.  307 

61.  (1875).     See  N.  Y.  Supreme  Court 

>  Mills  V.   Ralston,  10  Kan.   206  Rule  30. 

(1872);  Young  V.  Keogh,  11  lU.  642  »  Koehler   v.   Ball,    2    Kan.    160 

(1850);   Busey    v.    Hardin,    2   B.  (1863) ;  Detroit  Fire  «&  Marine  Ins. 

Mon.   (Ky.)   407   (1842) ;    Allen   v.  Co.  v.  Renz,  33  Mich.  298  (1876). 

Poole,  54  Miss.  323  (1877);  Gowan  'Brown  v.   Frost,  10  Paige  Ch. 

V.  Jones,  18  Miss.  (10  Smed.  &  M.)  (N.  Y.)  243  (1843).     See  Strong  v. 

164  (1848) ;  Hays'  Appeal,  51  Pa.  St.  Dollner,  2  Sandf .  (N.  Y.)  444,  448 

58  (1865).  (1849). 

3  Gowan  v.   Jones,   18  Miss.   (10  '  Moore  v.  Shaw,  15  Hun  (N.  Y.) 

Smed.  &  M.)  164  (1848).     See  post  428   (1878);    aff'd   77    N.  Y,    512 

chap,  xxvii.  (1879). 


636  CONFIRMING    REPORT    OF    SALE.  [§526. 

to  move  the  court  upon  the  usual  notice  at  a  special  term 
for  an  order  confirming  the  report.' 

In  some  states,  however,  confirmation  of  a  sale  can 
be  regularly  made  only  after  due  notice  of  motion  to 
the  parties  adversely  interested,  that  they  may  show  cause 
against  it.'  It  is  said  in  Williamson  v.  Berry,*  that  "  notice 
of  the  motion  is  given  to  the  solicitors  in  the  cause,  and 
confirmation  7tist  is  ordered  by  the  court  —  to  become 
absolute  in  a  time  stated — unless  cause  is  shown  against  it. 
Then,  unless  the  purchaser  calls  for  an  investigation  by  the 
master,  it  is  the  master's  privilege  and  duty  to  draw  the  deed 
for  the  purchaser,  reciting  in  it  the  decree  for  the  sale,  his 
approval  of  it,  and  the  confirmation  by  the  court  of  the  sale 
in  the  manner  that  such  confirmation  has  been  ordered." 
The  supreme  court  of  the  United  States  say  in  the  case  last 
quoted,  that  "  before  a  purchaser  can  get  a  title,  he  must 
get  a  report  from  the  master  that  he  approves  the  sale,  or 
that  he  was  the  best  bidder,  accordingly  as  the  sale  may 
have  been  made,  either  privately  or  at  auction."* 

But  in  the  more  recent  case  of  Blossom  v.  Milwaukee  and 
Chicago  Railroad  Company,"  the  same  court  held  that  a 
bidder  at  a  public  auction,  whose  bid  has  not  been  accepted, 
— the  sale  being  adjourned  for  a  sufficient  cause,  and  finally 
discontinued — can  not  insist  on  leave  to  pay  the  amount  of 
his  bid,  and  on  an  order  confirming  the  sale  to  him,  even 
though  his  bid  was  the  highest  and  best  bid,  and  covered 
the  full  amount  of  the  decree,  together  with  the  costs  of 
such  sale. 

The  question  of  usury  can  not  be  raised  on  a  motion  for 
confirmation.' 

§  526-  Referee's  report  should  state  amount  of  defi- 
ciency.— It  seems  that  where  a  judgment  in  an  action  to 


»  Moore  v.  Shaw,  15  Hun  (N.  Y.)  (8  How.)  495,  496  (1850) ;  bk.  12  L. 

428(1878).     See  joos<  chap,  xxvii.  ed.  1170. 

«  Branch  Bank  of  Mobile  v.  Hunt,  *  70  U.   S.  (3  Wall.)  19C  (1865) ; 

8  Ala.  876  (1845).  bk.  18  L.  ed.  43. 

«  49  U.  S.  (8  How.)  495,  546  (1850);  «  Smith   v.    Myers,  41    Md.   425, 

bk.  12  L.  ed.  1170.  434  (1874). 

*  Williamson  v.   Berry,  49  U.  S. 


§  527.]  STATDsra  defioienoy.  637 

foreclose  a  mortgage  provides,  "  that  if  the  proceeds  of  the 
sale  be  insufficient  to  pay  the  amount  so  reported  to  be  due 
to  the  plaintiff,  that  said  referee  specify  the  amount  of  such 
deficiency  in  his  report  of  the  sale,  and  that  the  defendant 
pay  the  same  to  the  plaintiff,"  it  is  not  necessary  to  apply 
to  the  court  for  an  order  confirming  the  report  of  the  referee 
before  issuing  execution  against  the  defendant  for  the 
amount  of  the  deficiency ;  nor  does  it  appear  to  be  necessary 
to  enter  any  further  judgment  upon  the  filing  of  said  report.* 
But  the  better  practice  appears  to  be  to  have  the  report  of 
the  referee  confirmed  and  to  enter  judgment  for  the 
deficiency.' 

It  was  formerly  the  practice  in  New  York  to  have  the 
report  of  the  referee  or  other  officer  making  the  sale  con- 
firmed before  issuing  an  execution  for  any  deficiency ;  but 
that  practice  was  the  result  of  a  rule  of  chancery  and  is  not 
provided  for  by  the  present  Code.*  A  failure  under  the 
present  practice  to  procure  a  confirmation  before  issuing 
execution  for  a  deficiency,  is  a  mere  irregularity  at  most,  and 
being  purely  a  question  of  practice,  the  decision  of  the  court 
below  will  be  final.* 

§  527.  Substituted  or  supplemental  report  of  referee — 
Notice  to  defendant. — After  the  report  of  the  referee  or 
other  officer  making  the  sale  has  been  duly  confirmed,  leave 
to  file  a  substituted  report  of  the  sale,  the  original  report 
having  been  lost,  and  to  enter  a  personal  judgment  for  any 
deficiency  not  realized  by  the  sale,  should  not  be  allowed, 
except  upon  notice  to  the  defendant  or  some  one  entitled  to 
represent  him.* 


»  Moore  v.  Shaw,  15  Hun  (N.  T.)  Y.)  428  (1878) ;  afE'd  77  N.  Y.  513 

428  (1878) ;  afE'd  77  N.  Y.  512  (1879).  (1879). 

See  N.  Y.  Code  Civ.  Proc.  §  1627.  *  N.  Y.  Code  Civ.  Proc.  §  721, 

*  Springsteene  v.  Gillett,  30  Hun  sub.  12 ;  Moore  v,  Shaw,  77  N.  Y. 

(N.  Y.)  260  (1883) ;  Moore  v.  Shaw,  512  (1879),  aff'g  15  Hun  (N.  Y.)  428. 

77  N.  Y.  512  (1879),  afi'g  15  Hun  »  Chicago  &  G.  W.  R.  L.  Co.  v. 

(N.  Y.)  428  (1878).  Peck,  112  111.  408  (1885). 

»  See  Moore  v.  Shaw,  15  H;m  (N. 


CHAPTER    XXVI. 


SETTING  SALE  ASIDE  AND   RESALE. 

GENERAL    PRINCIPLES  —  WHO    MAY    APPLY    FOR  — GROUNDS    FOR  — 
EFFECT  OF— TERMS  IMPOSED-RESALE. 


528.  General   principles  —  When 

sale  will  not  be  set  aside. 

529.  Discretion  of  court. 

530.  Who  may  have  sale  set  aside. 

531.  How  sale  may  be  set  aside. 
533.  Time  of  making  application 

for  resale. 

When  application  for  resale 
will  be  granted — When  de- 
nied. 

When  sale  may  be  set  aside 
where  plaintiff  is  purchaser. 

What  advance  must  be  bid 
on  resale. 

What  sufficient  grounds  for 
setting  sale  aside. 

537.  Irregularity  in  conduct  of  sale. 

538.  Not  set  aside  because  of  few 

bidders. 
Inadequacy  of  price. 
Motion  to  set  sale  aside  for 

inadequacy  of  price. 


533. 


534. 


535. 


536. 


539 

540, 


S  541. 

543. 
543. 
544. 


545. 

546. 
547. 

548. 
549. 


Accident  and  surprise  grounds 

for  setting  sale  aside. 
Fraud  and  misconduct. 
False  statements  generally. 
Misleading    statements    and 

representations  by    referee 

or  plaintiff. 
Negligence  in  objecting,  and 

acquiescence  in  sale. 
Objections  waived  by  delay. 
Excusable       mistakes        as 

grounds    for    setting    sale 

aside. 
Terms  imposed. 
Effect    upon     purchaser    of 

order  setting  sale  aside. 
Setting  sale  aside  for  benefit 

of  infants. 


550 
551, 
552.  Proceedings  on  resale. 


Appeal  from  order  on  appli- 
cation for  resale. 


§  528.  General  principles — When  sale  will  not  be  set 
aside. — A  sale  made  in  a  mortgage  foreclosure  will  not,  as  a 
rule,  be  disturbed  where  it  was  fairly  made  and  is  free  from 
fraud,  and  there  is  an  absence  of  all  circumstances  which  would 
justify  setting  it  aside.*  Some  good  reason  must  always  be 
shown  to  justify  an  interference  with  the  sale.  If  there  is  no 
legal  right  to  relief,''  as  a  matter  of  course,  the  application 


»  McCotter  v.  Jay,  30  N.  Y.  80 
(1864);  Lefevre  v.  Laraway,  22  Barb. 
(N.  Y.)  167  (1856);  Gardiner  v. 
Schermerhorn,  Clarke  Ch.  (N.  Y.) 
101  (1839) ;  Whitbeck  v.  Rowe,  25 
How.  (N.  Y.)  Pr.  403  (1862)  ;  White 


V.  Coulter.  1  Hun  (N.  Y.)  857,  364 
(1874) ;  American  Ins.  Co.  v.  Oakley, 
9  Paige  Ch.  (N.  Y.)  496  (1842) ;  s.  c. 
38  Am.  Dec,  561  ;  Duncan  v.  Dodd, 
2  Paige  Ch.  (N.  Y.)  99  (1830). 
*  It  is  said  in  McCotter  v.  Jay,  30 


638 


§  528.]  WHEN    SALE   NOT    SET   ASIDE.  639 

will  be  addressed  to  the  sound  discretion  of  the  court, 
and  the  court  must  consider  the  equities  of  all  parties  inter- 
ested, in  order  that  substantial  justice  may  be  done.* 

It  has  been  said  that  a  foreclosure  sale  should  not  be  set 
aside  merely  because  some  irregularity  was  committed  in  its 
conduct,  such  as  selling  a  homestead  together  with  other 
mortgaged  premises  without  inquiring  whether  the  home- 
stead could  be  sold  separately,  unless  it  is  clearly  shown 
that  some  injury  was  sustained  because  of  such  irregularity.' 

Where  a  foreclosure  sale  is  regular,  it  will  not  be  set 
aside  because  the  newspaper  in  which  the  notice  of  the  sale 
was  published,  was  one  of  limited  circulation  and  not  calcu- 
lated to  give  that  general  information  which  should  be 
afforded  in  such  cases  f  and  the  facts  that  a  party  to  the  suit, 
who  is  entitled  to  the  surplus  money  arising  on  a  sale  of 
the  mortgaged  premises,  is  so  far  deprived  of  his  eye-sight 
as  not  to  be  able  to  read  a  newspaper,  and  that  he  did  not 
for  that  reason  see  the  advertisement  of  the  sale,  and  conse- 
quently did  not  attend  such  sale,  and  the  property  was  sold 
at  a  sacrifice,  do  not  constitute  a  sufficient  ground  for  setting 
the  sale  aside.* 

Where  the  plaintiff  in  an  action  for  foreclosure  was  described 
as  an  administrator,  and  as  such  prosecuted  the  action  to 
judgment,  after  proper  service  on  all  the  defendants,  it  was 
held  that  the  judgment  and  a  sale  under  it  could  not  be  assailed 
because  of  an  irregularity,  or  even  want  of  jurisdiction,  in 
granting  the  letters  of  administration  to  him.*  It  has  also 
been  held  that  a  sale  should  not  be  set  aside,  because  the 
officer  conducting  it  failed  to  make  his  report  thereof  at 
the  next  term  of  the  court  after  the  sale ;'   nor  because  the 


N.  T.  80  (1864),  that  where  fore-  (1872).     See  Warren  v.   Foreman, 

closure    proceedings    are    entirely  19  Wis.  35  (1865). 

regular  and  free  from  fraud,  they  *  Wake  v.  Hart,  12  How.  (N.  Y.) 

can  not  be  disturbed  or  set  aside  Pr.  444  (1855). 

without  some  legal  reason.  *  Parkhurst  v.  Cory,  11  N.  J.  Eq. 

1  Wiley  V.  Angel,  Clarke  Ch.  (N.  (3  Stockt.)  233  (1856). 

T.)  217  (1840).     See  Tripp  v.  Cook,  »  Abbott  v.  Curran,  98  N.  Y.  665 

26  Wend.  (N.  Y.)  143  (1841) ;  Cole  (1885). 

V.  Miller,  60  Ind.  463  (1878).  «  Walker  v.  Schum,   42  111.   463 

•Lloyd   V    Frank,  30  Wis.   306  (1867). 


640  DISCEETION   OF   COURT.  [§529. 

judgment  was  entered  for  too  large  an  amount,'  for,  on  an 
application  to  set  aside  a  sale  made  in  a  foreclosure,  the  court 
can  not  inquire  into  the  regularity  of  such  action,  nor  whether 
the  sum  for  which  judgment  was  entered  is  greater  or  less  than 
it  should  have  been." 

The  fact  that  the  original  mortgagee,  who  assigned  his 
mortgage  and  guaranteed  its  payment,  and  who  was  made  a 
party  to  the  foreclosure,  did  not  know  of  the  time  and  place  of 
the  sale,  will  not  be  a  good  ground  for  setting  it  aside, 
because  such  mortgagee  was  bound  to  use  due  diligence  in 
ascertaining  the  day  of  the  sale  in  order  to  protect  his  rights.* 

§  529.  Discretion  of  court. — The  supreme  court,  having 
control  over  its  own  judgments  and  all  proceedings  there- 
under, and  having  power  to  exercise  this  control  at  the 
instance  of  any  person  whose  rights  are  injuriously  affected 
by  such  proceedings,*  has  power  to  set  aside  and  vacate  a 
sale  of  land  made  under  a  judgment  upon  a  foreclosure  of 
a  mortgage  by  an  officer  thereof,  and  to  order  a  resale, 
although  there  may  be  no  fraud,  and  the  sale  was  regular  in 
all  respects.' 

An  application  for  a  resale  is  always  addressed  to  the 
sound  discretion  of  the  court  of-  original  jurisdiction,  and 
an  order  granting  or  denying  such  a  resale  is  not  appeal- 
able.' The  court  held  in  Wakeman  v.  Price,^  that  "  such 
relief,  where  the  proceedings  have  been  regular,  can  not  be 
claimed  as  a  matter  of  right,  but  simply  as  a  matter  of 
favor.     It   must,   therefore,    rest    in  the  discretion    of   the 


'  Young  V.  Bloomer,  22  How.  (N.  •  Goodell  v.  Harrington,  76  N".  T. 

Y.)Pr.  383(1861) ;  Bullard  v.  Green,  547  (1879) ;  Hale  v.  Clauson,  60  N. 

10  Mich.  268  (1862).  Y.  339,  341  (1875) ;  Crane  v.  Stiger, 

s  Bullard  v.  Green,  10  Mich.  268  58  N.  Y.  625  (1874) ;  Buffalo  Sav. 

(1862).  Bank  v.   Newton.   23    N.   Y.    160 

3  McCotterv.Jay,  30  N.Y.  80(1864).  (1861);  Wakeman   v.   Price,  3   N. 

*  Goodell  V.  Harrington,  76  N.  Y.  Y.  334  (1850) ;  Bergen  v.  Snedeker, 

647  (1879);    Kellogg  v.  Howell,  62  8  Abb.  (N.  Y.)]Sr.  C.  50  (1879);  Nu- 

Barb.  (N.  Y.)  280  (1872) ;  Gould  v.  gent  v.  Nugent,  54  Mich.  557  (1884) ; 

Mortimer,  26  How.  (N.  Y.)  Pr.  167  Adams  v.    Haskell,    10    Wis.    123 

(1863).  (1859). 

«  Hale  V.  Clauson,  60  N.  Y.  339,  '  3  N.  Y.  334,  335  (1850). 
841  (1875). 


§  530.]  DISCRETION    01    COURT.  641 

court  to  grant  or  refuse  it.  It  is  simply  a  question  of 
practice  in  the  lower  court — as  clearly  so  as  an  order  grant- 
ing or  denying  a  motion  to  open  a  default,  to  dissolve  an 
injunction,  or  to  allow  costs." 

Where  a  sale  is  reported  by  the  referee  and  the  purchaser 
refuses  to  comply  with  its  terms,  the  court  may,  upon 
an  application  by  the  plaintiff,  or  by  other  persons  inter- 
ested, order  that  cause  be  shown  why  the  terms  of  the 
sale  should  not  be  complied  with  ;  and  if  sufficient  cause  is 
not  shown,  the  court,  after  considering  all  the  circumstances 
of  the  sale,  may  either  ratify  or  set  it  aside,  as  justice  in  the 
case  may  seem  to  require.'  If  the  sale  is  ratified  and 
the  party  still  fails  to  comply  with  its  terms,  the  court  may 
proceed  summarily  to  direct  a  resale  of  the  property  at  the 
risk  of  the  first  purchaser.' 

But  the  first  sale  having  been  reported  by  the  referee,  or 
other  officer  making  it,  no  order  affecting  the  rights  of  the 
purchaser  should  be  granted  without  notifying  him  and 
affording  him  an  opportunity  of  opposing  the  motion  for  a 
resale.*  Parties  desiring  to  have  a  mortgage  foreclosure  sale 
set  aside  must  move  promptly  after  they  become  aware  of 
the  facts  of  which  they  complain.* 

§  530.  Who  may  have  sale  set  aside. — Every  person 
whose  rights  are  injuriously  affected  by  a  judgment  of  fore- 
closure or  by  a  proceeding  thereunder,  has  a  right  to  have  it 
set  aside  or  amended  on  motion,  even  though  he  is  not  a 
party  to  the  suit ;  and  hence,  he  may  apply  to  the  court  for 
a  resale  of  the  premises.*  To  be  entitled  to  apply  for  a 
resale,  the  party  need  not  have  a  specific  lien  upon  the 
land  ;•  it  will  be  sufficient  if  he  has  an  interest  or  right  in 


'  Schaefer  v.  O'Brien,  49  Md.  253  547  (1879) ;  Kellogg  v.  Howell,  63 

(1878).  Barb.  (K  Y.)  280  (1872) ;  Gould  v. 

«  Schaefer  v.  O'Brien,  49  Md.  253  Mortimer,  26  How,  (K  Y.)  Pr.  167 

(1878).  (1863) ;    8.  c.  16  Abb.  (N.  Y.)  Pr. 

»  Schaefer  v.  O'Brien,  49  Md.  253  448 ;  Fuller  v.  Brown,  85  Hun  (N. 

(1878).  Y.)  162  (1885). 

*  Lyon  V.  Brunson,  48  Mich.  194  «  Goodell  v.  Harrington,  76  N.  Y. 
(1882).  547  (.879). 

*  Goodell  V.  Harrington,  76  N.  Y. 


642  WHO   MAY    HAVE   SALE    SET   ASIDE.  [§530. 

the  property,  which  may  be  affected  by  the  sale.*  A  creditor 
of  the  mortgagor,  whose  debt  will  be  affected,'  a  judgment 
creditor  whose  lien  will  be  destroyed,*  a  subsequent  judg- 
ment creditor  whose  judgment  would  be  rendered  worthless, 
if  the  judgment  under  which  the  sale  was  made  is  fraudu- 
lent,* a  junior  incumbrancer  whose  right  of  action  accrues 
subsequently  to  the  commencement  of  the  foreclosure  under 
which  the  sale  is  made,  and  who  is  not  a  party  to  such  action,* 
or  a  party  who  is  primarily  liable  for  the  payment  of  the 
mortgage  debt  or  of  any  deficiency,  who  is  not  made  a  party 
to  the  suit,  may  move  to  have  the  sale  set  aside,  if  it  did  not 
produce  enough  to  satisfy  his  claim  or  to  relieve  him  from 
personal  liability.* 

It  has  been  held  that  a  party  who  has  no  interest  in 
the  mortgaged  premises,  but  who  is  personally  liable  for 
any  deficiency  arising  upon  the  sale,  has  no  right  to  ask 
for  a  resale,  if  he  and  the  representatives  of  his  surety  are 
discharged  from  liability  for  the  deficiency  to  the  extent  of 
the  full  value  of  the  premises,  over  and  above  the  amount 
brought  at  the  former  sale.^  An  owner  of  the  equity  of 
redemption  in  mortgaged  lands,  who  has  made  a  general 
assignment  for  the  benefit  of  his  creditors,  still  retains  an 
interest  in  the  land,  and  may  apply  to  have  a  sale  of  the 
lands  made  under  a  foreclosure  set  aside,  notwithstanding 
such  assignment.* 


*  Goodell  V.  Harrington,  76  N.  *  See  Brown  v.  Frost,  10  Paige 
T.  547  ( 1879 ).  See  Rohrback  v.  Ch.  (N.  T.)  243  (1843) ;  American 
Germania  Ins.  Co.,  63  N.  Y.  47  Ins.  Co.  v.  Oakley,  9  Paige  Ch.  (N. 
(1875).  Y.)  259  (1841). 

»  Fuller  V.  Brown,  35  Hun  (N.  Y.)  •  Bodine  v.  Edwards,    2   N.    Y. 

162,  165  (1885).  Leg.  Obs.  231  (1843) ;   s.  c.  3  Ch. 

«  Kellogg  V.  Howell,  62  Barb.  (N.  Sent.  46.    See  Shuler  v.  Maxwell,  38 

Y.)  280, 284(1872);  Fuller  v.  Brown,  Hun  (N.  Y.)  240  (1885). 

35  Hun  (N.  Y.)  162,   165  (1885);  '  Bodine  v.  Edwards,  2  N.  Y.  Leg. 

May  V.  May,  11  Paige  Ch.  (N.  Y.)  Obs.  231  (1843) ;   8.  c.  3  Ch.  Sent 

201  (1844).     See  American  Ins.  Co.  46. 

V.  Oakley,  9  Paige  Ch.  (N.  Y.)  259  ^  Delaware,  L.  &  W.  R.  Co.  ▼. 

(1841).  Scranton,  34  K  J.  Eq.  (7  Stew.)  42fc 

*  See  Kellogg  v.  Howell,  62  Barb.  (1881). 
(N.  Y.)  280.  283  (1872) ;  Chappel  v. 
Chappel,  12  N.  Y.  215  (1855). 


§  531.]  HOW    SALE    SET   ASIDE.  643 

Each  case  will  be  governed  by  its  own  peculiar  circum- 
stances,' but  it  may  be  stated  as  a  general  rule  on  which 
courts  act  in  setting  aside  sales  made  on  mortgage  fore- 
closures and  in  ordering  resales  of  the  property,  that  equity 
will  not  allow  fraud  or  unfairness  on  the  part  of  any  person 
connected  with  the  sale,"  nor  on  the  part  of  the  purchaser.* 

But  where  property  is  regularly  advertised  and  fairly  sold 
by  a  referee,  or  other  ofiRcer  of  the  court,  such  sale  will  not 
be  set  aside,  and  a  resale  ordered,  on  motion  of  parties  inter- 
ested  in  the  proceeds  of  the  sale,  in  order  to  protect  them 
against  the  consequences  of  their  own  negligence,  where  they 
are  adults  and  were  competent  to  protect  their  rights  on 
the  sale.*  Where  the  party  making  the  motion  has  been 
guilty  of  laches,  he  can  not  have  relief ;  and  where  the  period 
prescribed  by  statute,  within  which  an  action  in  equity  to 
redeem  from  a  mortgage  can  be  brought,  has  been  permitted 
to  expire,  the  court  has  no  power  to  set  the  sale  aside.' 

§  531.  How  sale  may  be  set  aside. — When  it  would 
be  inequitable  to  permit  the  sale  to  stand,  the  proper 
remedy  for  the  party  aggrieved  is  by  a  summary  application 
to  the  court  on  motion  in  the  original  suit,  for  an  order 
setting  the  sale  aside  and  directing  a  resale  of  the  premises.* 
Notice  of  the  motion  for  a  resale  should  be  given  to  all 
persons  who  have  appeared  in  the  suit,  and  to  all  persons 
who  have  any  interest  in  the  property  sold  or  in  the  pro- 
ceeds of  the  sale,  as  well  as  to  the  purchaser  at  the  sale  which 
it  is  sought  to  set  aside.' 


>  Francis  v.  Church,  Clarke  Ch.  (N.  Y.)  515  (1874) ;  s.  c.  46  How. 

(N.  Y.)  475  (1841).    See  Lefevre  v.  (N.  Y.)  Pr.  441.     See  Francis  v. 

Laraway,    23   Barb.    (N.    Y.)  167  Church.ClarkeCh.  (N.Y.) 475  (1841); 

(1856).  Nicholl  v.  Nicholl,  8  Paige  Cli.  (N. 

«  Stahl  V.  Charles,  6  Abb.  (N.  Y.)  Y.)  349  (1840) ;  Warren  v.  Foreman, 

Pr.  348  (1857).  19  Wis.  35  (1865). 

»  Murdock  v.  Empie,  19  How.  (N.  *  McCotter  v.  Jay,  30  N.  Y.  80 

T.)  Pr.  79  (1860).  (1864) ;  Kellogg  v.  Howell,  62  Barb. 

*  American  Ins.  Co.  v.  Oakley,  9  (N.  Y.)  280,  283  (1872) ;  Gould  v. 

Paige  Ch.  (K  Y.)  259  (1841) ;  8.  0.  Mortimer,  26  How.  (K  Y.)  Pr.  167 

88  Am.  Dec.  561.    See  McCotter  v.  (1863);  s.  c.  16  Abb.  (N.  Y.)  Pr.  448. 

Jay,  30  N.  Y.  80  (1864).  '  Robinson  v.  Meigs,  10  Paige  Ch. 

»  Depew  V.   Dewey,   2  T.   &   C.  (N.  Y.)  41  (1843). 


641  HOW    SALE    SET    ASIDE.  [§  531 

It  seems  that  where  a  party  was  so  connected  with  a  fore- 
closure,  that  he  could  have  moved  in  that  action  to  set  the 
sale  aside,  he  can  not  subsequently  maintain  a  suit  to  accom- 
plish the  same  object.'  And  while  it  may  be  questionable 
whether,  after  a  sale  on  foreclosure,  the  defendants  can  have 
such  sale  set  aside  in  opposing  the  purchaser's  motion  for 
confirmation,  yet  there  will  be  no  error  in  setting  such  sale 
aside  upon  an  order  procured  by  a  defendant  requiring  the 
purchaser  to  show  cause  why  a  resale  should  not  be  had.* 

In  the  early  case  of  Brown  v.  Frost,*  it  was  held  that  an 
original  bill  in  chancery  can  not  be  filed  by  a  party  to  a  fore- 
closure to  set  aside  a  master's  sale  under  a  decree,  when 
the  same  relief  could  have  been  obtained  by  a  summary 
application  to  the  court  in  the  action  for  foreclosure.*  Chan- 
cellor Walworth  held  in  this  case,  that  it  would  seriously 
affect  the  interests  of  those  whose  property  was  to  be  sold 
by  a  referee  on  a  mortgage  foreclosure,  if  it  was  understood 
that  questions  affecting  the  rights  of  the  parties  to  the  suit 
could  be  litigated  and  determined  in  collateral  suits,  "  for," 
said  the  chancellor,  "  no  man  of  ordinary  prudence  would 
bid  what  he  believed  to  be  the  fair  cash  value  of  the  property, 
at  a  master's  sale,  if  he  might  be  subjected  to  the  expense 
and  delay  of  a  protracted  chancery  suit  to  determine  whether 
the  proceedings  of  the  master  had  been  strictly  regular."* 

This  doctrine  seems  to  be  questioned  in  Hackley  v. 
Draper ;'  and  in  the  case  of  Vandercook  v.  Cohoes  Savings 
Institution,^  it  is  said  that  an  action  may  be  brought  to  set 


'  Gould  V.  Mortimer,  26  How.  (N.  5  Hun  (N.  Y.)  641  (1875);    Amer- 

Y.)Pr.  167,  169(1863);  B.C.  16 Abb.  ican    Ins.   Co.   v.  Oakley,   9  Paige 

(N.  Y.)  Pr.  448.  Ch.   (N.  Y.)259  (1841);    Nicholl 

'Hubbard  v.  Taylor,  49  Wis.  68  v.   Nicholl,   8  Paige    Ch.   (N.  Y. ) 

(1880).  349  (1840)  ;  Requa  v.  Rea,  2  Paige 

3  10  Paige  Ch.  243  (1843).  Ch.   (N.  Y.)  339  (1831);   Collier  v. 

*  The  same  doctrine  is  held  in  Mc  Whipple,   13  Wend.    (N.    Y.)    224 

Cotter  V.  Jay,    30  N.  Y.  80  (1864^ ;  (1834).   Compare  Hackley  v.  Draper, 

Kellogg  V.  Howell,  62  Barb.  (N.  Y.)  60  N.  Y.  88,  93  (1875). 

280  (1872) ;  Libby  v.  Rosekrans,  55  b  ggg  Brown  v.  Frost,  Hofl.  Ch. 

Barb.  (N.  Y.)  202,  219,  220  (1869)  ;  (N.  Y.)  41  (1839). 

Smith  V.  American  Ins.  Co.,  Clarke  <'60  N.  Y.  88,  93  (1875). 

Ch.    (  N.  Y. )    307    ( 1840 )  ;     Van-  i  5  Hun  (N.  Y.)  641  (1875). 
dercook  v.  Cohoes  Sav.  Institution, 


§  532.]  TIME   OP   APPLYING   TOE    KESALE.  645 

aside  a  sale  made  under  a  decree  of  foreclosure,  if  the  sale  was 
fraudulently  conducted  to  the  prejudice  of  any  party  inter- 
ested in  the  property,  even  though  such  person  may  have  a 
concurrent  remedy  by  motion. 

It  was  held  in  an  early  case,  where  the  officer  making  the 
sale  neglected  to  give  security  for  the  faithful  discharge  of  his 
duties,  as  required  by  law,  and  assumed  to  act  as  such  officer 
and  to  sell  the  premises  under  a  decree  of  foreclosure,  and 
the  report  of  the  sale  was  confirmed  by  the  court,  that  the 
remedy  of  the  party  aggrieved  was  by  an  application  in 
the  action  for  foreclosure,  to  have  the  sale  set  aside  for 
irregularity.  But  such  an  objection,  when  raised  in  a  fore- 
closure, can  not  be  heard  unless  promptly  made.' 

§532.  Time  of  making  application  for  resale.— An 
objection  to  a  sale  should  be  made  promptly ;  if  made  after 
a  great  lapse  of  time,  a  good  excuse  must  be  shown  for  the 
delay.'  As  a  general  rule,  the  proper  time  for  making  an 
application  for  a  resale  is  before  the  confirmation  of  the 
report  of  the  officer  who  conducted  the  sale ;'  but  under  special 
circumstances  the  court  may  set  the  sale  aside  and  order  a 
resale,  even  after  the  confirmation  of  the  report.* 

Where  a  party  moving  for  a  resale  has  been  guilty  of 
laches,  relief  will  not  be  granted  in  the  absence  of  a  good 
excuse  or  of  an  explanation  of  the  delay  ;'  and  if  the  period 
prescribed  by  the  statute,  within  which  an  action  in  equity 

>  Nicholl  V,  Nicholl,  8  Paige  Ch.  »  Brown  v.  Frost,   10  Paige  (N. 

(N.  Y.)  349  (1840).  Y.)  243  (1843).     See  Strong  v.  Doll'- 

*  Lockwood  V.  McGuire,  57  How,  ner,   2  Sandf.   (N.  Y.)  444  (1849)  • 

(N.  Y.)  Pr.   266  (1879) ;  Nicholl  v.  Morice    v.    Durham,     11    Ves.    57 

Nicholl,   8  Paige  Ch.   (N.  Y.)  349  (1805);  Watson  v.  Birch,  2  Ves.  53 

(1840) ;  Hoyt  v.  Pawtucket  Inst,  of  (1793). 

Savings,  110  111.  390  (1884),    See  Mc-  <  See    Lansing  v.   McPherson,    3 


Hany  v,  Schenk,  88  HI.  357  (1878) 

Bush  V.  Sherman,  80  111.  160  (1875) 

Munn  V.  Burges,  70  111.  604  (1873) 

Dempster  v.  West,  69  111.  613  (1873) 

Burr  V.  Borden,  61  HI.  389  (1871) 

Beach  v.  Shaw,  57  111.   17  (1870) 

Hamilton  v.  Lubukee,   51  HI.   415      (K  Y.)  Pr.  266  (1879) 

(1869) ;  Cox  V.  Montgomery,  36  HI. 

896  (1864). 


Johns.  Ch.  (N.  Y.)  424  (1818); 
Ryder  v.  Gower,  6  Bro.  P.  C.  306 
(1766) ;  Price  v.  Moxon,  cited  2  Dan. 
Ch.  Pr.  1290  (1754);  Watson  v. 
Birch,  2  Ves.  52  (1793). 
'  Lockwood  V.  McGuire,  57  How. 


646  TIME   OF   APPLYma   FOR   RESALE,  [§532. 

maybe  brought  to  redeem  from  a  mortgage, has  expired,  the 
court  will  not  set  the  sale  aside  ;*  because,  as  has  been 
said,  "  the  courts  have  found  it  to  be  a  duty,  where  a  party 
has  lost  his  rights  by  lapse  of  time  under  statutory 
provisions  relating  to  them,  to  deny  a  motion  made  for 
relief  after  the  time  for  affording  the  redress  claimed  has 
been  allowed  to  expire  without  an  application  being  made 
to  secure  it.  Any  other  course  would  result  in  a  nullifica- 
tion of  the  statutes,  for  it  would  be  doing  by  indirect  means, 
what  in  substance  the  legislature  has  provided  should  not  be 
done  by  any  means."" 

It  was  held  in  the  case  of  Fuller  v.  Brown,'  that  the 
statutory  limitation  of  one  year  has  no  application  to  a 
motion  to  set  a  sale  aside  and  for  a  resale,  and  that  "  the 
question  of  laches  and  its  effect  are  dependent  upon 
the  circumstances  of  each  particular  case  involving  the  con- 
sideration of  them.  It  would  be  more  strictly  applied,  as 
against  a  purchase  in  good  faith,  by  a  stranger  to  the  pro- 
ceedings, than  to  a  party  privy  to  it  and  not  a  bona  fide 
purchaser.  Also  when  the  rights  of  third  parties  had  inter- 
vened, which  would  be  affected  by  giving  relief."  If  there 
has  been  no  substantial  change  in  the  situation,  which  would 
make  the  granting  of  the  relief  asked  result  to  the  injury  of 
the  purchaser,  the  question  of  laches  will  have  less  impor- 
tance.* 

A  mortgagor  should  avail  himself  without  delay  of  all 
irregularities  in  a  sale  of  the  mortgaged  premises,  whether 
made  by  an  officer  of  the  court  under  a  decree  of  foreclosure 
and  sale,  or  by  the  mortgagee  under  a  power  in  the  mort- 
gage.    Thus,    it  has   been   held   where   the    former  owner 


»  Depew  V.  Dewey,  46  How.  (N.  (N.  Y.)  Pr.  93  (185G) ;  Humphrey  v. 

Y.)  Pr.  441  (1874) ;  s.  c.  3  T.  &  C.  Chamberlain,  11  N.  Y.  274  (1854). 

(N.  Y.)  515.  3  35  Hun  (N.  Y.)  162,  166  (1885). 

*  Depew  V.  Dewey,  46  How.  (N.  *  See  In  re  Woolsey,    95   N.   Y. 

Y.)  Pr.  441,  446  (1874)  ;  s.  c.  2  T.  &  135,  144  (1884) ;  McMurray  v.  Mc- 

C.  (N.  Y.)  515.    See  Salles  v.  Butler,  Murray,  66  N.  Y.  176  (1876)  ;  Lock- 

27  K  Y.  638  (1863) ;  Wait  v.  Van  wood  v.  McGuire,   57  How.  (N.  Y.) 

Allen,  22  N.  Y.  319    (1860);  Fry  v.  Pr.   266  (1879)  ;  Vielc  v.  Judson,  15 

Bennett,  16  How.  (N.  Y.)  Pr.  385  Hun  (K.  Y.)  328  (1878). 
(1858);  Mars  ton  v.  Johnson,  13  How. 


§  533.]  WHEN   RESALE    GRANTED.  647 

knew  of  the  sale  shortly  after  it  was  made,  and  neglected  to 
redeem  the  property  by  paying  the  sum  due  from  him, 
that  a  delay  of  four  years  in  filing  a  bill  to  set  such  sale  aside 
on  the  ground  of  alleged  irregularities  and  inadequacy  of 
price,  was  such  laches  as  to  bar  the  relief  sought/ 

§  533-  When  application  for  resale  will  be  granted — 
When  denied. — A  resale  of  mortgaged  premises  may  be 
ordered  in  case  the  sale  was  improperly,  unfairly  or  unlaw- 
fully conducted,  and  that  fact  is  made  to  appear  to  the 
court."  A  resale  may  also  be  ordered  if  there  was  a  defect 
of  parties  to  the  suit,*  or  if  several  parcels  were  sold  in 
a  lump,*  because  the  parties  interested  in  such  sale  have  a 
right  to  expect  and  to  require  that  the  property  shall  be 
offered  and  sold  in  the  usual  manner,  and  in  accordance  with 
the  requirements  of  law.  If  it  appears  that  the  property 
has  been  sacrificed  by  the  failure  of  the  officer  making  the  sale 
to  comply  with  such  requirements,  the  parties  injured  will 
be  entitled  to  relief  by  a  resale.* 

A  resale  will  be  ordered  where  there  were  no  bidders 
present  at  the  sale  except  the  auctioneer ;'  or  where  the 
purchaser  refuses  to  comply  with  the  terms  of  sale.''  But  if 
the  purchaser  is  financially  responsible,  the  court  may  make 
an  absolute  order  that  he  complete  the  purchase,  or  that  an 


'  Hoyt  V.  Pawtucket  Inst,  of  Sav-  *  Brown  v.  Frost,  10  Paige  Ch.  (J?, 

ings,  110  111.  390  (1884)  ;  Hamilton  Y.)  243  (1843).     See  Lansing  v.  Mc- 

v.^Lubukee,  51  111.  415  (1869).  Pherson.  3  Johns.  Ch.  (N.  Y.)  434 

«  King  V.   Piatt,    37    K   Y.   155  (1818);  Billington  v.  Forbes,  10  Paige 

(1867) ;  8.  c.  35  How.  (N.  Y.)  Pr.  23  ;  Ch.  (N.  Y.)  487  (1843)  ;  American 

8  Abb.    (N.   Y.)  Pr.    N.   S.    434;  Ins.   Co.   v.   Oakley,   9  Paige  Ch. 

Marsh  v.  Ridgway,  18  Abb.  (N.  Y.)  (N.  Y.)  259  (1841) ;  Requa  v.  Rea,  3 

Pr,  262(1864) ;  Lefevre  v.  Laraway,  Paige  Ch.  (N.  Y.)  339  (1831) ;  Tripp 

23  Barb.  (N.  Y.)  167  (1856) ;  Griffith  v.   Cook,   26  Wend.    (N.    Y.)    146 

V.   Hadley,   10  Bosw.   (N.  Y.)  587  (1841)  ;  Bixly  v.  Mead,   18   "Wend. 

(1862) ;    Wolcott     V.    Schenck,    28  (N.  Y.)  611  (1836) ;  GrofE  v.  Jones,  6 

How.  (N.  Y.)  Pr.  385  (1862) :  Lents  Wend.  (N.  Y.)  522(1831). 

V.  Craig,    18  How.   (N.  Y.)  Pr.  73  «  Campbell  v.  Swan,  48  Barb.  (N. 

(1855) ;  s.  c.  2  Abb.  (N.  Y.)  Pr.  294.  Y.)  109  (1865). 

»  Verdin  v.  Slocum,  71  N.  Y.  345  '  Graham  v.  Bleakie,  2  Daly  (N. 

(1877).  T.)  55,  60  (1866). 

*  Ames  V.  Lockwood,  13   How. 
(N.  Y.)  Pr.  555  (1856). 


648  WHEN    KESALE    GRANTED.  [§533. 

attachment  issue  against  him.'  If  the  sale  is  ratified  and 
the  purchaser  still  refuses  to  complete  his  purchase,  the 
court  may  proceed  in  a  summary  way  by  an  order,  and 
direct  a  resale  of  the  property  at  the  risk  of  the  purchaser  at 
the  first  sale.' 

Upon  an  application  for  a  resale  of  property  in  a  mortgage 
foreclosure,  all  the  facts  connected  with  the  sale  and  with 
the  equitable  interests  of  the  various  parties  will  be  taken 
into  consideration  by  the  court.*  When  a  mortgage  fore- 
closure sale  is  fair  and  free  from  fraud,  accident  or  surprise, 
a  resale  will  not  be  ordered  ;  especially,  if  the  equities  of 
the  case  are  in  favor  of  the  purchaser,  as  where  he  has 
a  subsequent  lien  which  will  be  imperiled  by  a  resale.* 

In  Haines  v.  Taylor,*  the  court  held  that  "the  rule  is 
distinctly  and  clearly  laid  down  in  numerous  cases,  that  the 
court  will  not  interfere  except  in  very  special  cases ;  and 
never  when  the  mortgagor  is  an  adult  and  has  an  opportunity 
of  attending  the  sale  and  taking  care  of  his  interests,  and  the 
sale  is  fairly  made.'"  Where  foreclosure  proceedings  are 
entirely  regular  and  free  from  fraud,  the  sale  will  not  be  set 
aside  without  some  legal  reason.  Mere  want  of  knowledge 
of  the  time  and  place  of  the  sale  on  the  part  of  one  who  was  a 
party  to  the  foreclosure,  and  who  was  bound  for  that  reason 
to  use  due  diligence  in  obtaining  information  of  the  sale  in 
order  to  protect  his  rights,  affords  no  sufficient  reason  for  a 
resale.^ 

A  resale  in  a  mortgage  foreclosure  will  not  be  ordered 
merely  because  the  property  was  not  sold  in  separate  parcels. 


1  Graham  v.  Bleakie,  2  Daly  (N.  *  3  How.  (N.Y.)Pr.  206,  207(1848). 
T.)  55,  60  (1866).  See  Miller  v.  Coll-  «  See  JlcColter  v.  Jay,  30  N.  Y.  80 
yer,  36  Barb.  (N.  Y.)  250  (1862)  ;  (1864) ;  White  v.  Coulter,  1  Huu  (N. 
Saunders  v.  Gray,  4  Myl.  &  C.  515  Y.)  357  (1874);  Livingston  v.  Byrne, 
(1811);  Lansdown  v.  Elderton,  14  11  Johns.  (N.  Y. )  555  (1814); 
Ves.  512  (1808).  Billington  v.  Forbes,   10  Paige  Ch. 

2  Schaefer  v.  O'Brien,  49  Md.  253  (N.  Y.)  487  (1843) ;  American  Ins. 
(1878).  Co.  V.  Oakley,  9  Paige  Ch.   (N.  Y.) 

3  Wiley  V.  Angle,  Clarke  Ch.  (N.  259  (1841) ;  Duncan  v.  Dodd,  2  Paige 
Y.)  217  (1840).  Ch.  (N.  Y.)  101  (1830). 

*  Gardiner  V.  Schermerhorn, Clarke  '  McCotter  v.   Jay,  30  N.  Y.    80 

Ch.  (N.  Y.)  101  (1839).  (1864). 


§§  534-535.]     WHEN  SALE  MAY  BE  SET  ASIDE.  649 

if  it  appears  that  no  request  to  sell  in  parcels  was  made  of  the 
referee,  and  that  the  premises,  although  consisting  of  several 
lots,  have  been  so  built  upon  as  really  to  constitute  but  one 
parcel.'  The  transfer  of  a  bid  made  at  foreclosure  sale  is 
not  a  good  ground  for  a  resale.* 

§  534-  When  sale  may  be  set  aside  where  plaintiff  is 
purchaser. — A  mortgagee  has  an  equal  right  with  disinter- 
ested parties  to  purchase  the  mortgaged  premises,  and  the 
mere  fact  that  he  purchased  the  premises  at  a  low  price, 
will  constitute  no  ground  for  setting  the  sale  aside  where  it 
was  fair  and  open,  and  the  bidders  were  in  no  way  deceived.' 
Yet  a  sale  will  be  set  aside  and  a  resale  ordered  upon  less 
evidence  of  fraud,  surprise,  accident  or  misconduct  of  the 
officer  conducting  the  sale,  if  the  plaintiff  or  mortgagee  is 
the  purchaser,  and  the  rights  of  third  parties  or  bona  fide 
purchasers  do  not  intervene,  than  where  a  stranger  to  the 
suit  is  the  purchaser.* 

In  the  case  of  Tripp  v.  Cook,'  the  court  held  that 
"where  the  mortgagee  or  complainant  himself  becomes 
the  purchaser,  the  court  has  not  always  held  the  sale  so 
conclusive  as  where  the  property  has  been  purchased  by 
one  who  was  an  entire  stranger  to  the  suit,  who  had  bid 
for  the  purpose  of  investment  merely."  Where  the  mort- 
gagee becomes  the  purchaser  of  the  premises  at  a  sum  less 
than  the  amount  of  his  mortgage,  the  sale  may  be  opened  on 
motion  of  the  person  who  is  bound  to  make  good  the  defi- 
ciency, upon  the  payment  of  a  reasonable  advance  upon  the 
price  at  which  the  premises  were  publicly  sold.' 

§  535.  What  advance  must  be  bid  on  resale. — Before  a 
sale  made  in  pursuance  of  a  judgment  of  foreclosure  has 
been  confirmed,  the  court  may  open  the  biddings  and  order 


1  McLaughlin  v.  Teasdale,  9  Daly  Y.)  280  (1872) ;  Tripp  v.  Cook,  26 
(N.  Y.)  23  (1880).  Wend.  (N.  Y.)  143(1841).  See  Nugent 

2  Culver  V.  McKeowu,   43  Micli.  v.  Nugent,   54  Mich.   557  (1884); 
322  (1880).  Campbell  v.  Gardner,  11  N.  J.  Eq.  (3 

^Mott  V.   Walkley,  3  Edw.    Ch.  Stock.)  423  (1857). 

(N.  Y.)  590  (1842).     See  N.  Y.  Su-  '  26  Wend.  (N.  Y.)  143,  145(1841). 

premc  Court  Ruh;  61.  «  Littell  v.  Zuntz,  3  Ala.  256  (1841); 

<Kull'J"^'^  V.  Howell,  62  Barb.  (N.  6.  c.  36  Am.  Dec,  415.     See  Mott 


650 


WHAT   ADVANCE   BID    ON    RESALE. 


a  resale,  at  the  instance  of  any  one  who  is  liable  for  the 
deficiency,  on  his  offering  a  sufficient  advance  over  the  sum 
received,  and  paying  the  costs  of  the  former  sale.*  Under 
the  English  practice  it  seems  that  while  the  court  does  not 
confine  itself  to  a  particular  rate  per  centum,  ten  pounds  per 
centum  has  been  adopted  as  the  prevailing  rule.'  But  this 
practice  has  never  been  generally  adopted  in  this  country,* 
because  its  tendency  is  considered  prejudicial  to  the  fair  con- 
duct of  judicial  sales.*  In  this  country,  neither  before  nor 
after  the  confirmation  of  the  report  of  sale,  will  a  resale  be 
ordered  merely  upon  an  offer  of  an  increase  of  price.* 

But  in  Alabama,  where  property  is  sold  under  a  decree  of 
foreclosure  and  is  purchased  by  the  mortgagee,  the  biddings 
will  be  opened  and  a  resale  ordered  before  a  confirmation  of 
the  sale,  if  an  advance  of  not  less  than  ten  per  centum  upon 


V.  Walkley,  8  Edw.  Ch.  (N.  Y.)  590 
(1842);  Woodhull  v.  Osborne,  2 
Edw.  Ch.  (N.  T.)  614  (1836) ;  Lans- 
ing V.  McPherson,  3  Johns.  Ch.  (N. 
Y.)  424  (1818). 

'  See  Lansing  v.  McPherson,  3 
Johns.  Ch.  (N.  Y.)  424  (1818) ;  Far- 
low  V.  Weildon,  4  Madd.  460  (1819). 
It  is  said  in  a  note  to  Farlow  v. 
Weildon,  that  "  when  biddings  are 
opened,  the  person  who  opens  them 
pays  all  the  costs  of  the  former 
purchaser ;  and  I  am  informed  that 
he  has  been  allowed  the  costs  of  an 
agent  who  traveled  a  considerable 
distance  for  the  purpose  of  buying 
for  his  principal." 

*  Garstone  v.  Edwards,  1  Sim.  & 
Stu.  20  (1822).  In  this  case  it  is  said 
that  the  cases  of  Brooks  v.  Snaith, 
3  Ves.  &  B.  144  (1814),  and  White  v. 
Wilson,  14  Ves.  151  (1807),  and  Ex 
parte  Partington,  1  Ball.  &  B.  209 
(1809),  establish  the  fact  that  where 
an  advance  so  large  as  five  hundred 
pounds  is  offered,  the  court  will  act 
upon  it  though  it  be  less  than  ten 
pounds  per  centum. 


« Woodhull  V.  Osborne,  2  Edw. 
Ch.  (N.  Y.)  614  (1836).  See  Lefevre  v. 
Laraway,  22  Barb.  (N.  Y.)  167,  173 
(1856) ;  Lansing  v.  McPherson,  8 
Johns.  Ch.  (N.  Y.)  424  (1818) ;  Wil- 
liamson V,  Dale,  3  Johns.  Ch.  (N. 
Y.)  290  (1818) ;  Duncan  v.  Dodd,  2 
Paige  Ch.  (N.  Y.)  99(1830);  CoUier 
V.  Whipple,  18  Wend.  (N.  Y.)  224 
(1834);  Jackson  v.  Warren,  33  Bl. 
381  (1863) ;  Forman  v.  Hunt,  8  Dana 
(Ky.)614  (1835) ;  Delaware,  L.  &  W 
R.  Co.  V.  Scranton,  34  N.  J.  Eq. 
(7  Stew.)  429,  432  (1881) ;  Adams  v. 
Haskell,  10  Wis.  123  (1859). 

*  Delaware,  L.  &  W.  R.  Co.  v. 
Scranton,  84  N.  J.  Eq.  (7  Stew.)  429 
(1881) ;  Conover  v.  Walling,  15  N. 
J.  Eq.  (2  McCar.)  173,  178  (1852). 

*  Lefevre  v.  Laraway,  22  Barb. 
(N.  Y.)  167, 173  a856).  See  Brown  v. 
Frost,  10  Paige  Ch.  (N.  Y.)  243,  249 
(1843) ;  American  Ins.  Co.  v.  Oak- 
ley, 9  Paige  Ch.  (N.  Y.)  259  (1841) ; 
Tripp  v.  Cook,  26  Wend.  (N.  Y.) 
143  (1841)  ;  Collier  v.  Whipple,  13 
Wend.  (N.  Y.)  224  (1834);  Adams  v. 
Haskell,  10  Wis.  123  (1859). 


§  536.]         GEOUNDS   FOR   SETTING   SALE   ASIDE.  651 

the  former  sale  is  offered  and  the  money  is  deposited  in 
court ;  but  it  seems  that  a  resale  will  not  be  ordered  where 
the  deposit  is  less  than  two  hundred  dollars.* 

§  536.  What  sufficient  grounds  for  setting  sale  aside. 
— It  has  been  said  that  equity  is  ready  to  receive  the  excuses 
of  the  mortgagor,  not  only  to  allow  him  time  to  procure  the 
money  due  on  the  mortgage  before  foreclosure,  but  also  to 
open  the  foreclosure,  if  he  shows  any  good  reason  why  he 
did  not  appear.'  If  the  referee  sells  the  property  under  a 
decree  of  foreclosure  at  an  improper  time,  or  in  such  a  man- 
ner as  to  prevent  a  fair  competition,  or  if  from  any  other 
cause  it  is  inequitable  that  such  sale  should  be  permitted  to 
stand,  the  sale  will  be  set  aside  on  motion.* 

Thus,  where  a  sale  under  a  statutory  foreclosure  was  made 
when  no  person  was  present,  except  the  officer  conducting  the 
sale  who  bid  in  the  property  on  behalf  of  the  mortgagee, 
the  sale  was  set  aside.*  And  where  the  officer  making  the 
sale  disregards  the  written  request  and  instructions  of 
the  plaintiff  and  sells  the  property  at  a  great  sacrifice,  the  sale 
may  be  set  aside,  if  the  purchaser  knew  of  such  written 
instructions.*  A  sale  may  be  set  aside,  especially  before  con- 
firmation, for  fraud,  unfairness  or  irregularity,'  or  for  want 
of  notice ;'  but  it  seems  not  for  mere  inadequacy  of  price,* 
unless  it  results  in  a  clear  sacrifice.' 

The  confirmation  of  the  referee's  report,  it  seems,  will  cure 
all  irregularities  in  proceedings  for  the  sale  of  mortgaged 


»  Littell  V.  Zuntz,  2  Ala.  256(1841);  »  Requa  v.  Rea,  2  Paige  Ch.  (N. 

B.  c.  36  Am.  Dec.  415.  T.)  339  (1831). 

*  Golden  v.  Fowler,  26  Ga.  451,  •  Forman  v.  Hunt,  3  Dana  (K7.) 

463(1858).  614(1835). 


« Marsh  v.  Ridgway,  18  Abb.  (N, 


Y.)  Pr.  262  (1864) ;  Lefevre  v.  Lara-      (1884). 


way,  22  Barb.  (N.  T.)  167  (1856) 
Griffith  V.   Hadley,   10  Bosw.   (N, 
Y.)  587  (1863)  ;  Wolcott  v.  Schenck; 
23  flow.  (N.  Y.)  Pr.   385   (1862) 
Brown  v.  Frost,  10  Paige  Ch.  (N, 


'  Nugent  T.  Nugent,  54  Mich.  657 


"  American  Ins.  Co.  v.  Oakley,  9 
Paige  Ch.  (N.  Y.)  259  (1841) ;  s.  c. 
38  Am.  Dec.  561 ;  Henderson  r. 
Lowry,  5  Yerg.  (Tenn.)  240  (1833) ; 
Hill  V.  Hoover,  5  Wis.  354  (1856) ; 


Y.)  243  (1843).  8.  c.  68  Am.   Dec.    70  ;   Strong  v. 

*  Campbell  v.  Swan,  48  Barb.  109      Catton,  1  "Wis.  471  (1853) ;  West  v. 
(1865).  Davis,  4  McL.  C.  C.  241  (1847). 


652  WHAT    GOOD    GROUNDS    FOE    RESALE.  [§537. 

premises  and  in  the  conduct  of  such  sale ;  but  it  will 
not  cure  a  defect  arising  from  want  of  jurisdiction  of  the 
court,  either  over  the  cause  of  action  or  the  parties  inter- 
ested. Mere  accident  or  mistake,  which  will  generally 
invalidate  a  contract,  may  be  a  good  ground  for  setting  a  sale 
aside  even  after  confirmation.'  But  clearer  and  stronger 
evidence  of  fraud  or  misconduct,  or  of  other  causes  for 
rendering  the  sale  invalid,  will  be  required  to  set  a  sale  aside 
after  than  before  confirmation.* 

§  537*  Irregularity  in  conduct  of  sale. — Any  irregularity 
by  the  referee  in  the  conduct  of  a  mortgage  sale  under  a 
decree  of  foreclosure,  will  be  a  sufficient  ground  for  setting 
it  aside.'  Where  the  officer  making  the  sale  sells  upon 
terms  other  than  those  authorized  by  the  decree,  the  sale 
will  be  irregular,  and  for  that  reason  may  be  set  aside  on 
the  application  of  any  injured  party.*  A  sale  will  also  be  set 
aside  where  its  terms  are  very  different  from  the  usual  terms 
of  statutory  sales,  or  are  unjust  and  oppressive  towards  the 
mortgagor,  as  where  the  officer  making  the  sale  requires  full 
payment  and  performance  by  the  purchaser  within  an  hour's 
time  after  the  sale,  or  requires  that  the  payment  shall  be 
made  in  specie.* 

The  parties  interested  in  the  property  to  be  sold  under  a 
mortgage  foreclosure,  have  the  right  to  expect  that  it  will 
be  offered  and  sold  in  the  usual  manner,  and  in  a  way  that 
will  produce  a  fair  competition  among  the  bidders.  If  the 
property  consists  of  several  parcels,  which,  under  the  rule, 
ought  to  be  sold  separately,  and  they  are  sold  together,  the 
sale  may  be  set  aside  on  the  application  of  any  person 
aggrieved.* 


»  Garrett    v.    Moss,    20    111.    549  »  Goldsmith  v.  Osborne,  1  Edw. 

(1858).  Ch.  (N.  Y.)  560,  563  (1838) ;  Leiits  v, 

'  See  Jackson  v.  Warren,  32  111.  Craig,  13  How.  (N.  Y.)Pr.  72(1855); 

831  (1863).  8.  c.  2  Abb.  (N.  Y.)  Pr.  294. 

-  Lansing  v.  McPherson,  8  Johns.  *  Cunningham  v.  Cassidy,  17  N. 

Ch.  (N.  Y.)  424  (1818).  Y.  276  (1858) ;  American  Ins.  Co.  v. 

3  See  Forman   y.  Hunt,  3    Dana  Oakley,  9  Paige  Ch.    (N.   Y.)   259 

(Ky.)  614  (1835).  (1841) ;    s.    c.    38    Am.    Dec.    561 ; 

*  Hotchkiss  V,  Clifton  Air  Cure,  4  Merchants'  Ins.   Co.  of  New  York 

Eeyes  (JN.  Y.)  170  (1868).  City  v.  Hinman.  3  Abb.  (N.  Y.)  Pr. 


§  538.J     FEW    BIDDEKS    NO    GROUND    FOPw    RESALE.  653 

§  538.  Not  set  aside  because  of  few  bidders. — It  seems 
that  the  facts,  that  the  day  on  which  a  sale  was  advertised  to 
take  place  was  rainy  and  inclement,  and  that  parties  who 
would  have  bid  on  the  premises,  or  a  portion  thereof,  were 
consequently  kept  away  and  that  only  a  few  bidders  were 
present,  do  not  constitute  an  adequate  cause  for  setting  the 
sale  aside.' 

But,  in  the  case  of  Roberts  v.  Roberts,'  it  was  held  where 
the  day  on  which  a  sale  was  advertised  to  take  place  was  so 
inclement  as  to  deter  bidders  from  attending,  and  there  was 
but  one  bidder  present,  who  lived  at  the  place  of  sale  and 
to  whom  the  premises  were  sold,  that  the  sale  should  be  set 
aside  without  inquiring  into  the  sufficiency  of  the  price  for 
which  the  land  was  sold. 

And  it  was  held  in  Campbell  v.  Swan,*  where  no  bidders 
were  present  at  the  sale,  except  the  auctioneer,  who  bid  in 
the  property  on  behalf  of  the  mortgagee,  that  the  sale  was 
void.  The  court  held  that  "  sales  at  public  auction  are 
regulated  by  certain  well-known  rules,  which  are  necessary 
to  create  competition  and  enhance  bids  for  the  property. 
No  one  would  regard  a  sale  at  auction  as  a  fair  sale,  if  the 
auctioneer  should  cry  off  the  property  to  himself.  It  is 
going  far  enough  to  allow  the  attorney  to  become  the 
auctioneer  when  his  client  is  a  bidder  at  the  sale.  But  if 
the  sale  was  unobjectionable  for  the  reason  that  the  attorney 
cried  off  the  property  to  his  client,  who  was  not  present, 
then  I  think  it  should  be  held  void,  upon  the  ground  that  it 
was  not  a  sale  of  the  premises  at  public  auction  within  the 
meaning  of  the  statute.  It  might  have  been  good  if 
the  plaintiff  had  been  present  to  bid  in  the  property ;  but 
it  does  not  satisfactorily  appear,  nor  is  it  found  by  the 
referee,  that  any  one  was  present  when  the  attorney  offered 
the  property  for  sale  and  struck  it  off  to  himself  on  behalf 


455  (1856) ;   Griffith  v.  Hadley,  10  '  Fairfax  v.  Muse,  4  Miinf.  (Va.) 

Bosw.  (N.  Y.)  587  (1862) ;  Wolcott  124  (1813). 

V.  Schenck,  23  How.  (N.  Y.)  Pr.  «  13  Gratt.  (Va.)  639  (1857). 

885   (1862) ;    Breese    v.    Busby,    13  «  48  Barb.  (N.  Y.)  109  (1865). 

How.  (N.  Y.)  Pr.  485  (1855) ;  Quaw 

V.  Lameraux,  36  Wis.  626  (1875). 


654 


INADEQUACY  OF  PKICE RESALE. 


li  ocjy. 


of  his  client  who  was  absent.  There  can  be  no  legal 
auction  if  no  one  is  present  but  the  auctioneer,  and  the  sale 
should  be  postponed." 

§  539.  Inadequacy  of  price. — Mere  inadequacy  of  the 
price  brought  by  the  mortgaged  premises  on  a  foreclosure 
sale  is  not  a  sufficient  ground  for  ordering  a  resale  of  the 
premises,  unless  the  inadequacy  is  so  great  as  to  be 
evidence  of  unfairness  or  fraud.'  It  was  held  by  the 
supreme  court  of  Illinois,  in  the  case  of  Cleaver  v.  Green,' 
that  it  is  not  to  be  expected  that  property  will  bring  as 
much  at  a  forced  sale  as  if  sold  privately  by  judicious 
advertising  and  management,  and  the  fact  that  it  does  not, 
is  not  a  sufficient  reason  for  setting  a  sale  aside,  where 
there  is  no  unfairness  or  fraud,  and  where  there  is  no  such 
inadequacy  of  price  as  to  raise  a  presumption  of  fraud. 

In  the  case  of  O'Donnell  v.  Lindsay,"  it  is  said  that  "to  set 
a  sale  aside,  there  must,  in  addition  to  inadequacy  of  con- 
sideration, be  some  other  excuse,  such  as  surprise,  ignorance, 


«  O'Donnell  v.  Lindsay,  39  N.  T. 
Supr.  Ct.  (7  J.  i&  S.)  523,  532  (1873). 
See  Howell  v.  Mills.  53  N.  Y.  322 
(1873) ;  King  v.  Morris,  2  Abb.  (N. 
Y.)  Pr.  296,  298  (1855) ;  Kellogg  v. 
Howell,  62  Barb.  (N.  Y. )  280 
(1872);  Lefevre  v.  Laraway,  22 
Barb.  (k.  Y.)  167  (1856) ;  Francis 
V.  Church,  Clarke  Ch.  (N.  Y.)  475, 
478  (1841) ;  Gardiner  v.  Schermer- 
horn,  Clarke  Ch.  (N.  Y.)  101  (1839) ; 
Mott  V.  Walkley,  8  Edw.  Ch.  (N.  Y.) 
590  (1842) ;  Woodhull  v.  Osborne,  2 
Edw.  Ch.  (N.  Y.)  614  (1836) ;  Gould 
V.  Gager,  24  How.  (N.  Y.)  Pr.  440 
(1863) ;  s.  c.  18  Abb.  (N.  Y.)  Pr.  32; 
Murdock  v.  Empie,  19  How.  (N. 
Y.)  Pr.  79  (1860) ;  s.  c.  9  Abb.  (N. 
Y.)  Pr.  283;  In  re  Eider,  23  Hun 
(N.  Y.)  91  (1880);  Livingston  v. 
Byrne,  11  Johns.  (N.  Y.)  555  (1814); 
American  Ins.  Co.  v.  Oakley,  9 
Paige  Ch.  (N.  Y.)  259  (1841) ;  s.  c. 
88  Am.  Dec.  561 ;  Duncan  v.  Dodd, 


2  Paige  Ch.  (N.  Y.)  99  (1830);  March 
V.  Ludlum,  3  Sandf.  Ch.  (N.  Y.)  35 
(1845);  Tripp  v.  Cook,  26  Wend. 
(N.  Y.)  143  (1841);  Collier  v. 
Whipple,  13  Wend.(N.Y.)224  (1834); 
Central  Pac.  R.  R.  Co.  v.  Creed, 
70  Cal.  497  (1886)  ;  Garrett  v.  Moss, 
20  Ul.  549  (1858) ;  Wing  v.  Hayford, 
124  Mass.  249  (1878);  King  v. 
Bronson,  122  Mass.  122(1877);  Lalor 
V.  McCarthy,  24  Minn.  417  (1878) : 
Kline  v.  Vogel,  11  Mo.  App.  211 
(18 — );  Wetzlerv.  Schaumann,  24  N. 
J.  Eq.  (9  C.  E.  Gr.)  60  (1873) ;  Hen- 
derson V.  Lowry,  5  Yerg.  (Tenn.) 
240  (1833) ;  Klein  v.  Glass,  53  Tex. 
37  (1880) ;  Hill  v.  Hoover,  5  Wis. 
354  (1856) ;  Strong  v.  Catton,  1  Wis. 
471  (1853) ;  Dryden  v.  Stephens,  19 
W.  Va.  1  (1881) ;  West  v.  Davis,  4 
McL.  C.  C.  241  (1847). 

» 107  Dl.  67  (1883). 

»  39  N.  Y.  Supr.  Ct.  (7  J.  &  S.)523, 
532  (1873). 


^  540.J  INADEQUACY    OF   PEICE EESALE. 


655 


mistake  or  inadvertence.  It  will  be  seen,  however,  from  the 
cases  that  a  great  inadequacy  has  refined  the  ingenuity  of 
the  learned  judges  in  extracting  from  the  facts  of  the  cases, 
sufficient  to  justify  annulHng  the  sale.*" 

§  540.    Motion    to    set   sale  aside  for  inadequacy  of 

price. — In  an  application  to  set  aside  a  sale  of  mortgaged 
premises  and  for  a  resale,  on  the  ground  of  inadequacy  of  con- 
sideration, the  moving  party  should  show  the  true  market 
value  of  the  property  and  not  its  speculative  value.*  A  motion 
to  set  aside  a  sale  made  in  a  mortgage  foreclosure  is  addressed 


>  See  King  v.  Piatt,  37  N.  T.  155 
(1867) ;  McCotter  v.  Jay,  30  N.  Y. 
80  (1864) ;  O'DonneU  v.  Lindsay,  39 
N.  Y.  Supr.  Ct.  (7  J.  &  S.)  523.  533 
(1873) ;  Dwight's  Case,  15  Abb.  (N. 
Y.)  Pr.  259  (1862) ;  King  v.  Morris, 
2  Abb.  (N.  Y.)  Pr.  296  (1855); 
Lefevre  v.  Laraway,  22  Barb.  (N. 
Y.)  167  (1856) ;   Griffith  v.  Hadley, 

10  Bosw.  (N.  Y.)  588  (1862) ;  Francis 
V.  Church,  Clarke  Ch.  (N.  Y.)  475 
(1841) ;  Gardiner  v.  Schermerhorn, 
Clarke  Ch.  (K  Y.)  105  (1839); 
Whitbeck  v.  Rowe,  25  How.  (N.  Y.) 
Pr.  403  (1862) ;  Murdock  v.  Empie, 
19  How.  (N.  Y.)  Pr.  79  (1860); 
Soule  V.  Ludlow,  3  Hun  (N.  Y.)  503 
(1875) ;  Howell  v.  Baker,  4  Johns. 
Ch.  (N.  Y.)  118  (1819) ;  Lansing  v. 
McPherson,  3  Johns.  Ch.  (N.  Y.)426 
(1818) ;  Williamson  V,  Dale,  3  Johns, 
Ch.  (N.  Y.)  292  (1818) ;  Osgood  v. 
Franklin,  2  Johns.  Ch.  (N.  Y.)  23 
(1816);  Jencks  V.  Alexander,  11  Paige 
Ch.  (N.Y.)  619  (1845) ;  May  v.  May, 

11  Paige  Ch.  (N.  Y.)  203  (1844) ;  Bil- 
lington  V.  Forbes,  10  Paige  Ch.  (N. 
Y.)  487  (1843) ;  Brown  v.  Frost,  10 
Paige  Ch.  (N.  Y.)  244(1843) ;  Amer- 
ican Ins.  Co.  V.  Oakley,  9  Paige 
Ch.  (N.  Y.)  259  (1841) ;  s.  c.  38  Am. 
Dec.  561 ;  Requa  v.  Pea,  3  Paige 
Ch.  (N.  Y.)  340  (1&31) ;  Duncan  v. 
Dodd,  2  Paige  Ch.  (X.  Y.)  9'9  (1830); 
Hoppock  V.  Conklin,  4  Sandf .  Ch. 


(N.  Y.)  582  (1847) ;  White  v.  Coulter, 
3  T.  &  C.  (N.  Y.)  608  (1874) ;  Mulks 
V.  Allen,  12  Wend.  (N.  Y.)  253 
(1834) ;  Ontario  Bank  v.  Lansing,  2 
Wend.  (N.  Y.)  261  (1829) ;  Littell  v. 
Grady,  38  Ark.  584  (1882) ;  Webber 
V.  Curtiss,  104  lU.  309  (1882) ;  Mon- 
tague V.  Dawes,  96  Mass.  (14  Allen), 
369  (1867) ;  Vail  v.  Jacobs,  62  Mo. 
130  (1876) ;  Delaware,  L.  &  W.  R. 
Co.  V.  Scranton,  34  N.  J.  Eq.  (8 
Stew.)  429,  432  (1881) ;  Kloepping  v. 
Stellmacher,  21  N.  J.  Eq.  (6  C.  E. 
Gr.)  328  (1871) ;  Marlatt  v.  Warwick, 
18  N.  J.  Eq.  (3  C.  E.  Gr.)  108  (1866); 
Smith  V.  Duncan,  16  N.  J.  Eq.  (1  C. 
E.  Gr.)  340  (1863);  Eberhart  v. 
Gilchrist.  11  N.  J.  Eq.  (3  Stockt.) 
167  (1856) ;  Howell  v.  Hester,  4  N. 
J.  Eq.  (3  H.  W.  Gr.)  266  (1843); 
Mercereau  v.  Prest,  3  N.  J.  Eq,  (3 
H.  W.  Gr.)  460  (1836) ;  Seaman  v, 
Riggins,  2  N.  J.  Eq,  (1  H.  W.  Gr.) 
214  (1839);  Crane  v.  Conklin,  1 
N,  J.  Eq.  (Saxt.)  346  (1831) ;  Sim- 
mons' Ex'rs  V,  Yandergift,  1  IST.  J. 
Eq.  (Saxt.)  55  (1830) ;  Bank  of  New 
Brunswick  v.  Hassert,  1  N,  J.  Eq. 
(Saxt.)  1  (1830) ;  Peacock  v.  Evans, 
16  Ves.  512  (1809) ;  How  v.  Weldon, 
3  Ves.  Sr.  516  (1754). 

«  Barnes  v.  Stoughton.  3  T.  &  C. 
(N.  Y.)  675  (1874).  See  White  v. 
Coulter,  3  T.  &  C.  (K  Y.)  608 
(1874) ;  8.  c.  1  Hun  (N.  Y.)  357, 


656  SUEPEISE GROUND    FOR    RESALE.  [§  541, 

to  the  sound  discretion  of  the  court,  and  in  the  absence  of 
evidence  of  an  abuse  of  such  discretion,  the  order  granted  on 
the  apphcation  will  not  be  appealable ;'  and  it  has  been  said 
that  where  an  order  is  made  in  a  foreclosure  suit  setting 
aside  a  sale,  and  directing  a  reference  to  ascertain  the 
equities  of  the  parties,  reserving  to  either  party  the  right  to 
move  for  confirmation  on  the  coming  in  of  the  report,  such 
order  is  not  appealable.' 

§  541.  Accident  and  surprise  grounds  for  setting  sale 
aside.  — Surprise  is  one  of  the  grounds  upon  which  courts 
will  interfere  and  order  a  resale,  if  a  party  has  suffered  loss 
in  consequence  of  the  property's  having  been  sold  at  a  sacri- 
fice ;*  but,  as  a  general  rule,  where  the  surprise  is  due 
to  the  person's  own  negligence,  and  is  of  such  a  character 
that  it  could  have  been  avoided  by  the  exercise  of  ordinary 
prudence,  the  court  will  not  interfere ;  neither  will  it  inter- 
fere where  the  surprise  was  not  caused  by  the  misconduct  or 
inadvertence  of  the  complainant  or  of  a  third  person,  but  was 
due  to  the  negligence  and  inattention  of  the  party  com- 
plaining.* 

Accident  is  also  one  of  the  causes  for  ordering  a  resale. 
A  sale  of  mortgaged  premises  will  be  set  aside  and  a 
resale  ordered,  where  the  owner  of  the  equity  of  redemp- 
tion appealed  in  good  faith  from  the  judgment  of  foreclosure 
and  sale,  but  owing  to  the  imperfect  justification  of  his 
sureties  in  the  undertaking  given  on  appeal,  the  sale  was  not 
stayed,  and  the  plaintiff  proceeded  and  sold  the  premises 


'  Buffalo  Savings  Bank  v.  New-  the  ground  of  mistake  and  surprise. 

ton,  23  N.  Y.  IGO  (1861) ;  "Wakeman  Such  an  order,  when  it  involves  no 

V.  Price,  3  N.  Y.  334  (1850) ;  Hazle-  strict  legal  right,  is  within  the  diacre- 

ton  V.   Wakeman,  3  How.  (N.  Y.)  tionary  power  of  the  court."     See 

Pr.  357  (1848) ;  White  v.  Coulter,  1  Bergen  v.  Sneddeker,  8  Abb.  (N.  Y.) 

Hun  (N.Y.)  357(1874).  Seepost  §551.  N.  C.  50  (1879). 

"  Dows  V.  Congdon,  28  N.  Y.  122  «  Parkhurst  v.  Cory,  11  N.  J.  Eq. 

(1883).     The   court   held    that   "it  (3  Stockt.)  233  (1856). 

neither,    in    effect,    determines  the  ■•  Parkhurst  v.  Cory,  11  K  J.  Eq. 

action  in  which  it  was  made,  nor  (3  Stockt.)  233  (1858).     See  Francis 

prevents  a  judgment   from  which  v.  Church,  Clarke  Ch.  (N.  Y.)  475, 

an    appeal   might   be  taken.     It  is  478    (1841) ;     Brown    v.    Frost,  10 

gubstuulially  an  order  for  resale  on  Paige  Ch.  (N,  Y.)  243  (1S43). 


§  542.]      SUEPRISE GROUND  FOR  RESALE,        657 

without  notifying  the  owner,  or  returning  the  undertaking, 
bidding  off  the  property  himself  for  much  less  than  its  real 
value,  and  entering  a  judgment  for  deficiency  against  the 
owner.' 

The  court  will  interfere  to  set  aside  a  judicial  sale 
for  inadequacy  of  price  where  there  was  accident  or  sur- 
prise upon  one  side  and  advantage  taken  of  it  on  the  other, 
and  where,  unless  the  court  affords  relief,  the  loss  will 
be  irreparable.'  Thus,  where  the  owner  of  the  premises 
covered  by  the  mortgage  was  a  non-resident  of  the  state, 
and  was  ignorant  of  the  proceedings  to  foreclose  such  mort- 
gage until  after  the  sale  of  the  premises  under  the  decree, 
and  the  agent  to  whom  he  had  confided  the  care  of  the 
property  had  become  insane,  in  consequence  of  which 
the  premises  were  sold  at  a  price  far  below  their  value,  the 
sale  was  set  aside  and  a  resale  ordered.' 

The  defendant  in  a  foreclosure  is  not  required  to  exercise 
more  than  ordinary  prudence  and  diligence  in  protecting  his 
interests  at  the  sale;  and  if  he  uses  as  much  diligence  as  is 
reasonably  practicable  under  all  the  circumstances,  he  will 
be  excusable.  Thus,  where  a  defendant  intends  to  be  pres- 
ent at  the  sale  and  is  prepared  to  bid  for  his  protection,  but 
is  prevented  through  unforeseen  circumstances  from  attend- 
ing, and  the  property  is  sold  to  the  complainants  for  less 
than  its  value,  the  sale  will  be  vacated.* 

§  542.  Fraud  and  misconduct. — A  sale  under  a  decree  of 
foreclosure  will  be  set  aside  and  a  resale  ordered,  where  there 
has  been  fraud  or  misconduct  on  the  part  of  the  purchaser 
or  of  any  person  connected  with  or  directing  the  sale,  or 
where  any  party  in  interest  has  been  misled  or  surprised  by 
the  misconduct  of  the  purchaser  or  of  the  person  directing  the 
sale.*  But  where  a  sale  is  set  aside  on  account  of  the  mere  con- 
structive fraud  of  the  purchaser,  both  he  and  the  mortgagor 


'  Gould  V.  Libby,  24  How.  (N.  Y.)  *  Hoppock  v.  Conklin,  4  Sandf. 

Pr.  440  (1863).  Ch.  (N.  Y.)  583,  586  (1847). 

»  Gould  V.  Gager,  18  Abb.  (N.  Y.)  '  Gardiner  v. Schermerhorn,  Clark* 

Pr.  33  (1863).  Ch.  (N.  Y.)  101  (1839). 

'  Thompson  v.  Mount,  1  Barb.  Ch, 
(N.  Y.)  607  (1846). 


658  FRAUD    AND    MISCONDUCT RESALE.  ^  543. 

are  entitled  to  be  re-instated  in  the  same  position  they  occu- 
pied before  the  sale.' 

It  was  held  in  the  case  of  King  v.  Piatt,*  that  while  the 
law  secures  to  the  creditor  his  just  demand  and  sequestrates 
the  property  of  the  debtor  to  satisfy  it,  still  it  sedulously 
guards  his  interests  in  all  the  various  steps  taken  leading  to 
a  sale  of  the  property,  and  it  will  not  tolerate  the  slightest 
undue  advantage  over  him  even  by  pursuing  the  strictest 
form  of  the  law ;  and  that,  occupying  the  position  of  advan- 
tage, it  behooves  the  complainants  to  pursue  their  remedy 
■with  scrupulous  care  lest  they  should  inflict  an  injury  on 
one  who  is  comparatively  powerless;  and  further,  that  "a 
court  of  equity  justly  scrutinizes  the  conduct  of  a  party 
placed  by  the  law  in  a  position  where  he  possesses  the  power 
to  sacrifice  the  interests  of  another  in  a  manner  which  may 
defy  detection,  and  stands  ready  to  afford  relief  on  very 
slight  evidence  of  unfair  dealing,  whether  it  is  made  neces- 
sary by  moral  turpitude  or  only  by  a  mistaken  estimate  of 
others'  rights." 

Where  a  purchaser  at  a  foreclosure  sale,  by  misrepresenta- 
tion and  deception,  misleads  the  owner,  and  assuming  to  act 
for  him,  obtains  an  adjournment  of  the  sale,  inducing  the 
parties  to  remain  away  therefrom,  and  he  thereby  becomes 
the  purchaser  at  a  nominal  price,  the  sale  will  be  set  aside  at 
the  expense  of  such  purchaser.* 

§  543*  False  statements  generally. — Where  a  plaintiff 
or  his  agent,  by  an  oral  promise  which  he  refused  to  keep, 
induced  the  defendant  to  refrain  from  bidding,  and  was 
thereby  enabled  to  purchase  the  property  for  a  price  less 
than  its  value,  the  sale  was  set  aside.*  And  in  Murdock  v. 
Empie,*  where  a  person  who  had  been  the  agent  of  the 
owner,  acting  in  the  interests  of  the  person  who  afterwards 
purchased  the  property,  made  statements  to  the  junior 
mortgagees  which  induced  them  to  remain  away  from  the 


>  Trotter  v.  White,  26  Miss.  88  *  Banta  v.  Maxwell,  13  How.  (N. 

(1853).  T.)  Pr.  479  (1855). 

«  37  N.  T.  155,  160  (1867).  » 19  How.  (N.  T.)  Pr.  79  (1859)  ; 

*  See  Slocum  v.  Slocum,  3  How.  s.  c.  9  Abb.  (N.  Y.)  Pr.  283. 
(N.  T.)  Pr.  178  (1847). 


§  544.]  FALSE    STATEMENTS RESALK  659 

sale,  so  that  the  property  sold  for  less  than  its  value,  the  sale 
was  set  aside. 

A  sale  will  generally  be  set  aside  if  the  complainant 
misleads  the  defendants  by  false  statements  and  by  promising 
to  have  the  sale  adjourned,  and  afterwards  becomes  the 
purchaser  of  the  property  at  a  price  much  less  than  its 
value.'  And  in  Billington  v.  Forbes,"  where  a  co-defendant 
took  an  improper  advantage  of  the  illness  of  the  mortgagor, 
which  prevented  him  from  attending  the  sale  and  obtaining 
a  postponement  thereof,  and  became  the  purchaser  of  the 
mortgaged  premises  at  less  than  one-third  of  their  real  value, 
the  sale  was  set  aside  and  a  resale  ordered. 

In  another  case,"  where  the  plaintiff  bid  off  a  parcel  of  land 
and  another  parcel  was  subsequently  put  up  by  his  direction, 
and  he  then  canceled  his  bid  on  the  first  parcel  directing  the 
two  parcels  to  be  sold  together,  and  became  the  purchaser 
thereof,  the  sale  was  set  aside.  And  in  May  v.  May,*  where 
the  property  was  sold  for  a  tenth  of  its  value,  bidding  hav- 
ing been  discouraged  by  some  one,  though  there  was  no 
evidence  connecting  the  purchaser  with  the  fraud,  the  sale 
was  set  aside  on  the  application  of  a  judgment  creditor 
whose  lien  was  foreclosed  and  barred  by  the  action. 

§  544.  Misleading  statements  and  representations  by 
referee  or  plaintiff. — A  sale  of  mortgaged  premises  may  be 
set  aside  where  judgment  creditors  were  prevented  from 
attending  and  bidding  at  the  sale,  in  consequence  of  an 
impression  received  from  the  master  that  the  sale  was  not 
to  take  place  on  the  day  appointed,  although  there  was  no 
collusion  between  the  officer  conducting  the  sale  and  the 
purchaser,  provided  the  judgment  creditors  will  make  an 
advance  at  the  resale  upon  the  bid  at  which  the  property  was 
struck  off,  to  an  amount  sufificient  to  cover  their  demands.' 

And  where  the  premises  were  sold  to  the  mortgagee  at 
a  price  greatly   below   their    value,   if   the    mortgagor  or 


>  Francis  v.  Church,  Clarke  Ch.  »  Woodruff  v.  Bush,  8  How.  (N. 

(N.  Y.)  475  (1841).  T.)  Pr.  117  (1853). 

« 10  Paige  Ch.  (N.  T.)  487  (1843).  •*  11  Paige  Ch.  (N.  T.)  201  (1844), 

See  May  V.May,  11  Paige  Ch.(N.Y.)  'Collier  v.   Whipple,   13  Wend. 

201  (1844;.  (N.  Y.)  224  (1834). 


660  MISLEADING    STATEMENTS    BY    liEFEUEE.       [§  545. 

those  standing  in  his  place  were  misled  by  the  mortgagee 
or  by  a  third  person  even,  in  reference  to  the  foreclosure 
of  the  mortgage,  in  consequence  of  which  they  did  not 
attend  the  sale,  a  resale  will  be  ordered.'  And  if  the  notice 
of  the  place  where  the  sale  is  to  be  held  is  so  indefinite  that 
the  agents  of  the  parties,  who  are  present  in  the  building 
for  the  purpose  of  attending  and  bidding  at  the  sale,  do  not 
know  where  it  is  to  be  held,  and  are  not  aware  of  its  pro- 
gress, the  sale  will  be  set  aside.* 

A  sale  may  be  set  aside  on  the  ground  of  surprise  and 
misapprehension  created  by  the  conduct  of  the  purchaser 
or  of  some  person  interested  in  the  sale,*  or  by  the  conduct  of 
the  officer  who  has  charge  of  the  sale,*  or  where  such  ofificer 
makes  an  announcement  at  the  sale  which  is  calculated  to 
deter  bidders,  and  to  impair  the  price  that  might  otherwise 
be  offered.  Where  the  officer  making  the  sale  disobeyed 
his  instructions  through  ignorance  of  his  duty,  and  sold  the 
property  to  parties  who  were  acquainted  with  his  instruc- 
tions, for  much  less  than  its  real  value,  the  court  set  the  sale 
aside  and  refused  to  indemnify  the  purchasers.* 

It  is  intimated  in  Gardiner  v.  Schermerhorn,*  that  where 
the  defendant  misunderstands  his  liability,  this  will  in  some 
instances  be  a  sufficient  ground  for  vacating  the  sale.  Tkis 
was  a  case  in  which  the  mortgaged  premises  had  been  sold 
under  a  new  court  rule,  which  changed  the  practice  as  to  the 
publication  of  the  notice  of  sale  and  with  which  the  mort- 
gagee was  not  familiar. 

§  545.  Negligence  in  objecting,  and  acquiescence  in 
sale. — Although  a  sale  may  be  unauthorized  or  irregular, 
yet  the  defendant   by  failing  to   object   thereto   within   a 


'  Tripp  V.  Cook,  26  Wend.  (N.Y.)  See  also  Lansing  v.  McPherson,  3 

143(1841).  Johns.   Ch.   (N.   Y.)  424  (1818); 

*  Kellogg  V.  Howell,  62  Barb.  (N.  Brown  v.  Frost,  10  Paige  Ch.  (N. 
y.)  280  (1872).  Y.)  243  (1843) ;   Tripp  v.  Cook,  26 

»  Lefevre  v.   Laraway,   22  Barb.  Wend.  (N.  Y.)  143  (1841) ;    Collier 

(N.  Y.)  167, 173  (1858).    See  Gould  v.  v.  Whipple,  13  Wend.  (N.  Y.)  224, 

Gager,  18  Abb.  (N.  Y.)  Pr.  32  (1863).  227  (1834). 

*  Stahl  V.  Charles,  5  Abb.  (N.  Y.)  *  Requa  v.  Rea,  2  Paige  Ch.  (N. 
Pr.  348  (1857)  ;  Lefevre  v.  Laraway,  Y.)  339  (1831), 

22  Barb.   (N.   Y.)   167,    173  (1856).  *  Clarke  Ch.  (KY.)  101, 104(1839). 


§546.]  AOQUrESOENOE   WAIVi:S   EIGHT   TO    EESALE.  661 

reasonable  time,  may  lose  his  right  to  have  it  set  aside, 
acquiescence  in  the  sale  operating  as  an  estoppel.  Thus,  in 
a  case  where  the  sale  of  a  portion  of  the  premises  was  not 
authorized  by  the  judgment,  but  the  owner  of  the  equity 
of  redemption  acquiesced  therein  and  neglected  to  object 
to  the  proceedings  had  for  the  distribution  of  the  surplus,  it 
was  held  that  such  owner  was  estopped  from  questioning 
the  validity  of  the  title  acquired  by  the  purchaser  under 
such  sale.' 

In  a  recent  California  case,*  it  appeared  that  the  party 
knew  of  the  time  and  place  of  the  sale,  but  that  he 
neglected  to  give  any  instructions  to  his  agent  in  reference 
thereto  until  the  day  preceding  the  sale,  when  he  telegraphed 
to  him  and  wrote  to  the  officer  of  the  court  deputized  to 
make  the  sale,  offering  to  purchase  the  property  for  the 
amount  of  the  judgment  and  costs,  and  instructing  them  to 
make  a  bid  to  that  effect  at  the  sale.  Because  of  atmos- 
pheric disturbances  neither  the  telegram  nor  the  letter 
was  received  by  the  parties  to  whom  they  were  sent  until 
after  the  sale.  The  sale  was  made  to  the  respondent 
for  a  less  price  than  that  offered  by  the  plaintiff ;  but 
the  plaintiff  accepted  the  purchase  money  and  kept  it  for 
five  months,  when,  without  offering  to  return  the  money,  he 
moved  to  set  the  sale  aside  on  the  ground  of  surprise ;  the 
motion  was  held  to  have  been  properly  denied. 

§  546.  Objections  waived  by  delay. — The  law  presumes 
all  sales  valid  and  effectual.*  Where  a  sale  made  under  a 
judgment  of  foreclosure  is  irregular  or  voidable  for  any 
reason,  the  party  aggrieved  must  move  to  have  the  sale  set 
aside  within  a  reasonable  time,  for  it  will  not  be  disturbed 
if  he  becomes  guilty  of  laches.*  And  where  the  period  pre- 
scribed by  statute,  within  which  an  action  may  be  brought 
in   equity   to  redeem  the  premises,  has  been   allowed  to 


'  McBride  v.  Lewisohn,  17  Hun  *  Depew  v.  Dewey,  46  How.  (N. 

(N.  Y.)  525  (1879).  Y.)  Pr.  441  (1874) ;  Rigney  v.  SmaU, 

«  Central  Pac.  R.  Co.  v.  Creed,  70  60  111.  416  (1871) ;  Roberts  v.  Tlem- 

Cal.  497  (1886).  ing,  53  111.  196  (1870)  ;  Hamilton  v. 

8  Rigney    v.   Small,    60    IlL    416  Lubukee,  51  111.  415  (1869). 
(1871). 


662  OBJECTIONS    WAIVED    BY    DELAY.  [§547. 

expire  without  an  application  for  a  resale,  the  court  will 
have  no  power  to  set  the  sale  aside.'  But  mere  delay 
on  the  part  of  the  plaintiffs  in  asserting  their  rights,  where 
the  action  is  commenced  within  the  time  limited  for  the 
commencement  of  such  actions  and  where  the  defendant 
has  not  been  prejudiced  by  the  delay,  will  not  affect  or 
defeat  the  plaintiff's  right  of  action." 

A  delay  of  four  years  after  the  mortgagor  had  knowledge 
of  the  sale,  has  been  held  to  preclude  him  from  maintaining 
against  subsequent  purchasers,  a  bill  to  redeem  on  the 
alleged  ground  of  a  defective  notice  of  the  sale  and  inade- 
quacy of  price."  Where  between  seven  and  eight  years  had 
elapsed,  the  court  declined  to  inquire  whether  the  price  bid 
was  inadequate,  or  whether  the  premises  should  have  been 
sold  in  parcels.*  And  where  exceptions  to  the  report  of  the 
ofificer  making  the  sale  of  the  mortgaged  premises  were 
taken  ten  years  after  the  approval  and  confirmation  of  the 
report  of  sale,  they  were  held  to  come  too  late,  unless 
it  was  made  to  appear  that  some  positive  injury  had 
resulted." 

Where  a  mortgagor  informs  another  person  that  he  has 
no  title  to  the  mortgaged  premises  and  that  a  foreclosure  had 
been  held  and  the  time  for  redemption  had  expired,  and 
thereby  induces  such  other  person  to  buy  the  certificate  of 
foreclosure  sale,  he  will  be  estopped  from  afterwards  ques- 
tioning the  regularity  of  the  sale  as  against  such  purchaser.* 

§  547.  Excusable  mistakes  as  grounds  for  setting  sale 
aside. — The  excusable  mistake  of  a  party  in  interest  is  a 
ground  for  vacating  a  sale  and  ordering  a  resale,  if  such 
mistake  caused  the  property  to  bring  a  less  price  than  it 


'  Depew  V.  Dewey.  46  How.  (N.  *  McMurray  v.  McMurray,  66  N. 

Y.)  Pr.  441  (1874).     See  also  Salles  T.  175  (187G). 

V.  Butler,  27  N.  Y.  638  (1863) ;  Wait  »  Hamilton    v.   Lubukee,    51    111. 

V.  YauAllen,  22  N.  Y.  319  (1860) ;  415  (1869). 

Humphrey  v.   Chamberlain,  11  N".  *  Roberts  v.  Fleming,  53  111.  196 

Y.  274  (1854) ;  Fry  v.   Bennett,  16  (1870). 

How.  (N.  Y.)  Pr.  385  (1858) ;  Mars-  *  Garrett  v.  Moss,  20  111.  549(1858). 

ton  V.  .Johnson,  13  How.  (N.  Y.)  Pr.  «  Curyea    v.    Berry,    84    111.    600 

93  (1856).  (1877).  " 


§  547.]  EXCUSABLE   MISTAKES EESALE.  663 

Otherwise  would.*  Thus,  where  the  owner  of  an  equity  of 
redemption  appealed  in  good  faith  from  a  judgment  of  fore- 
closure, but  owing  to  the  imperfect  justification  of  the 
sureties  to  the  undertaking  given  on  the  appeal,  the  sale  was 
not  stayed,  and  the  plaintiff  proceeded  to  sell  the  premises 
without  notifying  the  owner,  or  returning  the  undertaking  to 
him,  bidding  off  the  premises  himself  for  one-third  less  than 
their  real  value,  and  taking  a  decree  against  the  owner  for 
the  deficiency,  the  sale  was  set  aside  and  a  resale  ordered.' 

And  where  the  proper  undertaking  to  stay  proceedings 
pending  an  appeal  from  a  judgment  of  foreclosure,  was 
served  and  filed  some  time  after  the  service  of  the  notice  of 
appeal,  and  was  returned  on  the  ground  that  it  was  not 
served  in  time  and  was  not  in  due  form,  and  the  defendant 
thereupon  made  a  special  motion  to  stay  the  proceedings 
founded  on  such  undertaking,  which  motion  was  denied  on 
the  ground  that  it  was  not  necessary,  and  the  plaintiff 
proceeded  to  sell  the  premises,  the  sale  was  vacated  on 
terms  and  the  proceedings  stayed  until  decision  upon  the 
appeal.* 

It  has  been  said  that  where  an  undertaking  given  to  stay 
proceedings,  pending  an  appeal  from  a  decree  of  foreclosure, 
's  in  substantial,  though  not  exact,  compliance  with  the 
requirements  of  the  Code,  the  plaintiff  should  move  to  set 
it  aside ;  and  if,  without  doing  so  or  giving  notice  of  the 
defect,  he  proceeds  to  sell  the  premises  under  the  judgment, 
the  sale  must  be  set  aside  and  a  resale  ordered.* 

In  Williamson  v.  Dale,'  where  the  executors  of  the 
mortgagor  were  innocently  misled  and  induced  to  believe 
that  the  sale  of  the  mortaged  premises  would  not  take 
place    on    the    day    appointed,    there    being    no    culpable 


'  Williamson  V.  Dale,  3  Johns.  Ch.  Pr.  440  (1863) ;  s.  c.  mb  nom.  (Jould 

(N.  Y.)  290  (1818).     See  Parfitt  v.  v.  Gager,  18  Abb.  (N.  T.)  Pr.  33. 

Warner,  13  Abb.  (N.   T.)    Pr.   471  See^o««§551. 

(1861) ;  King  v.  Morris,  2  Abb.  (N.  «  Smith  v.  Heermance,  18  How. 

Y.)  Pr.  296  (1855) ;  Gould  v.  Gager,  (N.  Y.)  Pr.  261  (1859). 

24  How.  (N.  Y.)  Pr.  440  (1863)  ;  <  Parfitt  v.  Warner,  13  Abb.  (N. 

Smith  V.  Heermance,  18  How.  (N.  Y.)  Pr.  471  (1861).    See  post  §  551. 

Y.)  Pr.  261  (1859).  »  3  Johns.  Ch.  (N.  Y.)  290  (1818). 

*  Gould  V.  Libby,  24  How.  (N.  Y.) 


664  TEEMS    IMPOSED    ON    RESALE.     [§§  548-540. 

negligence  on  their  part,  the  court,  under  all  the  circum- 
stances of  the  case,  ordered  the  sale  to  be  set  aside  on  the 
ground  of  surprise,  though  the  sale  was  perfectly  regular 
and  open  and  no  unfair  intention  was  imputed  to  the  mort- 
gagee or  his  solicitors ;  but  the  court  added,  as  a  condition, 
that  the  defendant  should  pay  to  the  purchaser  all  his  costs 
and  expenses,  and  the  costs  of  the  application  for  a  resale. 

§  548.  Terms  imposed. — A  sale  of  mortgaged  premises 
made  under  the  directions  of  the  court  in  a  mortgage  fore- 
closure will  be  set  aside  and  a  resale  ordered  only  upon 
terms.  The  proper  terms  to  be  imposed  depend,  of  course, 
upon  the  circumstances  of  each  particular  case.'  Where  the 
conditions  and  circumstances  are  such  that  the  court  is  com- 
pelled to  set  a  sale  aside  and  to  order  that  the  property  be 
resold,  the  former  purchaser  must  be  fully  and  liberally 
indemnified  for  all  damages,  costs  and  expenses  to  which  he 
has  been  subjected."  These  include  the  deposit  or  percent- 
age paid  by  him  on  the  sale,  the  expense  of  investigating 
the  title,  the  costs  of  the  motion  for  repayment,  if  he  is 
compelled  to  make  a  motion,'  the  interest  on  his  deposit 
and  on  as  much  of  the  purchase  money  as  he  has  kept  on 
hand  ready  for  payment,  together  with  all  the  reasonable 
costs  and  expenses  which  he  has  paid  or  been  subject  to  in 
opposing  the  application  for  a  resale.* 

But  where  a  purchaser  employs  counsel  and  instructs  him 
to  insist  upon  his  right  to  retain  an  unconscientious  advan- 
tage obtained  by  him  in  the  sale  and  purchase  of  the  prem- 
ises, through  the  fraud  of  some  one,  he  can  not  have  costs 
allowed  him  for  an  unsuccessful  resistance  of  the  motion  to 
set  the  sale  aside.* 

§  549.  Effect  upon  purchaser  of  order  setting  sale 
aside. — On  becoming  a  purchaser  at  a  foreclosure  sale,  a 
party  submits  himself  to  the  jurisdiction  of  the  court  as  to 


'  Francis  v.   Church,  Clarke  Ch.  »  Raynor  v.  Selmes,  52  N.  T.  579 

(N.  Y.)  475  (1841).  (1873). 

*  Duncan  v.    Dodd,  2  Paige  Ch.  *  Duncan  v.  Dodd,  2  Paige  Ch. 

(N.  Y.)99(1830).  See  May  v.  May,  H  (N.  Y.)  99,  102  (1830). 
Paige  Cli.  (N.  Y.)  201,  204  (1844). 


§  549.]       EFFECT  ON  puhohasee  of  resale.  665 

all  matters  connected  with  the  sale  or  relating  to  him  in  the 
character  of  purchaser.'    And  all  persons  who  acquire  title 
from  and  under  him,  take  it  subject  to  the  same  jurisdiction. 
A  conveyance  to  a  bona  fide  purchaser  does  not  take  away  or 
affect  the  jurisdiction  of  the  court,  although  it  may  be  a 
circumstance  which  will  influence  the  court  in  the  exercise 
of  its  discretion  in  granting  an  order  to  set  the  sale  aside  ; 
because  a  grantee  takes  the  place  of  his  grantor  and  con- 
sents to  the  same  jurisdiction,  under  and  subject  to  which 
the  title  is  held.     He  has  notice  of  the  source  of  his  grantor's 
title  and  knowledge  of  the  power  of  the  courts  over  a  title 
thus  acquired,  and  takes  no  better  nor  more  perfect  title  as 
against  the  interference  of  the  court  than  his  grantor  had.' 
An  order  setting  aside  a  sale  made  under  a  decree  of 
foreclosure  destroys  the  title  of  the  purchaser  at  such  sale, 
and  consequently  that  of  his  grantees.*     In  all  cases  where 
the  sale  is  set  aside,  the  purchaser  is  entitled  to  be  restored 
to  the  same  position  he  occupied  before  the  purchase,  and 
is  entitled  to  be  re-imbursed  for  the  amount  paid  on  the 
purchase.* 

It  has  been  held,  where  the  purchaser  took  possession 
of  the  property  and  made  improvements  thereon,  after 
being  informed  by  the  officer  making  the  sale  that  the  facts 
would  be  submitted  to  the  court,  and  without  waiting  for 
the  confirmation  of  the  report  of  sale,  that  he  was  not  entitled 
to  indemnity  therefor.'  If  the  purchaser  enters  into  posses- 
sion before  the  sale  is  set  aside,  he  will  be  required  to  account 

» May  V.  May,  11  Paige  Ch.  (N.  &  S.  381  (1823) ;  Lansdown  v.  Elder- 

T.)  201,  204  (1844).  ton,  14  Ves.  512  (1808). 

*»  Hale  V.  Clauson,  60  N.  Y.  341  =  Hale  v.  Clauson,  60  N.  T.  341 

(1875);  Cazet  v.  Hubbell,  36  N.  Y.  (1875). 

677   (1867) ;    Miller  v.   CoUyer,   36  »  Freeman  v.  Munns,  15  Abb.  (N. 

Barb.  (N.  Y.)  250.  254  (1862) ;  In  re  Y.)  Pr.  468  (1863);  affirmed  30  How. 

Davis,  7  Daly  (N.  Y.)  1,  8  (1877) ;  (N.  Y.)  Pr.  592 ;  Insurance  Co.  v. 

Willets  V.  VanAlst,  26  How.  (N.  Y.)  Sampson,  38  Obio  St.  672  (1883) ; 

Pr.  325,  844  (1864) ;  Brasber's  Exr's  McBain  v.  McBain,  15  Obio  St.  337 

v.Cortlandt,  2  Jobns.  Cb.  (N.  Y.)  (1864). 

605  (1817) ;  Requa  v.  Rea,  2  Paige  *  Trotter  v.  Wbite,  26  Miss.  88 

Cb.  (N.  Y.)  339  (1831) ;  Crane  v.  (1853).    See  ante  §  548. 

Stiger,  2  T.  &.  C.  (N.  Y.)  577,  579  »  Requa  v.  Rea,  2  Paige  Cb.  (N. 

(1874) ;  Casamojor  v.  Strode,  1  Sim.  Y.)  339  (1831). 


666  EFFECT    OF    RESALE    OX    PURCHASER.  [§  550 

for  the  rents  and  profits  received  by  him  while  in  posses- 
sion, for  the  benefit  of  the  mortgagor  or  the  owner  of  the 
equity  of  redemption.* 

In  the  case  of  Fort  v.  Roush,*  where  a  portion  of  the 
mortgaged  premises  was  purchased  by  the  mortgagee,  and 
the  sale  as  to  him  was  set  aside  on  account  of  his  fraudulent 
conduct,  and  the  mortgagor  sought  to  charge  him  with  the 
value  of  the  use  and  occupation  of  such  part  while  it  was 
in  his  possession  under  such  purchase,  and  also  with  damages 
for  waste,  the  supreme  court  of  the  United  States  held  that 
a  judgment  should  be  rendered  against  him  only  for  so  much 
of  the  sum  found  to  be  due  for  such  use  and  damages  as 
exceeded  the  amount  necessary  to  satisfy  the  decree. 

Where  a  person  interested  in  the  property  is  not  made  a 
party  to  the  foreclosure,  but  subsequently  to  the  sale  redeems 
the  property,  the  purchaser  will  be  liable  to  account  for  the 
rents  and  profits,  and  he  will  be  under  a  like  obligation  in  case 
of  the  foreclosure  of  an  outstanding  incumbrance  in  another 
suit,  acquiring  in  such  case  only  the  rights  of  a  mortgagee 
in  possession." 

§  550.  Setting  sale  aside  for  benefit  of  infants. — Infant 
owners  will  be  relieved  by  a  resale,  where  their  property  has 
been  sacrificed  through  the  misapprehension  or  neglect  of 
their  natural  or  statutory  guardian."  And  where  it  is 
apparent  that  a  resale  will  benefit  the  infant  owners,  such 
order  may  be  made  on  the  motion  of  the  court  in  its  capacity 
of  universal  guardian  of  all  infants,  and  by  virtue  of  its 
obligation  to  exercise  a  general  superintendence  and  pro- 
tective jurisdiction  over  their  persons  and  property.* 

In  Duncan  v.  Dodd,'  where  the  property,  which  was  the  only 
estate  belonging  to  two  infant  children,  had  been  sold  under 


'  Raun  V.  Reynolds,  15  Cal.  459  *  Lefevre  v.   Laraway,   22  Barb. 

1860) ;  a  c.  18  Cal.  275  (1861) ;  Fort  (N.    Y.)  167    (1856) ;     Gardiner    v. 

Y.  Roush,  104  U.  B.  (14  Otto),  142  Schermerhorn,   Clarke  Cli.  (N.  Y.) 

(1881) ;  bk.  26  L.  ed.  664.  101  (1839). 

«  104  U.  S.  (14  Otto;,  142  (1881) ;  ^  Lefovre  v.   Laraway,   22  Barb, 

bk.  26  L.  ed.  664.  (N.  Y.)  167  (1856). 

«  Walsh  V.  Rutgers  Fire  Ins.  Co.,  ^  2  Paige  Ch.  (X.  Y.)  99  (ISCO). 
13  Abb.  (N.  Y.)  Pr.  33  (1861). 


§  551.]  SETTING   salt;   aside   foe   INEAin'S.  667 

a  decree  of  foreclosure  for  half  its  value  to  satisfy  a  debt 
nearly  equal  to  the  amount  of  the  bid,  a  resale  was  ordered 
upon  security  being  given  that  the  premises  should  produce 
fifty  per  centum  advance  upon  such  resale,  and  that  interest 
on  the  whole  purchase  money  should  be  paid  to  the  pur- 
chaser, together  with  the  reasonable  costs  and  expenses 
which  he  had  incurred  in  consequence  of  the  purchase. 

Where  the  property  rights  of  infants  are  concerned,  the 
courts  will  exercise  a  most  vigilant  care  in  protecting  their 
interests  and  will  hold  their  guardians,  and  all  who  are 
engaged  in  managing  or  disposing  of  their  property,  not 
only  to  a  rigid  adherence  to  principles  of  good  faith,  but  to 
the  strict  performance  of  every  duty ;  and  where  there  is 
a  collusive  arrangement  to  prevent  competition  at  a  judicial 
sale,  such  a  sale  will  be  injurious  to  the  interests  of  the 
infants,  and  will  be  a  fraud  in  equity,  and  relief  will  be 
granted  against  such  fraud  by  ordering  a  resale.* 

But  it  seems  that  the  court  will  not  set  aside  a  judicial  sale 
on  the  ground  that  the  guardian  of  the  infants  who  are 
interested,  failed  to  attend  the  sale,  unless  it  is  shown  that 
in  consequence  of  such  non-attendance  the  property  sold  at 
a  less  price  than  it  would  have  brought  if  the  guardian  had 
been  present ;  and,  where  the  sale  was  well  attended  and 
fairly  conducted,  it  should  not  be  set  aside,  even  at  the 
instance  of  the  infants,  unless  it  is  made  to  appear  that 
upon  the  resale,  their  share  of  the  proceeds,  after  indem- 
nifying the  purchaser  at  the  first  sale,  will  be  materially 
increased.' 

§  551.  Appeal  from  order  on  application  for  resale. — 
The  granting  of  an  order  for  a  sale  of  mortgaged  premises  is 
a  matter  resting  in  the  sound  discretion  of  the  judge  who 
hears  the  motion  ;*  but  it  is  thought  that,  notwithstanding 
this  fact,  the  order  granting  or  denying  the  motion  for  a 
resale  is  appealable  to  the  general  term/  though  not  to  the 


>  HoweU  V.  MUls,  53  JT.  Y.  823  «  See  Howell  v.  Mills,  53  N.  T- 

(1878).  822,  333  (1873). 

«  Stryker  v.  Storm,  1  Abb.  (N.  T.)  *  See  Fisher  v.  Hersey,  78  N.  T. 

Pr.  N.  S.  424  (1866).  387  (1879).  But  it  was  held  in  Touns 


668 


APPEAL  FROM  OEDER  FOR  RESALE. 


[§  551. 


court  of  appeals.*  By  the  section  of  the  Code,'  providing 
for  appeals  from  orders  of  a  judge  to  the  general  term,  one 
of  the  cases  in  which  an  appeal  may  be  taken  is  where  the 
order  involves  the  merits  of  the  action  or  some  part  thereof, 
or  affects  a  substantial  right.  It  is  thought  that  an  order 
granting  or  refusing  a  resale  affects  the  substantial  rights  of 
the  parties  to  the  action,  and  that  any  party  considering 
himself  aggrieved  is  entitled  to  appeal  to  the  general  term 
from  such  order.* 

A  motion  in  the  supreme  court  to  vacate  a  sale  of  real 
estate  made  on  a  mortgage  foreclosure,  where  the  sale  was 
regularly  made,  is  addressed  to  the  sound  discretion  and 
favor  of  the  court,  and  the  order  made  on  such  a  motion  is 
not  therefore  appealable  beyond  the  general  term.*  Where 
fraud  is  alleged,  upon  facts  casting  such  a  degree  of  suspicion 
upon  the  fairness  of  the  sale  as  to  render  it,  in  the  judgment 


V.  Bloomer,  22  How.  (N.  Y.)  Pr.  383, 
that  where  no  irregularity  is  alleged 
against  the  judgment  or  sale  such 
an  order  is  not  appealable  to  the 
general  term. 

'  Hale  V.  Clauson,  60  N.  Y.  341 
(1875) ;  Dows  V.  Congdon,  28  N.  Y. 
122  (1863) ;  Briggs  v.  Bergen,  23  K 
Y.  162  (1861) ;  Wakeman  v.  Price, 
3  N.  Y.  334  (1850) ;  Bergen  v.  Sned- 
ecker,  8  Abb.  (N.  Y.)  N.  C.  50 
(1879),  reversing  18  Hun  (N.  Y.) 
355 ;  Hazleton  v.  Wakeman,  3  How. 
(N.  Y.)  Pr.  357  (1848). 

«  N.  Y.  Code  Civ.  Proc.  §§  1347, 
1348. 

*  See  Central  Nat.  Bank  v.  Clark, 
34  N.  Y.  Supr.  Ct.  (2  J.  &  S.)  487 
(1872) ;  Dollard  v.  Taylor,  33  N.  Y. 
Supr.  Ct.  (1  J.  &  S.)  496  (1871); 
People  V.  New  York  Cent.  K.  Co., 
29  N.  Y.  418,  421  (1864) ;  In  re 
Duff,  41  How.  (N.  Y.)  Pr.  350 
(1870) ;  s.  c.  10  Abb.  (N.  Y.)  N.  S. 
Pr.  416. 

*  Buffalo  Sav.  Bank  v.  Newton, 
23  N.  Y.  160  (1861);   AVakeman  v. 


Price,  3  N.  Y.  334  (1850) ;  Hazleton 
V.  Wakeman,  3  How.  (N.  Y.)  Pr. 
357  (1848) ;  McReynolds  v.  Munns, 
2  Keyes  (N.  Y.)  214  (1865).  See 
Peck  v.  New  York  &  N.  J.  R.  Co., 
85  N.  Y.  246  (1881);  Goodell  v. 
Harrington,  76  N.  Y.  547  (1879); 
Hale  V.  Clauson,  60  N.  Y.  339 
(1875);  Crane  v.  Stiger,  58  N.  Y. 
625  (1874);  Dows  v.  Congdon,  28 
N.  Y.  122  (1863).  In  King  v.  Piatt, 
2  Abb.  App.  Dec.  (N.  Y.)  527 
(1867),  it  is  said  that  an  appeal 
may  be  taken  to  the  court  of  appeals 
from  an  order  of  the  general  term, 
affirming  an  order  of  the  special 
term  denying  a  motion  to  set  aside  a 
judicial  sale  made  under  a  judgment; 
that  such  an  order  is  final  and  affects 
a  substantial  right;  and  that  it  is  an 
order  made  upon  a  summary  appli- 
cation in  an  action  after  judgment ; 
that  such  an  order  is  not  purely 
discretionjiry  with  the  court  below 
in  such  a  sense  as  to  prevent  it  from 
being  reversed. 


§  552.]         PROCEEDES^GS  01^    EE3ALE.  669 

of  the  court,  expedient  to  order  a  resale,  although  the 
alleged  fraud  may  not  be  clearly  established,  the  order  of 
the  special  term  setting  aside  a  sale  under  such  circum- 
stances will  be  reviewable  at  general  term ;  but  as  a  rule, 
when  only  the  rights  of  the  parties  to  the  action  are 
involved,  no  appeal  can  be  taken  from  the  order  granting  or 
denying  a  motion  for  a  resale.'  It  is  well  established  that 
orders  for  resales  made  upon  grounds  which  are  discretion- 
ary, will  not  be  reviewed  by  the  court  of  appeals  ;*  but  it  is 
thought  that  where  orders  granting  or  refusing  resales 
i  nolve  matters  of  legal  right,  they  may  be  reviewed  in  the 
court  of  appeals,  the  same  as  if  presented  upon  exceptions.* 

§  552.  Proceedings  on  resale. — Where  a  sale  in  a  mort- 
gage foreclosure  is  set  aside  and  a  resale  is  ordered,  the 
proceedings  upon  the  resale  will  be  the  same  as  those  upon 
the  original  sale.*  The  proceedings  should  be  commenced 
de  novo,  as  though  the  first  sale  had  never  taken  place. 


»  Fisher  v.  Hersey,  78  N.  Y.  387  (1837) ;  Rowley  v.  VanBenthuysen, 

(1879).  16  Wend.  (N.  Y.)  370  (1836). 

«  HoweU  V.  Mills,  53  N.  Y.  323,  »  See  Howell  v.  Mills,  53  K  Y. 

331  (1873).     See  Dows  v.  Congdoa,  323  (1873). 

28  N.  Y.  123  (1863) ;  Wakeman  v,  *  3  Wait's  Pr.  378.     See  William- 
Price,  3  N.  Y.  334  (1850) ;  Candee  son  v.  Dale,  3  Johns.  Ch.  (N.  Y.) 
V.  Lord,  2  N.  Y.  269  (1849)  ;  Rogers  290(1818). 
V.   Holly,   18  Wend.   (N.    Y.)    350 


CHAPTER  XXVIL 


CONFIRMING  SALE  AND  ENFORCING  PURCHASE. 


CONFIRMATION    OF   SALE— ENFORCING   BID   AGAINST   PURCHASER  — 

DEFECTS    IN   TITLE— MARKETABLE   TITLE— WHEN   PURCHASER 

WILL  BE  EXCUSED  FROM  COMPLETING  PURCHASE. 


553.  Every  foreclosure  sale  must 

be  confirmed. 

554.  Practice  of  confirming  sales 

in  New  York. 

555.  Notice   and  application    for 

confirmation  —  Objections 
to  and  corrections  of  ref- 
eree's report. 
656.  Effect  of  confirmation  of 
sale — Lapse  of  time  equiva- 
lent to  confirmation. 

557.  Setting  aside  confirmation  of 

sale  —  Discretion    of    the 
court. 

558.  Enforcing  sale  against  pur- 

chaser. 

559.  Proceedings  where  purchaser 

refuses  or  neglects  to  com- 
plete his  purchase. 

560.  Enforcing  sale  by  attachment 

against  purchaser. 

561.  When  bidder  will  be  excused 

from  completing  his  pur- 
chase. 

562.  Defects  of  title  unknown  to 

purchaser  at  time  of  sale. 


§  563.  Defects  of  title  existing  prior 
to  the  mortgage  under  fore- 
closure. 

564.  When   purchaser    presumed 

to  know  condition  of  title. 

565.  Irregularities  prior  to  judg- 

ment excusing  purchaser. 

566.  Enforcement     of     purchase 

where     there    are    lunatic 
defendants. 

567.  Enforcement     of     purchase 

where    there     are     infant 
defendants. 

568.  Formal  irregularities  no  ex- 

cuse to  purchaser. 

569.  Reference  to  investigate  title. 

570.  Purchaser  entitled  to  market- 

able title. 

571.  Partial  failure  of  title  will 

excuse  purchaser. 

573.  Rights  of  assignee  of  pur- 
chaser's bid. 

573.  Right  of  bidder  to  have  sale 
completed. 


§  553.    Every  foreclosure  sale  must  be  confirmed. — It 

is  a  general  rule  in  this  country,*  as  well  as  in  England,'  that 
a  sale  made  under  a  decree  of  foreclosure,  is  not  complete 


»  See  Wells  v.  Rice,  34  Ark.  346 
(1879) ;  Dills  v.  Jasper,  38  HI.  263 
(1864) ;  Allen  v.  Poole,  54  Miss.  323 
(1877) ;  Gowan  v.  Jones,  18  Miss. 
(10  Smed.  &  M.)  168  (1848) ;  Tooley 
V.  Gridley.  11  Miss.  (8  Smed  &  M.) 
514  (1844) ;  s.  c.  41  Am.  Dec.  628  ; 
Hay's  Appeal,  51  Pa.  St.  61  (1865) ; 


Allen  V.  Elderkin,  63  Wis.  637 
(1885) ;  Welp  v.  Gunther,  48  Wis. 
543  (1880) ;  Woehler  v.  Endter,  46 
Wis.  301  (1879). 

» Twigg  V.  Fifleld,  13  Ves.  617 
(1807).  In  re  Minor,  11  Yes.  659 
(1805). 


670 


§  554J  CONFrRMING   SALE.  671 

until  it  has  been  confirmed  by  the  court.'  At  such  a  sale 
the  bidder  merely  agrees  to  purchase  the  property,  pro- 
vided the  sale  shall  be  approved  by  the  court ;'  and  until 
the  sale  is  reported  to  and  confirmed  by  the  court,  it  will  be 
incomplete,  and  the  bidder  will  be  under  no  obligation  to 
accept  the  deed  of  the  oflScer  conducting  the  sale.* 

The  acceptance  of  the  bid  confers  no  title  on  the  pur- 
chaser,— not  even  an  absolute  right  to  have  the  purchase 
completed.  The  bidder  is  nothing  more  than  a  preferred  pur- 
chaser, or  proposer  for  the  purchase,  subject  to  the  approval 
of  the  court.*  It  seems,  however,  where  the  purchaser 
enters  into  possession  under  a  deed  of  the  oflficer  making  the 
sale,  that  continued  possession  thereunder  will  be  equiva- 
lent to  a  confirmation  of  the  sale  by  the  court.* 

In  Illinois  a  somewhat  different  doctrine  prevails.  It  was 
held  in  the  case  of  Jackson  v.  Warren,*  that  on  a  sale  of 
mortgaged  premises  under  a  decree  of  foreclosure,  a  valid 
and  binding  contract  is  made  when  the  hammer  falls  ;  that 
in  the  absence  of  fraud,  mistake  or  some  irregularity,  the 
bidder  is  entitled  to  a  deed  on  the  payment  of  the  purchase 
money  ;  and  that  a  person  holding  such  a  deed  is  prima 
facie  the  legal  owner  of  the  premises.  This  is  also  the  doc- 
trine and  the  practice  in  New  York. 

§  554.    Practice  of  confirming  sales  in  New  York. — 

Under  the  present  practice  in  New  York,  and  in  some  other 
slates,  if  the  proceedings  in  an  action  for  foreclosure  have 


*  Formerly  in  Wisconsin,  however,  (1864) ;  Young  v.  Keogh,  11  111.  642 

the  purchaser  was  entitled  to  posses-  (1850) ;  Mills  v.   Ralston,   10  Kan. 

8ion  on  producing  the  deed  of  the  206  (1872) ;  Busey  v.  Hardin,  2  B. 

officer  making  the  sale.    See  Loomis  Mon.   (Ky.)  407  (1842);  Allen  v. 

V.  Wheeler,  18  Wis.  524  (1864).  Poole,  54  Miss.  323  (1877);  Go  wan  v. 

»  Dills  V.  Jasper,  33  111.  272  (1864);  Jones,  18  Miss.  (10  Smed.  &  M.)  164 

Blossom  V.  Milwaukee  &  C.  R.  Co..  (1848) ;  Tooley  v.  Gridley,  11  Miss. 

70  U.  S.  (3  WaU.)  196  (1865) ;  bk.  18  (1848);  (3  Smed.  & M.) 493  (1844);  s.  c. 

L.  ed.  43.  41  Am.  Dec.  628;  Blossom  v.  Milwau- 

8  See  Dills  v.  Jasper,  33  111.  272  kee  &  C.  R.  Co.,  70  U.  S.  (3  Wall.) 

(1864) ;   Martin  v.  Kelly,  59  Miss.  196  (1865) ;  bk.  18  L.  ed.  43. 

652(1882).  ^Gowan  v.   Jones,   18  Miss.   (10 

<  See  Wells  v.  Rice,  34  Ark.  346  Smed.  &  M.)  164  (1848). 

(1879) ;  Dills  v.  Jasper,  33  111.  262  «  32  HI.  331  (1863). 


672  CONFLRMING    SALES    IN    NEW    TORK.  [§  555. 

^een  regular,  the  title  to  the  property  passes  to  the  pur- 
chaser upon  the  delivery  of  the  usual  referee's  deed,'  and 
the  purchaser  will  be  entitled  to  possession  of  the  premises 
on  the  production  of  such  deed.*  A  formal  confirmation  of 
the  sale  is  not  required,  a  supreme  court  rule*  providing 
that  the  report  of  the  referee  shall  become  absolute,  and 
stand  as  in  all  things  confirmed,  unless  exceptions  thereto 
are  filed  and  served  within  eight  days  after  service  of  notice 
of  the  filing  of  said  report,* 

§  555'  Notice  and  application  for  confirmation— Objec- 
tions to  and  corrections  of  referee's  report. — In  some  states 
a  confirmation  of  the  sale  in  mortgage  foreclosure  proceed- 
ings can  be  regularly  made  only  after  notice  to  the  parties 
adversely  interested,  in  order  that  they  may  show  cause 
against  it.*  On  an  application  for  the  confirmation  of  a 
referee's  report  of  sale,  the  court  should  be  satisfied  that  the 
sale  was  made  in  accordance  with  the  requirements  of 
the  decree  of  foreclosure.*  Where  it  appears  from  an 
examination  of  the  report  of  the  sale,  that  the  proceedings 
of  the  officer  making  it  were  in  all  respects  in  conformity 
with  the  judgment  and  the  provisions  of  the  statute,  and  no 
extrinsic  circumstances  of  equity  appear,  it  is  the  duty  of 
the  court  to  confirm  the  sale.*  The  usual  order  nisi,  provid- 
ing that  the  sale  stand  confirmed,  unless  cause  for  setting  it 
aside  be  shown  within  a  specified  time,  is  a  sufficient  order 


'  Stimson  v.  Arnold,  5  Abb.  (N.  prevailed  in  Wisconsin.     Loomis  v. 

Y.)  N.  C.  377(1878) ;  Fort  v.  Burch,  Wheeler,  18  Wis.  524  (1864). 

6  Barb.  (N.  Y.)  60  (1849) ;  Fuller  v.  »  N.  Y.  Supreme  Court  Rule  30. 

VanGeesen,  4  Hill  (N.  Y.)  171  (1843);  *  It  is  suggested  in  ISIoore  v.  Shaw, 

aff'd  1  How.  App.  Cas.  (N.  Y.)  240  15  Hun  (N.  Y.)  428  (1878),  that  it 

(1847).       Compare    Terpenning    v.  may  be  necessary  to  have  the  report 

Agricultural  Ins.    Co.,  14  Hun  (N.  confirmed,  in  order  to  perfect  the 

Y.)  299  (1878).  title  as  between  the  mortgagor  and 

2  Mitchell  V.  Bartlett,  51   N.  Y.  the  purchaser. 

447  (1873) ;   Stimson  v.    Arnold,   5  *  Branch  Bank  v.  Hunt,  8  Ala.  876 

Abb.    (N.  Y.)   N.   C.    377    (1878);  (1845). 

K    Y.    Supreme  Court  Rule    61 ;  «  Moore  v.  Titman,  33  111.  358.  366 

Brown  v.    Marzyck,    19    Fla.    840  (1864). 

(1883)  ;  Petty  v.  Mays,  19  Fla.  652  '  New  England  Mortgage  Security 

(1883).     The  same  doctrine  formerly  Co.   v.   Smith,    25    Kan.    G22,    624 


§  556.]  PKACTICE    ON    C02\^ilEiIING    SALES.  673 

of  confirmation  ;'  and  where  there  is  no  fraud  or  collusion, 
it  can  not  be  attacked  collaterally,*  although  it  may  be 
appealed  from.* 

Where  exceptions  are  filed  to  the  report  of  the  sale  made 
by  the  referee  under  a  decree  of  foreclosure,  it  is  not  good 
practice  in  directing  the  correction  of  such  report,  to  order 
that  on  filing  the  corrected  report  the  said  sale  be  in  all 
respects  confirmed  ;  yet  such  an  order  of  confirmation  will 
not  render  the  proceedings  void.*  A  foreclosure  sale  will 
not  become  absolute,  so  long  as  objections  duly  taken  to  the 
report  of  the  referee,  or  other  officer  making  the  sale,  are  on 
file  and  undisposed  of.* 

§  556.  Effect  of  confirmation  of  sale — Lapse  of  time 
equivalent  to  confirmation. — The  report  of  a  sale  made 
under  a  decree  of  foreclosure  in  New  York,  may  be  con- 
firmed by  the  court  at  special  term.*  A  referee's  report  of 
sale  becomes  the  act  of  the  court  when  confirmed.''  It  seems 
that  the  confirmation  of  a  sale  made  under  a  foreclosure, 
cures  all  irregularities  in  the  proceedings  to  obtain  the 
decree  of  sale,  and  in  the  conduct  of  the  sale  itself ;  but  it 
will  not  make  good  a  defect  arising  from  a  want  of  jurisdic- 
tion of  the  court,  either  of  the  cause  of  action  or  of  any  of 
the  parties  interested  ;  and  in  every  instance  such  an  acci- 
dent or  mistake  as  would  generally  invalidate  a  contract, 
will  be  a  sufficient  ground  for  setting  a  sale  aside  even  after 
confirmation.* 

It  has  been  suggested  that  the  lapse  of  a  long  period  of 
time'will  be  equivalent  to  a  confirmation  by  the  court  of  a 


(1881).     See  Moore  v.  Pye,  10  Kan.  ■*  Ruggles  v.   National    Bank   of 

246(1872);    White-crow  v.    White-  Centreville,  43  Mich.  192  (1880). 

wing,  3  Kan.  276  (1865) ;  Challiss  v.  "  Howard  v.  Bond,  42  Mich.  131 

Wise,  2  Kan.  193  (1863)  ;    Koehler  (1879). 

V.  Ball,  2  Kan.  160  (1863).  «  See  Swarthout  v.  Curtis,  4  N.  Y. 

'  Torrans  v.  Hicks,  32  Mich.  307  415  (1850) ;  s.  c.  45  Am.  Dec.  345  ; 

(1875).  5  How.  (N.  Y.)  Pr.  198. 

«  Torrans  v.  Hicks,  32  ]Mich.  307  '  McGowan  v.  Newman,  4  Abb. 

<1875)  ;  McKeighan  v.  Hopkins,  14  (N.  Y.)  N.  C.  80  (1878). 

Neb.  361  (1883).  s  See  Dills  v.  Jasper,  33  111.  263 

» Koehler    v.    Ball,    2   Kan.    160  (1864). 
(1863)  ;  Detroit  F.  &  M.  Ins.  Co.  v. 
Kenz,  33  Mich.  298  (1876). 

f43) 


674  SETTING    ASIDE    COXriR:\rATION    OF    SALE.      [§  557. 

sale  made  under  a  decree  of  foreclosure,  where  the  purchaser 
has  entered  into  possession  of  the  property  under  the  deed  of 
the  ofificer  making  the  sale  ;'  so  that  even  in  those  states  where 
confirmation  by  the  court  is  required  to  complete  the  sale, 
if  a  deed  is  executed  and  delivered  without  confirmation, 
and  the  purchaser  enters  into  possession,  long  continued 
possession  under  such  deed  will  render  the  title  valid.  The 
confirmation  of  a  sale  of  mortgaged  premises  on  which  there 
are  growing  crops,  relates  back  to  the  date  of  the  sale  and 
entitles  the  purchaser  to  control  the  crops  from  that  time,  if 
no  equities  intervene,  and  if  due  notice  has  been  given  to 
interested  parties.' 

§  557.  Setting  aside  confirmation  of  sale— Discretion 
of  the  court. — It  is  discretionary  with  the  court  whether  a 
sale  of  mortgaged  premises  under  a  decree  of  foreclosure 
shall  be  set  aside  or  confirmed  ;*  and  this  power  will  be  exer- 
cised as  the  circumstances  of  the  case  and  the  interests  of  the 
parties  may  demand.  Where  an  application  is  made  for  the 
confirmation  of  a  sale,  it  must  appear  to  the  satisfaction  of 
the  court  that  the  sale  was  conducted  in  accordance  with  the 
requirements  of  the  decree,*  and  that  due  notice  of  the  sale 
was  given.*  It  must  also  appear  that  notice  of  the  application 
for  confirmation  has  been  given  to  all  parties  who  have 
appeared  in  the  action,  in  order  that  they  may  have  an 
opportunity  to  oppose  it.* 

It  has  been  held  under  the  Kansas  statute,  that  upon  an 
application  for  the  confirmation  of  a  sale  in  foreclosure  pro- 
ceedings, if  it  appears  that  the  proceedings  of  the  officer  have, 
in  all  respects,  been  in  conformity  with  the  decree  of  the 
court  and  the  provisions  of  the  statute,  and  that  there  are  no 


»  See  G«>wan  v.   Jones,   18  Miss.  *  Moore  v.  Titraan,  33  Dl.  358,  366 

(10  Smed.  &  M.)  164  (1848).  (1864). 

•  Ruggles  V.  First  Nat.  Bank  of  *  Perrien  v.  Fetters,  35  Mich.  233 

Centreville,  43  Mich.  192  (1880).  (1876). 

«  Goodell  V.  Harrington,  76  N.  Y.  «  Branch  Bank  v.  Hunt,   8  Ala. 

647  (1879) ;  Hale  v.  Clawson,  60  N.  876  (1845) ;  Williamson  v.  Berry,  49 

Y.  339  (1875) ;   Crane  v.  Stiger,  58  U.  S.  (8  How.)  495,  546  (1850) ;  bk. 

N.  Y.  625  (1874) ;  Buffalo  Savings  12  L.  ed.  1170. 
Bank   v.   Newton,   23    N.   Y.   160 
(1861).     See  ante  chap.  xxvi. 


§  558.] 


ENTORCING    SALE   AGAINST    BIDDER.  675 


extrinsic  circumstances  of  an  equitable  character  requiring 
the  interference  of  the  court,  the  sale  should  be  confirmed ;' 
and  that  the  court  has  no  right  against  sound  discretion  to 
release  the  purchaser  from  his  bid  or  to  permit  a  tender  to  be 
made  by  the  mortgagor  after  the  sale.* 

§  558.  Enforcing  sale  against  purchaser. — Where  there 
is  no  defect  in  the  title  to  property  sold  under  a  decree  of 
foreclosure,  if  the  purchaser  refuses  or  neglects  to  pay  the 
purchase  money  and  to  take  the  title,  or  otherwise  to  comply 
with  the  terms  of  sale,  he  may  be  compelled  to  do  so  by  an 
order  of  the  court,  for  the  purchaser  at  a  foreclosure  sale 
becomes  a  quasi  party  to  the  suit,  and  subjects  himself  to 
the  jurisdiction  of  the  court,  so  far  as  the  completion  of  the 
sale  is  concerned.* 

In  a  case  where  the  judgment  of  sale  was  in  the  ordinary 
form,  making  no  reference,  however,  to  contingent  outstand- 
ing interests,  but  a  notice  thereof  was  given  at  the  sale, 
which  was  made  subject  to  such  interests,  it  was  held  that 
an  order  compelling  the  purchaser  to  complete  such  pur- 
chase was  proper  ;  that  an  amendment  of  the  judgment  was 
not  necessary,  inasmuch  as  it  furnished  adequate  authority 
for  the  sale  of  the  property  covered  by  the  mortgage ;  and 
that  no  wrong  was  done  to  the  purchaser  in  compelling  him 
to  pay  for  exactly  what  he  bought.* 

The  fact  that  the  party  making  the  purchase  acted  merely 
as  the  agent  of  another  person,  will  not  relieve  him  from  lia- 
bility, if  he  made  the  bid  in  his  own  name.*    By  becoming  a 


«  New  England  Mortgage  Security  Paige  Ch.  (N.  Y.)  339  (1831);  Coulter 

Ck),  V.  Smith,  25  Kan.  623  (1881) ;  v.    Henderson,   27    Miss.   685,   689 

lloore  V.   Pye,   10   Kan.   246,   250  (1854);   Ogilvle  v.   Richardson,   14 

(1872) ;  Challiss  v.  Wise,  2Kau.  193  Wis.  157  (1861) ;   Wood  v.  Mann,  3 

(1863).  Sunin.  C.  C.  318  (1838) ;  Casamajor 

«  New  England  Mortgage  Security  v.  Strole,  1  Sim.  &  S.  381  (1823) ; 

Co.    V.  Smith,  25  Kan.  622  (1881).  Lansdown  v.  Elderton,  14  Ves.  513 

«  Cazet  V.  Hubbell,  36  N.  Y.  677  (1808). 
(1867).     See  Miller  v,  Collyer,  36         *  Cromwell  v.  Hull,  97  N.  Y.  209 

Barb.  (N.  Y.)  250  (1863) ;   Graliam  (1884). 

V.  Bleakie,  2  Daly  (N.  Y.)  55  (1866);  »  Ogilvle  v.  Richardson,  14  Wis. 

Brasher  v.  Cortlandt,  2  Johns.  Ch.  157  (1861). 
(N.  Y.)  605  (1817)  ;  Requa  v.  Rea,  3 


676  BIDDER    REFUSING    TO    COMPLETE   SALE.       [§  559. 

purchaser  at  a  foreclosure  sale,  the  bidder  subjects  himself  to 
the  jurisdiction  of  the  court  and  may  be  compelled  to  com- 
ply with  the  conditions  of  the  sale  ;  and  neither  mere  lapse 
of  time  nor  the  death  of  one  of  the  parties  will  be  a  bar  to 
such  relief,  if  the  purchaser  has  taken  possession  of  the 
premises.'  In  some  states,  before  a  party  purchasing  at  a 
foreclosure  sale  can  be  required  to  complete  his  purchase, 
he  must  be  accepted  as  a  purchaser  by  the  court  and  the  sale 
must  be  confirmed.* 

The  proper  tribunal  to  enforce  the  purchaser's  undertakings 
to  complete  his  purchase,  is  the  court  which  made  the  decree 
of  sale.'  The  application  for  that  purpose  may  be  made  by 
motion.  Where  the  purchaser  neglects  to  comply  with  the 
terms  of  the  sale  within  a  reasonable  time,  the  court  will  not 
give  him  the  benefit  of  his  purchase  if  a  resale  will  be  more 
beneficial  to  the  parties  ;*  neither  will  the  court  compel  him 
to  take  the  title  where  the  parties  to  the  action  have  delayed 
the  completion  of  the  sale  so  long  that  he  will  lose  the 
benefit  of  his  purchase.* 

§  559-  Proceedings  where  purchaser  refuses  or  neg- 
lects to  complete  his  purchase. — Where  the  purchaser  at 
a  mortgage  foreclosure  sale  neglects  or  refuses  to  complete 
his  contract  according  to  the  terms  of  sale,  a  resale  may  be 
ordered,  in  which  case  such  purchaser  will  be  liable  for  the 
costs  of  such  resale,  and  for  the  deficiency,  if  any.'  Where  a 
resale  is  ordered  on  refusal  of  the  purchaser  to  complete  his 
contract  because  of  irregularities  in  the  foreclosure,  he  will 
not  be  charged  with  the  expenses  of  correcting  such  irregu- 
larities." 


»  Cazet  V.  HubbeU,  36  N.  Y.  677  chants'  Bank  v.  Thomson,  55  N.  Y. 

(1867).     See    Merchants'    Bank    v.  7(1873). 

Thomson,  55  N.  Y.  7  (1873).  «  Riggs  v.  Pursell,  74  N.  Y.  370 

«  Schaefer  v.  O'Brien,  49  Md.  253  (1878)^  Miller  v.  Collyer,  36  Barb. 

(1878).  (  N.  Y. )  250  ( 1862 )  ;    Graham  v. 

» See  "Wood  v.  Mann,  3  Sumn.  C.  Bleakie,  2  Daly  (N.  Y.)  55  (1866) ; 

C.  318  (1838).  Wood  v.  Mann,  3  Sumn.  C.  C.  318 

*  Jackson  v.  Edwards,  7  Paige  Ch.  (1838). 

(N.  Y.)  386  (1839).  i  Knight  v.  Moloney,  4  Hun  (N. 

*  Jackson    v.    Edwards.  7  Paige  Y.)  33  (1875). 
Ch.  (N.  Y.)  386  (1839).     See  Mer- 


§  560.]  ATTACHMENT   AGATN-ST   PUKCHASEK.  677 

A  resale  ordered  in  such  a  case  should  be  upon  the  same 
terms  upon  which  the  first  sale  was  made  ;  and  where  the  terms 
of  the  resale  differ  materially  from  those  of  the  first  sale,  the 
purchaser  at  the  first  sale  will  be  relieved  from  all  liability 
for  any  deficiency  on  the  second  sale.*  A  purchaser  who 
neglects  to  complete  his  contract,  or  who  wrongfully  refuses  to 
do  so,  will  be  chargeable  with  the  taxes  imposed  subsequently 
to  his  refusal  to  complete  the  purchase  and  before  the  resale, 
such  taxes  being  within  the  spirit  and  the  letter  of  the  contract 
which  throws  upon  such  purchaser  the  "  difference  in  costs 
and  expenses  on  the  resale,"  because  such  additional  taxes 
are  legitimately  a  part  of  the  difference  between  the  sums 
realized.* 

§  560.  Enforcing  sale  by  attachment  against  pur- 
chaser.— Where  the  purchaser  is  responsible,  the  court  may 
summarily  order  him  to  complete  his  purchase  ;  and  on  his 
neglect  or  refusal  so  to  do,  it  may  issue  an  attachment 
against  his  person  on  motion  in  the  action  in  which  the 
decree  of  sale  was  granted.*  This  is  the  proper  practice 
where  there  is  reason  to  believe  that  the  purchaser  is  acting 
in  collusion  with  the  mortgagor  to  hinder  or  prevent  the 
sale.* 

The  fact  that  the  plaintiff  is  entitled  to  have  the  property 
resold  on  failure  of  the  purchaser  to  complete  the  pur- 
chase, or  that  he  may  bring  an  action  against  the  purchaser 
for  damages,  will  not  deprive  the  court  of  the  right  to 
enforce  the  performance  of  the  terms  of  sale  by  attach- 
ment ;   and  while   there   is  an  option  as  to  remedy,  such 


>  Riggs  V.  PurseU,  74  N.  Y.  370  qua  v.  Rea,  2  Paige  Ch.  (N.  Y.)  339 

(1878).  (1831) ;  Andersen  v.  Foulke.  2  Harr. 

»  Ruhe  V.  Law,  8  Him  (N.  Y.)  251  &  G.  (Md.)  346  (1828) ;  Richardson 

(1876).     See  also  Chase  v.  Chase,  15  v.  Jones,  3  Gill.    <fc  J.    (Md.)  163 

Abb.  (N.  Y.)  K  C.  91  (1884).  (1831);   s.   c.   22    Am.    Dec.    393; 

»  Merchants'  Bank  v.   Thomson,  Wood  v.  Mann,  3  Sumn.  C.  C.  318 

65  N.  Y.  7  (1873) ;  Cazet  v.  Hubbell,  (1838) ;   Lansdown  v.  Elderton,   14 

86  N.  Y.  677  (1867) ;,  Miller  v.  Coll-  Ves.  512  (1808)  ;  Savile  v.  Savile,  1 

yer,   36  Barb.  (N.   Y.)  250  (1862) ;  P.  Wms.  745  (1721). 
Graham  v.  Bleakie,  2  Daly  (N.  Y.)         *  Graham  v.  Bleakie,  2  Daly  (N. 

65  (1866)  ;  Brasher  v.   Cortlandt,  2  Y.)  55,  60  (1866). 
Johns.  Ch.  (N.  Y.)  505  (1817) ;  Re 


678  WHEN    BIDDER   EXCUSED.  [§561, 

option  lies  with  the  court  or  with  the  mortgagee,  and 
not  with  the  purchaser.'  And  it  has  ever  been  held,  where 
the  purchaser  has  made  the  cash  payment  required  and 
given  a  bond  or  other  security  for  the  deferred  payments, 
and  the  sale  has  been  confirmed  by  the  court,  that  upon  the 
failure  of  the  purchaser  to  pay  the  bond,  he  may  be  required 
to  show  cause  why  the  land  should  not  be  resold  for  the 
payment  of  the  purchase  money  ;  and  upon  the  return  of 
such  order  a  decree  may  be  made  for  the  sale  of  the  land.' 

§  561.  When  bidder  will  be  excused  from  completing 
his  purchase. — It  is  a  well  established  rule  that  a  purchaser 
at  a  foreclosure  sale  will  not  be  compelled  to  accept  a  doubt- 
ful title,*  or  a  mere  equitable  estate.*  The  court  will  not 
compel  him  to  take  a  title  which  may  expose  him  to  a  suit 
either  at  law  or  in  equity.*  A  marketable  title  must  be 
offered  to  him.  Consequently,  if  there  is  a  defect  in  the 
title  which  can  not  be  remedied,  or  if  there  is  a  well-founded 
doubt  as  to  the  validity  of  the  title,  the  court  will  not  require 
a  purchaser  to  complete  his  purchase.*     But  if  the  defects  in 


'  Wood  V.  Mann,  3  Sumn.  C.  C.  Wright.  3  Harr.  &  McH.  (Md.)  326 

318  (1838).     See  Cazet  v.  Hubbell,  (1793) ;  Butler  v.  O'Hear.  1  Desaus. 

36  N.  Y.  677  (1867).  (S.  C.)  Eq.  382  (1794)  ;  8.  c.  1  Am. 

"Clarksonv.  Read,  ISGratt.  (Ya.)  Dec.    671;     Thompson  v.   Tod,   1 

288  (1859).     But  see  Richardson  v.  Pet.  C.  C.  380  (1817) ;  Stapylton  v. 

Jones.  3  Gill.  &  J.  (Md.)  163  ;   s.  c.  Scott,  16  Ves.  272  (1809) ;  Shapland 

22  Am.  Dec.  393.  decided  in  1831,  v.  Smith,  1  Bro.  C.  C.  75  (1780) ; 
where  it  was  held  that  when  a  bond  Cooper  v.  Denne,  1  Ves.  Jr.  565 
has  been  given  and  the  sale  confirm-  (1792) ;  s.  c.  4  Bro.  C.  C.  80  ;  Lowes 
ed,  the  purchaser  and  his  sureties  can  v.  Lush.  14  Ves.  547  (1808) ;  Frank- 
not  be  compelled  to  pay  the  bond  in  a  lin  v.  Brownlow,  14  Ves.  550  (1808). 
summary  way  under  an  order  by  the  *  Abel  v.  Heathcote,  2  Ves.  Jr. 
court  of  chancery.     The  court  held  98  (1793). 

the  bond  to  be  a  legal  contract  to  be  '  Morris  v.  Mowatt,  2  Paige  Ch. 

enforced  in  an  action  at  law.  (N.  Y.)  586  (1831) ;  8.  c.  22  Am  Dec. 

*  See  Beckenbaugh  v.   Nally,  32  661  ;  Cooper  v.  Dennie,  1  Ves.  Jr. 

Hun  (N.  Y.)  160  (1884) ;    Piser  v.  565  (1792) ;  s.  c.  4  Bro.  C.  C.  80,  86. 

Lockwood,  30  Hun  (N.  Y.)  6  (1883);  «  Seymour    v.    DeLancy,    Hopk. 

Lockman  v.  Reilley,  29  Hun  (N.  Y.)  Ch.  (N.  Y.)  436  (1824)  ;  s.  c.  16  Am. 

434    (1882);    Morris    v,   Mowatt,   2  Dec.    552;     Morris    v.    Mowatt.    2 

Paige  Ch.  (N.  Y.)  586  (1881) ;  s.  c.  Paige  Ch.  (N.  Y.)  586  (1831) ;  8.  c. 

23  Am.  Dec.  661  ;  Turner  v.  Clay,  22  Am.  Dec.  661 ;  Jackson  v.  Ed- 
3  Bibb  (Ky.)  52  (1813) ;  Perkins  V.  wards.  23  Wend.  (N.  Y.)  498,  509 


§  561.]       BIDDER   EXCUSED    FROM   TAKLN'G   TITLE.  679 

the  title  can  be  corrected,  and  the  purchaser  is  tendered  a 
confirmatory  deed  which  remedies  such  defects,  he  can  not 
refuse  to  accept  the  title.' 

The  purchaser  at  a  foreclosure  sale  can  not  be  compelled 
to  complete  his  purchase,  if  the  court  had  no  jurisdiction 
of  the  subject  matter  of  the  action,  or  the  proceedings  are  for 
any  reason  void,  or  a  necessary  defendant  has  not  been 
properly  served  with  the  summons.'  Where  by  the  terms  of  a 
sale  under  a  decree  of  foreclosure  the  property  was  to  be  sold 
free  from  all  incumbrances,  and  all  taxes  and  assessments 
were  to  be  paid  out  of  the  purchase  money,  but  it  afterwards 
appeared  that  an  assessment  for  a  large  amount  against  the 
property  for  opening  and  macadamizing  an  avenue  through 
the  premises  had  not  in  fact  been  confirmed  by  the  city  at  the 
time  of  the  sale,  although  the  work  had  been  completed 
more  than  three  years  before  the  sale ;  it  was  held  that  the 
purchasers  at  the  sale,  who  had  bid  off  the  property  under 
the  belief  that  such  assessment  had  been  confirmed,  and 
that  they  would  receive  their  lots  discharged  of  the  expenses 
thereof,  were  not  bound  to  take  the  property  subject  to  the 
assessment  for  such  improvements.' 

And  it  has  been  held  that  where  land  is  sold  by  a  referee 
under  a  decree  of  foreclosure,  the  court  will  not  require  the 
purchaser  to  complete  the  purchase  unless  he  will  obtain 
such  an  interest  in  the  premises  and  in  the  buildings  thereon, 
as  he  had  a  right  to  expect  from  the  terms  of  the  sale.* 

It  is  said  to  be  the  correct  practice  in  Illinois  for  the 
officer  exposing  the  property  for  sale  to  report  the  largest 
bid  to  the  court  for  its  approval,  and  that  although  the  bid 


(1839).  See  Graham  v.  Bleakie,  2  Daly  (1877),  reversing  9  Hun  (N.  Y.)  150; 

(N.  Y.)  55  (1866) ;  Banister  v.  Way,  Cook  v.  Farren,  34  Barb.  (N.  Y.)  95 

Dick.  686  (1787) ;  Harding  v.  Hard-  (1861) ;  B.   c.   21  How.   (N.  Y.)  Pr. 

ing,    4    Myl.    &    C.    514   ( 1839 )  ;  286  ;  12  Abb.  (N.  Y.)  Pr.  359.     See 

Saunders  v.  Grey,  4  Myl.  &  C.  515  Alexander  v.  Greenwood,  24  Cal.  505 

(1811)  :  Tanner  v.  Radford,  4  Myl.  (1864) ;  McKernan  v.  Neff,  43  Ind. 

&  C.  518  (1834) ;  Hodder  v.  Ruffin,  503  (1873). 

1  Ves.  «&  B.  544  (1813).  a  Post  v.  Leet,  8  Paige  Ch.  (N.  Y.) 

'  Graham  v.  Bleakie,  2  Daly  (N.  337  (1840). 

Y.)  55  (1866).  *  Seaman  v.  Hicks,  8  Paige  Ch. 

«  Yerdin  v.  Slocum,  71  N.  Y.  345  (N.  Y.)  655  (1841). 


680  UIs^KNOWK  DEFECTS  OF  'JTILE  AS  EXCUSE.     [§562 

may  have  been  accepted  by  the  officer  making  the  sale,  yet  a 
resale  of  the  property  and  the  approval  by  the  court  of 
such  resale  will  operate  as  a  rejection  of  the  first  bid,  and 
end  the  liability  of  the  bidder.' 

§  562.  Defects  of  title  unknown  to  purchaser  at  time 
of  sale. — When  there  is  a  defect  in  the  title  to  the  premises, 
which  is  unknown  to  the  purchaser  at  the  time  of  the  sale, 
he  will  not  ordinarily  be  compelled  to  complete  the  pur- 
chase." An  outstanding  inchoate  right  of  dower  in  the  prem- 
ises is  such  a  defect  as  will  excuse  a  purchaser  from  com- 
pleting the  sale.*  So  also  is  a  prior  mortgage  or  other 
lien  or  charge  upon  the  premises.*  When  a  purchaser  is 
discharged  from  all  liability  to  complete  his  purchase, 
because  of  defects  in  the  title  of  which  he  had  no  knowledge 
at  the  time  of  the  sale,  he  will  be  entitled  to  be  re-imbursed 
for  all  proper  disbursements  connected  with  his  purchase, 
which  include  the  deposit  made  by  him  at  the  time  of  his 
purchase,  with  interest  from  the  time  it  was  made,  and  the 
expenses  of  examining  the  title,  together  with  the  costs 
of  the  motion  for  repayment,  if  he  was  put  to  such 
costs.' 

This  payment  is  to  be  made  out  of  the  funds  of  the  case,  if 
there  are  any.*  If  there  are  no  funds  of  the  case  in  court,  the 
plaintiff  will  be  ordered  to  pay  the  purchaser  the  amount  of 
such  disbursements ;'  he  may  also  recover  the  amount 
thereof  in  a  direct  suit  or  upon  a  resale.'  It  has  been  said 
that  this  doctrine  rests  upon  the  ground  suggested  by  Lord 


»Dms    V.    Jasper,    33    111.     262  Y.)  Pr.  243;   Seaman  v.  Hicks,  8 

(1864).  Paige  Ch.  (N.  Y.)  655  (1841). 

»  Fryer  v.  Rockefeller,  63  N.  Y.  ^  Raynor  v.  Selmes,  52  N.  Y.  579 

268   (1875) ;     Merchants'    Bank    v.  (1873) ;   Morris  v,  Mowatt,  2  Paige 

Thomson,  55  N.  Y.  7  (1873).  Ch.  (N.  Y.)  586,  593  (1831) ;  B.  C.  22 

8  Simar  v.  Canaday,  53  N.  Y.  298  Am.  Dec.  661. 

(1873);    8.    c.    13   Am.    Rep.    523;  «  Reynolds  v.  Blake,  2  Sim.  «fc  S. 

Mills  V.  VanVoorhies,  20  N.  Y.  412  117    ( 1824 ) ;    Attorney-Genesal    v. 

(1859) ;  Shiveley's  Admrs.  v.  Jones,  Kewark,  8  Sim.  71  (1836). 

6  B.  Mon.  (Ky.)  274  (1845) ;  Fitts  v.  '  Smith  v.  Nelson,  2  Sim.  &  S. 

Hoitt,  17  N.  H.  530  (1845).  557  (1826). 

*  Hirsch  v.    Livingstone,    3  Hun  *  Berry  v.   Johnson,  2  Younge  <fe 

(N.  Y.)  9  (1874) ;  s.  c.  48  How.  (N.  Coll.  564  (1837). 


§§  563-564.]  UNKNOWN  detects  of  title.  681 

Eldon  in  Lechmere  v.  Brasier,'  that  the  suitor  must  pay  for 
the  mistakes  of  the  court.'  But  when  a  defect  in  the  pro- 
ceedings results  from  the  plaintiff's  negligence  in  omitting 
to  make  all  persons  interested  in  the  mortgaged  property- 
parties  to  the  suit,  such  expenses  can  not  be  deducted  from 
the  surplus  money  arising  from  a  second  sale,  but  must  be 
paid  by  the  party  at  fault." 

§  563.  Defects  of  title  existing  prior  to  the  mortgage 
under  foreclosure. — A  purchaser  at  a  sale  under  a  decree  of 
foreclosure  will  not  be  relieved  from  his  bid  on  account 
of  defects  in  the  title  to  the  property,  of  which  he  had  notice 
at  the  time  of  such  sale  ;  and  the  court  will  not  permit  him  to 
abandon  his  bid,  if  the  title  of  which  he  had  knowledge  is 
delivered  to  him. 

In  the  case  of  Riggs  v.  Pursell,*  the  court  held  that  if 
"every  minute  and  critical  objection  to  a  judicial  sale  is 
suffered  to  prevail,  it  will  be  attended  with  much  incon- 
venience and  embarrassment.  A  purchaser  claiming  to  be 
discharged  from  his  contract,  should,  therefore,  make  out  a 
fair  and  plain  case  for  relief,  and  it  is  not  every  defect  in  the 
subject  sold,  or  variation  from  the  description,  that  will  avail 
him.  He  will  not  be  suffered  to  speculate  at  such  sales  and, 
if  he  happens  to  make  a  bad  bargain,  to  repudiate  it  or  aban- 
don his  purchase  on  some  nice  but  immaterial  objection.  If 
he  gets  substantially  what  he  bargains  for,  he  must  complete 
the  purchase  and  take  his  deed ;  and  in  some  cases  the 
court  will  compel  him  to  take  a  compensation  for  any 
deficiency;  the  court  will  weigh  the  object  and  inducement 
of  the  purchaser,  and  looking  to  the  merits  and  substantial 
justice  of  each  case,  if  the  sale  be  fair,  relieve  or  not  from 
the  purchase  according  as  the  character  of  the  transaction 
and  circumstances  may  appear  to  require."* 

§  564.  When  purchaser  presumed  to  know  condition 
of  title. — A  purchaser  buys  the  title  of  the  mortgagor  as 


'  2  Jac.  &  W.  287  (1821).  *  66  N.  Y.  193  (1876). 

«  See  Raynor  v.  Selmes,  52  N.  Y.  *  See  King  v.  Bardeau,  6  Johns, 

679  (1873).  Ch.  (N.  Y.)  38  (1822) ;  8.  c.  10  Am. 

»  Raynor  v.  Selmes,  52  N.  Y.  579  Dec.    312  ;    Weems   v.    Brewer.   2 

(1873),  reversing  s.  c.  7  Lans.  440.  Harr.  &  G.  (Md.)  890  (1828i. 


652  PUKOHASEK   PKlfiSUMED    TO    KNOW    TITLE.     [§564. 

it  existed  at  the  time  of  the  execution  of  the  mortgage,  and 
nothing  more ;  and,  since  the  foreclosure  cuts  off  only  the 
equity  of  redemption,  the  purchaser  acquires  only  the  title 
of  the  mortgagee  and  the  mortgagor  at  the  time  of  the  execu- 
tion of  the  mortgage.  The  purchaser  takes  the  risk  as  to  all 
claims  affecting  the  title  to  the  property  which  existed  prior 
to  the  execution  of  the  mortgage  under  foreclosure,' 

Where  a  mortgage  purports  to  cover  an  estate  in  fee, 
while  in  fact  it  covers  only  a  leasehold  interest,  and  the 
judgment,  following  the  terms  of  the  mortgage,  erroneously 
directs  a  sale  of  the  fee  title,  the  purchaser  will  be  held 
bound  by  such  sale,  if  he  had  notice  of  the  leasehold  title  of 
the  mortgagor  at  the  time  of  the  sale,  because  the  sale 
under  the  judgment  of  foreclosure  can  transfer  only  the 
title  which  the  mortgagor  had.* 

The  purchaser  at  a  foreclosure  sale  is  presumed  to  know 
the  condition  of  the  title  on  which  he  bids.  Where  a 
mortgage,  which  contains  no  covenant  of  warranty,  is  fore- 
closed, and  the  relation  of  mortgagor  and  mortgagee  is 
extinguished  by  a  sale  of  the  mortgaged  premises,  the 
mortgagor  will  be  under  no  obligation  to  protect  the  title  of 
the  purchaser;  nor  will  he  be  precluded  from  subsequently 
acquiring  an  outstanding  or  paramount  title.*  The  pur- 
chaser is  chargeable  with  notice  of  all  the  defects  and 
irregularities  in  the  foreclosure  proceedings  which  appear  of 
record,  and  is  bound  to  take  notice  of  the  fact  that  a  junior 
mortgagee,  or  other  subsequent  lienholder  of  record,  was  not 
made  a  party  to  the  foreclosure,  and  that  for  that  reason  he 
has  a  right  to  redeem  from  the  sale.* 

And  where  a  purchaser  at  a  sale  under  a  decree  of  fore- 
closure has  paid  the  purchase  money  and  the  sale  has  been 


»  See  Riggs  v.  Pursell,  66  N.  Y.  U.  S.  (3  Otto),  434  (1876) ;  bk.  23  L. 

193  (1876) ;  Fryer  v.  Rockefeller,  63  ed.  964.     See  N.  T.  Code  Civ.  Proc. 

N.  Y.  268  (1875),  affirming  4  Hun  §  1632. 

(N.  Y.)  800;    Holden  v.  Sackett,  'Graham  v.  Bleakie,  2  Daly  (N. 

12  Abb.    (N.   Y.)  Pr.    473    (1861);  Y.)  55  (1866). 

Strong  V.   Waddell,    56    Ala.    471  » Jackson  v.  Littell,  56  N.  Y.  108 

(1876) ;  Boggs  V.  Fowler,  16  Cal.  559  (1874). 

(1860) ;    8.   c.   76  Am.    Dec.    561 ;  *  McKeman  r.  NefP,  43  Ind.  503 

Osta'berg  v.  Union  Trust  Co..  93  (1873).     See  Piel  v.  Baryer,  30  Ind. 


§  565.]     WHAT   lEREGXJLAKITIES   EXCUSE   BIDDEB.  6S3 

confirmed,  he  can  not  call  upon  the  mortgagee,  in  the 
absence  of  any  express  covenants  by  him,  to  return 
the  money  received  in  satisfaction  of  the  mortgage  debt,  or 
any  part  of  it,  on  the  ground  that  the  title  to  the  property 
was  defective,  and  that  he  has  been  forced  to  pay  a  large 
sum  of  money  to  perfect  it ;  his  only  remedy  will  be  on  the 
covenants  in  the  several  conveyances  preceding  the  convey- 
ance to  the  mortgagee.* 

§  565.  Irregularities  prior  to  judgment  excusing  pur- 
chaser.— When  all  persons  having  any  claim  upon  the 
property  are  made  parties  to  the  action  and  the  court  has 
jurisdiction  of  the  case,  the  purchaser  will  be  required  to 
take  the  title,  even  though  the  court  may  have  made  an 
erroneous  decision  upon  the  merits,  for  the  reason  that  no 
one  except  the  parties  to  the  action  could,  in  such  a  case, 
question  the  purchaser's  title,  and  they  are  bound  by  the 
judgment.*  Where  a  purchaser  at  a  sale  under  a  decree  of 
foreclosure  is  himself  a  party  to  the  action,  he  can  not  ques- 
tion the  regularity  of  the  decree.  If  such  a  decree  is  irregular, 
so  that  the  purchaser  can  not  obtain  a  good  title  to  the 
premises,  his  most  direct  remedy  will  be  an  application  to 
the  court  on  motion  to  have  the  decree  set  aside.* 

After  the  confirmation  of  the  sale,  errors  in  the  decree  or 
in  the  proceedings  under  it,  will  afford  no  ground  for  relief.* 
But  where  the  court  had  no  jurisdiction  of  the  action,  the 
purchaser  may  have  relief,  even  after  confirmation,  because 
of  the  defect  arising  out  of  such  want  of  jurisdiction.*  After 
a  decree  and  sale  in  a  mortgage  foreclosure,  the  validity  of 


ZSi   (1868);  Alexander  v.   Green-  «  Concklin  v.  Hall,  2  Barb.  Ch.  (N. 

wood,  24  Cal.  505  (1864),  T.)  136  (1847). 

>  McMurray    v.     Brassfield,      10  *  Daniel  v.  Leitch,  13  Gratt.  (Va.) 

Heisk.  (Tenn.)  529  (1873).  195  (1856) ;  Worsham  v.  Hardaway's 

«  DeForest  V.  Farley,  62  N.  Y.  628  Adm'r,  5  Gratt.   (Va.)  60  (1848); 

(1875) ;  Blakeley  v.  Calder,  15  N.  T.  ThrelkeWs  v.   Campbell,    2   Gratt. 

617  (1857) ;  Gaskin  v.  Anderson,  55  (Va.)  198  (1845)  ;  8.  c.  44  Am.  Dec. 

Barb.  (N.  T.)  259  (1869);   s.  c.  7  384. 

Abb.  (N.  Y.)  N.  S.  1 ;    Graham  v.  »  Boggs  v.  Hargrave,  16  Cal.  559 

Bleakie,  2  Daly  (N.  Y.)  55  (1866) ;  (1860) ;  s.  c.  76  Am.  Dec.  561. 
Ogden  V.  Walters,  12  Kan.  282  (1873); 
Milla  V.  Ralston,  10  Kan.  206  (1872). 


CS4       ENFORcma  sale — lunatic  defendants.  [§566. 

the  mortgage  can  not  be  questioned,'  for  where  the  decree  is 
valid  and  the  sale  of  the  land  and  the  execution  of  the  deed 
are  regular,  the  purchaser  at  a  foreclosure  sale  acquires  a  good 
title  to  the  premises,  although,  as  against  the  mortgagor,  the 
decree  under  which  the  sale  was  made  may  be  erroneous.* 

Where  the  order  of  sale  under  a  decree  of  foreclosure  was 
issued  without  authority,  this  irregularity  will  not  affect  the 
title  of  a  purchaser  without  notice  thereof,  if  he  has  paid  the 
purchase  money  and  received  his  deed.* 

§  566.  Enforcement  of  purchase  where  there  are 
lunatic  defendants. — A  decree  of  foreclosure,  rendered 
upon  the  personal  service  of  the  summons  in  the  action 
upon  persons  alleged  to  be  insane,*  but  against  whom  no 
proceedings  have  been  instituted  to  ascertain  their  mental 
condition,  is  neither  erroneous  nor  irregular,*  and  a  purchaser 
at  a  sale  made  pursuant  to  such  a  decree  will  not  be  excused 
from  taking  the  title,*  because  an  obligation  entered  into  by 
an  insane  person  to  secure  borrowed  money  of  which  he  has 
had  the  benefit  is  valid,  when  the  mortgagee  acted  in  good 
faith  and  without  knowledge  or  information  of  the  mental 
condition  of  the  mortgagor.* 

Thus,  it  was  held  in  Prentiss  v.  Cornell,"  that  a  purchasei 
at  a  foreclosure  sale  will  be  compelled  to  accept  the  title, 
although  two  of  the  defendants  were  lunatics  for  whom  no 
committees  had  been  appointed,  if  it  does  not  appear  from  the 
record  that  they  are  lunatics.     The  court  said  :    "Assuming 


'  Gest  V.  Flock,  2  N.  J.  Eq.  (1  H.  T.  )   424    ( 1852 ) ;    Sternbergh    v. 

"W.  Gr.)  108  (1838).  Schoolcraft,   2  Barb.   (N,   T.)    153 

«  Splahn  V.  Gillespie,  48  Ind.  397  (1848). 

(1874).  «  Prentiss  v.    Cornell,   96  N.  Y. 

»  Splahn  V.  Gillespie,  48  Ind.  397  665  (1884),  aff'g  31  Hun  (N.  Y.)  167. 

(1874).  '  Mutual  Life  Ins.  Co.  v.  Hunt,  79 

*  It  would  seem    that  the    same  N.  Y.  541  (1880),  afl'g  14  Hun  (N. 

principle  applies  also  to  those  cases  Y.)  169.     Legal  obligations  may  be 

where  persons  have  been  adjudged  to  enforced  against  lunatics  and  idiots 

be    lunatics.       See    Sternbergh    v.  whether  their  mental  capacity  has 

Schoolcraft,    2   Barb.    (N.    Y.)  153  been  judicially  determined  or  not. 

(1848);  Robertson  v.  Lain,  19  Wend.  Sanford  v.  Sanford,  63  N.  Y.  553 

(N.  Y.)  649  (1839).  (1875). 

»  Crippen  v.  Culver,  13  Barb.  (N.  «  31  Hun  (N.  Y.)  167  (1883). 


§537.]     ENFORCING    SALE INFANT    DEFENDANTS.  685 

that  these  defendants  were  non  sui  juris  at  the  commence- 
ment of  this  action,  they  were,  nevertheless,  liable  to  be 
sued.  The  mental  incapacity,  or  incompetency,  of  parties 
presents  no  interference  with  the  enforcement  of  legal 
liabilities.  The  institution  of  legal  proceedings  against 
lunatics  is  not  inhibited.  They  may  be  sued  and  actions 
may  be  maintained  against  them,  and  whether  their  insanity 
will  constitute  a  defence  depends  on  the  circumstances  of 
the  case."*  The  question  relates  solely  to  the  jurisdiction 
of  the  court  and  to  the  regularity  of  the  proceedings.  The 
personal  service  of  the  summons  and  complaint  conferred 
jurisdiction  of  these  persons  and  the  judgment  rendered  was 
held  to  be  not  even  erroneous.* 

§  567.  Enforcement  of  purchase  where  there  are 
infant  defendants. — Where,  in  an  action  brought  to  fore- 
close a  mortgage,  an  infant  defendant  was  not  served  with  the 
summons,  but  a  guardian  ad  litem,  whom  his  mother  pro- 
cured to  be  appointed  for  him,  appeared  in  the  action  and 
put  in  an  answer,  and  the  purchaser  at  the  sale  refused  to 
complete  his  purchase  because  the  infant  defendant  had  not 
been  served,  the  court  held  that  there  was  too  much  doubt 
about  the  validity  of  the  proceedings  to  warrant  an  order 
compelling  the  purchaser  to  accept  the  referee's  deed.* 

In  an  action  brought  in  New  York  to  foreclose  a  mortgage, 
one  of  the  defendants  who  owned  an  interest  in  the  premises, 
was  an  infant  under  the  age  of  fourteen  years,  residing  with 
his  mother  in  New  Jersey.  The  summons  was  not  served 
upon  him,  either  personally  or  by  publication,  but  was  per- 
sonally served  upon  his  mother  in  New  York.  The  mother, 
after  such  service  and  upon  her  own  application,  was 
appointed  guardian  ad  litem  by  order  of  the  court,  with 
authority  to  appear  and  defend.  The  infant  and  the  mother 
both  appeared  and  put  in  a  general  answer.  Upon  applica- 
tion   to    compel  a  purchaser  at  the   sale   made  under  the 


>  Sanford  v.  Sanford,  63  K  Y.  T.)  428(1852);  Sternbergh  v.  School- 

553  (1875) ;  Mutual  Life  Ins.  Co.  v.  craft,  2  Barb.  (N.  Y.)  153  (1847). 

Hunt,  14  Hun  (N.    Y.)  169  (1878);  » Ingersoll  v.    Mangam,   24  Hun 

aff'd  79  N.  Y.  541.  (N.  Y.)  202  (1881) ;  aff'd  84  N.  Y. 

•'  Crippen  v.  Culver,  13  Barb.  (N.  623. 


686  FORMAL   IRREGULARITIES   NO   EXCUSE.         [§568. 

judgment  and  decree  to  complete  his  purchase,  it  was  held 
that  the  court  had  no  jurisdiction  over  the  infant  defendant 
to  appoint  ?i  guardian  ad  lite jn,  as  such  infant  had  not  been 
made  a  party  to  the  action,  that  an  appearance  by  the 
guardian  was  not  an  appearance  by  the  infant,  that  the  judg- 
ment therefore  was  not  binding  upon  him,  that  the  sale 
under  such  judgment  did  not  convey  a  good  title,  and  that 
the  application  to  compel  the  purchaser  to  complete  his 
purchase  was  properly  denied.* 

§568.    Formal  irregularities  no 'excuse  to  purchaser. 

— In  a  mortgage  foreclosure  mere  formal  irregularities,  which 
can  not  result  in  injury  to  the  purchaser,  do  not  constitute 
sufficient  defects  to  justify  him  in  refusing  to  complete  the 
sale.  Should  he  refuse  to  accept  the  title  for  such  reasons,  so 
that  a  resale  is  ordered,  he  will  be  charged  with  the  expenses 
thereof  and  the  deficiency,  if  any.'  Thus,  on  a  mortgage 
foreclosure,  in  which  both  the  purchaser  at  the  sale  and  his 
wife  were  parties,  and  the  wife  being  an  infant,  appeared  by 
an  attorney,  and  the  purchaser,  after  having  paid  the  ten  per 
centum  required  at  the  time  of  making  his  bid,  refused  to 
complete  his  contract  on  the  ground  that  the  interest  of 
his  wife  in  the  premises  was  not  foreclosed,  it  was  held  that 
as  the  effect  of  the  conveyance  to  him  would  be  to  give  the 
wife  the  same  interest  which  would  have  been  foreclosed 
had  she  properly  appeared  in  the  action,  he  was  not  injured 
by  the  irregularity  complained  of  and  was  bound  to  com- 
plete the  purchase.* 

Where  there  are  mere  formal  irregularities  in  a  foreclosure, 
they  will  be  deemed  to  be  waived  by  a  defendant  who,  with 
full  notice  thereof,  surrenders  possession  of  the  premises  to 
the  purchaser  at  the  s?.le  for  a  valuable  consideration.* 
Where  irregularities  occur,  the  proper  remedy  is  by  an 
appeal  from  the  order  of  confirmation.  Where  a  sale  under 
a  mortgage  foreclosure  is  irregular,  because  made  during  a 


'  IngersoU  v.  Mangam,  84  N.  Y.  «  Knight  v.  Moloney,  4  Hun  (N. 

622  (1881) ;  N.  Y.  Code  Civ.  Proc.  Y.)  33  (1875). 

§  416.  •»  Trilling  v.  Schumitsch,  67  Wis. 

«  Knight  V.  Moloney,  4  Hun  (N.  186  (1886). 

Y.)  33  (1875).  \ 


§  569.]  EEFERElSrCE   TO    INVESTIGATE   TITLE.  GS7 

term  of  the  county  court  Instead  of  the  circuit  court,  as 
required  by  law,  it  does  not  operate  as  an  assignment  of  the 
mortgage  debt  Itself  to  the  purchaser,  so  that  he  can  both 
hold  the  land  and  collect  the  residue  of  the  debt  from  the 
mortgagor. 

§  569.  Reference  to  investigate  title. — Upon  the  return 
of  an  order  requiring  a  purchaser  at  a  sale  in  a  mortgage 
foreclosure  to  show  cause  why  he  should  not  complete  the 
purchase,  the  court  may  appoint  a  referee  to  ascertain 
whether  a  marketable  title  is  offered ;  and  if  it  appears  from 
the  referee's  report  that  such  a  title  is  not  offered,  or  is  of 
doubtful  validity,  the  court  will  not  compel  him  to  complete 
the  purchase."  A  purchaser  will  not  be  compelled  to 
take  a  title  where  the  proceedings  are  for  any  reason  void, 
as  where  the  court  has  not  had  jurisdiction  of  the  action,  01 
where  a  party  in  interest  has  not  been  served  with  the  sum- 
mons,' or  a  subsequent  incumbrancer  has  not  been  made  a 
party  to  the  suit.* 

Where  the  defects  in  the  title  to  the  premises  sold  can  be 
corrected,  and  releases  are  procured  within  a  reasonable  time, 
or  other  things  are  done  to  remedy  the  defects  in  the  title, 
the  purchaser  can  not  refuse  to  complete  his  purchase.*  It 
has  been  said  that  while  a  purchaser,  who  has  discovered  a 
defect  in  his  title  at  the  proper  time,  may  be  relieved  from 
his  purchase  by  asking  a  rescission  of  the  sale,  yet  he  can  not, 
while  retaining  his  bid,  ask  to  have  his  title  perfected  by  the 
application  of  the  proceeds  of  the  sale  to  the  claims  ol 
incumbrancers  not  parties  to  the  action.* 


'  Wells  V.  Lincoln  County,  80  Mo.  »  Cook  v.  Farren,  34  Barb.  (N.  Y.] 

424  (1883).  95  (1861)  ;  s.  c.  12  Abb.  (N.  Y.)  Pr. 

«  Graham  v.  Bleakie,  2  Daly  (K  359  ;  21  How.  (N.  Y.)  Pr.  286. 

Y.)  55,  58  (1866) ;  Ormsby  v.  Terry,  *  Verdin  v.  Slocum,  71  N.  Y.  348 

6  Bush  (Ky.)  553  (1869) ;   Banister  (1877),  reversing  9  Hun  (N.  Y.)  150. 

V.  Way,  Dick.  686  (1787) ;  Saunders  '  Graham  v.  Bleakie,  2  Daly  (N. 

V.  Grey,  4  Myl.   &  C.  515  (1811);  Y.)  55  (1866).     See  Coffin  v.  Cooper, 

Tanner  v.  Rapford,  4  Myl.  &  C.  518  14  Ves.  205  (1807). 

(1834) ;  Harding  v.  Harding,  4  Myl.  «  Duvall  v.  Speed,  1  Md.  Ch.  Dec. 

&  C.  514  (1839)  ;  Hodder  v.  Ruffin,  229,  235  (1848). 
1  Ves.  &  B.  544  (1813). 


688         mark:etable  title  must  be  offered.    [§  570. 

§570.  Purchaser  entitled  to  marketable  title.— A  pur- 
chaser of  land  under  a  decree  of  foreclosure  is  entitled  to  a 
marketable  title,'  and  can  not  be  compelled  to  accept  a  deed 
which  gives  him  only  a  doubtful  title,  or  leaves  him  to  the 
hazards  of  a  contest  with  other  parties  which  may  seriously 
affect  the  value  of  the  property.'  A  title  open  to  reasonable 
doubt  is  not  a  marketable  title.* 

A  purchaser  will  not  be  compelled  to  accept  a  title  which 
is  so  doubtful  that  it  may  expose  him  to  litigation,  even 
though  such  title  may  be  considered  good  by  the  court. 
And  if  there  is  a  reasonable  chance  that  some  third  person 
may  raise  a  question  as  to  the  title  of  the  estate  after  the 
completion  of  the  contract,  the  court  will  not  compel  a 
bidder  to  complete  his  purchase.* 

It  has  been  said  that  a  title  may  be  doubtful,  that  is  to  say, 
unmarketable,  because  of  the  uncertainty  of  some  matter  of 
fact  appearing  in  the  course  of  the  examination  of  it  ;  and 
that  if,  after  all  reasonable  proofs  have  been  produced,  the 
court  does  not  feel  called  upon  to  instruct  the  jury  to  find 
against  the  title,  there  is  not  a  reasonable  doubt  as  to  its 
validity.*  A  mere  possibility  that  the  purchaser  may  be 
disturbed  on  account  of  some  alleged  defect  in  the  title,  is 
not  a  sufficient  objection.' 


'  Fleming  v.  Burnham,  100  N.  Y.  gation  might  be  changed  by  a  new 

1(1885).  Lord  Eldon  held  in  an  early  inquiry,   or  are  open  to  opposing 

case,  that  a  purchaser  is  entitled  to  de-  inferences. 

mand  not  merely  a  marketable  title,  *  Post  v.  Bernheimer,  31  Hun  (N. 

but   one  which  he  can  take  with  Y.)  247  (1883).  See  Shriver  v.  Shriver, 

reasonable    certainty.      Lowes     v.  8G    N.    Y.    575    (1881) ;    Lockman 

Lush,  14  Ves.  547  (1808).  v.   Reilley,   29    Hun    (K   Y.)   434 

»  Jordan  v.  Poillon,  77  N.  Y.  518  (1883) ;  Richmond  v.  Gray,  85  Mass. 

(1879).  (3    Allen),    25    (1861);    Garnett    r. 

»  Fleming  v.  Burnham,  100  K  Y.  Macon,   6    Call.   (Va.)  368  (1825)  ; 

1,10(1885);  People  V.  Board  of  Stock  Christian  v.  Cabell,  22  Gratt.  (Va.) 

Brokers,  92  N.Y.  98(1883);  Jordan  82  (1872);    Emery  v.  Grocock,   6 

V.  Poillon,  77  N.  Y.  518  (1879).  Madd.  54  (1821) ;  Smith  v.  Death,  5 

Andrews,  J.,  says  in  Fleming  v.  Madd.  371  (1820);  Lowes  v.  Lush, 

Burnham,  that  it  would  be  specially  14  Ves.  547  (1808). 

unjust  to  compel  a  purchaser  to  take  *  Shriver  v.  Shriver,  86  N.  Y.  575, 

a  title,  the  validity  of  which  depends  584  (1881) ;    Emery  v.  Grocock,  6 

upon  a  question  of  fact,  when  the  Madd.  54  (1821). 

facts  presented  upon    the   investi-  «  Post  v.  Bernheimer,  81  Hun  (N.  • 


§§  571-572.]     PARTIAL   TAILUKE   OF   TITLE.  689 

§  571.    Partial  failure  of  title  will  excuse  purchaser.— 

Where  a  purchaser  does  not  obtain  the  same  premises  which 
he  had  reason  to  believe  he  would  under  the  terms  of  the  sale, 
he  will  not  be  required  to  complete  his  purchase.*  Thus, 
in  Beckenbaugh  v.  Nally'  a  purchaser  was  relieved  from  his 
bid,  where  the  terms  of  sale  stated  that  the  premises  would  be 
sold  "  subject  to  the  lease  of  the  present  upland  of  said 
property,  to  expire  May  i,  1884,"  and  at  the  time  of  the 
sale  a  brick  building,  claimed  to  be  worth  $5,000,  was  stand- 
ing upon  the  upland,  and  by  the  terms  of  his  lease  the 
tenant  was  entitled  to  remove  the  building,  of  which  right 
no  notice  was  given  at  the  time  of  the  sale. 

Where  several  parcels  of  real  estate  are  sold  upon  fore- 
closure as  an  entirety,  for  an  entire  sum  of  money,  and  the 
purchaser  obtains  title  to  only  a  part  of  the  parcels  sold, 
the  rule  of  caveat  emptor  is  applicable,  and  no  correct  rule 
can  be  prescribed  for  the  measure  of  the  purchaser's  dam- 
ages, if  such  partial  failure  of  title  affords  him  any  cause  of 
action  against  the  mortgagor  or  judgment  defendant.* 

§  572.  Rights  of  assignee  of  purchaser's  bid. — A  pur- 
chaser at  a  foreclosure  sale  may  make  a  valid  transfer  of  his 
bid  to  a  third  person  before  the  execution  of  a  deed  of  the 
premises;  and,  upon  the  application  of  the  assignee,  the 
court  may  direct  the  officer  making  the  sale  to  execute  a 
conveyance  immediately  to  such  assignee,  subject  to  the 
equitable  rights  or  liens  of  other  persons,  as  against  the  origi- 
nal purchaser,which  became  vested  prior  to  such  assignment.* 


T.)  247  (1883);  Hayes  v.  Harmony  (1859)  ;  Wood  v.  Mann,  3  Sumn.  C. 

Grove    Cemetery,    108   Mass.    400  C.  318  (1838) ;   Vale  v.  Davenport, 

(1871).  6  Ves.  615  (1802);  Rigby  v.  McNam- 

»  Riggs  V.  Pursell,  66  N.  Y.  193  ara,  6  Yes.  515  (1801). 
(1876) ;    Beckenbaugh  v.  Nally,  32  Where  a  purchaser  under  a  decree 

Hun  (N.  Y.)  160  (1884).  of  foreclosure  agreed    to    sell    the 

*  32  Hun  (N.  Y.)  160  (1884).  property  purchased  to  a  third  per- 

*  Parker  v.  Rodman,  84  Ind.  256  son  and  died  before  doing  so,  his 
(1882).  heirs  being  abroad,  the  court  ordered 

*  Proctor  V.  Farnam,  5  Paige  Ch.  a  conveyance  to  the  substituted  pur- 
(N.  Y.)  614  (1836).     See  ]\IcClure  v.  chaser,   and    the    payment   of   the 
Englehardt,  17  111.  47  (1855) ;  Splahn  money     into    court.      Pearce     v. 
V.   Gillespie,   48    Ind.    397    (1874) ;  Pearce,  7  Sim.  138  (1834). 
Ehleringer  v.  Moriarty,  10  Iowa,  78 

(«) 


690  BIDDER   HAVESTG    SALE   ENEOECED.  [§573. 

If  there  is  more  than  one  assignee  of  the  bid,  upon  motion 
in  the  action  in  which  the  sale  was  made,  the  court  will 
decide  between  them  which  is  entitled  to  the  deed  of  con- 
veyance/ But  where  the  purchaser  declines  to  take  the 
title  and  requests  the  master  to  transfer  his  bid  to  the  com- 
plainant, who  had  agreed  to  take  his  place,  it  has  been  held 
that  the  master  should  resell  the  property,  and  not  allow  the 
complainant  to  take  it  at  the  purchaser's  bid  and  receive  a 
deed.* 

§573'  Right  of  bidder  to  have  sale  completed. — 
Where  a  sale  is  made  by  a  referee  in  a  manner  not  authorized 
by  the  judgment,  parties  who  in  good  faith  have  bid  off  the 
property  upon  the  terms  offered  by  the  referee,  and  who 
have  made  a  payment  accordingly,  can  not  be  compelled  to 
pay  any  sum  in  addition  to  the  amount  of  such  bid,  upon 
the  ground  that  such  sum  is  required  to  make  the  bid  cor- 
respond with  the  terms,  upon  which  alone  the  referee  was 
authorized  to  make  the  sale.*  And  it  has  been  held,  that 
where  a  referee,  under  a  decree  of  foreclosure,  with  the 
consent  of  the  parties  in  interest,  sells  the  property  on 
credit  in  order  to  obtain  a  larger  price  therefor,  the  purchaser 
will  have  the  right  to  insist  upon  the  terms  of  his  purchase, 
and  can  not  be  compelled  to  pay  cash.*  Where  a  referee 
sells  the  premises  upon  terms  not  authorized  by  the  decree, 
the  remedy  of  parties  aggrieved  will  be  by  motion  to 
vacate  the  sale  and  for  a  resale.* 

Where  by  reason  of  delay,  arising  from  an  imperfect  title, 
the  circumstances  of  the  transaction  and  of  the  parties  have 
materially  changed,  the  purchaser  will  not  be  required  to 
complete  his  purchase.*  If  a  defective  title  causes  delay  in 
completing  a  sale,  the   purchaser  will  not  be   required   to 


'  Proctor  V.  Famam,  5  Paige  Ch.  » Hotchkiss  v.  Clifton  Air  Cure,  4 

(N.  Y.)  614  (1836).  Keyes  (N.  Y.)  170  (1868). 

*  Thompson  v.  Dimond,  3  Edw.  •  Merchants'  Bank  v.  Thomson,  55 
Ch.  (N.  Y.)  298(1839).  N.  Y.   7  (1873);   Taylor  v.   Long- 

»  Hotchkiss  V.  Clifton  Air  Cure,  4  worth,  89  U.  S,  (14  Pet.)  173  (1840) ; 

Keyes  (N.  Y.)  170  (1868).  bk.  10  L.  ed.  405. 

*  Rhodes  v.  Dutcher,  6  Hvm  (N. 
Y.)  453  (1876). 


§  573.]  BIDDER   HAVING    SALE   ENFORCED.  691 

pay  interest  upon  the  purchase  money  until  the  title  is 
perfected.'  If,  however,  he  accepts  the  rents  and  profits  of 
the  premises  from  the  day  of  sale,  he  will  be  chargeable 
with  interest  on  the  purchase  money.  But  in  such  cases,  it 
is  at  the  option  of  the  purchaser  whether  to  take  the  rents 
and  profits  and  pay  interest,  or  to  relinquish  the  rents  and 
profits  and  to  be  exempt  from  the  payment  of  interest.' 

An  appeal  from  an  order  refusing  a  resale  of  the  premises 
will  not  interfere  with  the  right  of  the  purchaser  to  have  the 
sale  completed.  And  the  appellant  will  not  be  entitled  to 
an  order  staying  the  purchaser  from  completing  his  purchase 
and  taking  possession  of  the  property,  without  giving  secur- 
ity for  the  payment  of  the  rents  and  profits  of  the  premises 
in  the  meantime,  and  that  no  waste  shall  be  committed." 

An  application  by  a  purchaser  at  a  foreclosure  sale  to  be 
relieved  from  his  purchase,  must  be  made  within  a  reason- 
able time,  and  when  so  made,  the  application  will  ordinarily 
be  granted,  if  the  purchaser  parted  with  his  money  under  a 
mistaken  notion  of  the  law,  although  he  may  have  had  full 
knowledge  of  the  facts.* 


'  Merchants'  Bank  v.  Thomson,  55  *  American  Insurance  Co.  v.  Oak- 

N.  Y.  7  (1873).  ley,  9  Paige  Ch.  (N.  Y.)  496  (1842) ; 

*  Merchants'  Bank  v.   Thomson,  s.  c.  38  Am.  Dec.  561. 

55  N.  Y.  17  (1873) ;  Diar  v.  Glover,  *  Barnard  v.  Wilson,  66  Cal.  351 

HofE  Ch.  (N.  Y.)  71  (1839).      See  1884). 
Worrall  v.  Munn,  53  N.  Y.  185  (1873). 


CHAPTER    XXVIIL 


DELIVERING    DEED— PASSING   TITLE— OBTAINING 
POSSESSION. 

EEFEREE'S    DEED-ESTATE  CONVEYED— REQUISITES  OF  DEED-^TITLB 

OP  PURCHASER  —  FIXTURES  —  EMBLEMENTS  —  RENTS  —APPEAL 

AND   REVERSAL  — DELIVERY    OF   POSSESSION  -  WRIT    OF 

ASSISTANCE-SUMMARY   PROCEEDINGS. 


574.  General  principles. 

575.  Provisions    for  letting    pur- 

chaser into  possession  — 
Rents. 

576.  Effect  and  force  of  referee's 

deed. 

577.  Estate  conveyed  and  interests 

passed  by  referee's  deed. 

578.  Execution    and    delivery  of 

deed. 

679.  Requisites    of     sheriff's    or 

referee's  deed. 

680.  Error  in  description  in  mort- 

gage— Correcting  in  deed. 

58L  Variance   of    description    in 
mortgage,  decree  and  deed. 

682.  Title    of    purchaser    relates 

back  to  time  of  executing 
mortgage — Reserving  case- 
ment. 

683.  Time  for  redemption — Effect 

on  title  of  purchaser. 

584.  All  fixtures  pass  to  purchaser 

under  referee's  deed. 

585.  Exceptions  to  above  rule. 

586.  All  permanent  improvements 

pass  under  referee's  deed. 


§  587.  All   emblements  puss  under 
referee's  deed. 

588.  Right  of  purcliaser  to  rents. 

589.  Appeal  and  reversal — Effect 

on  purcliaser's  title. 

590.  Delivering      possession      of 

premises  to  purchaser. 

591.  Possession  obtained  by  sum- 

mary process. 

592.  Provisions  of  Code  for  obtain- 

ing posse.><sion. 

593.  Writ  of  assistance  —  When 

granted. 

594.  "^'rit    of    assistance  —  How 

obtained. 

595.  Against  whom  possession  de- 

livered. 

596.  Who  entitled  to  writ  of  assis- 

tance. 

597.  Writ  of  assistance  improperly 

granted. 

598.  Writ  against  tenants  in  pos- 

session. 

599.  Writ  of  assistance  not  granted 

against  holder  of  paramount 
title. 

600.  Summary  proceedings  under 

New  York  Code. 


§  574.  General  principles. — Immediately  after  the  sale 
is  concluded,  if  the  purchaser  pays  the  amount  bid  and 
complies  with  the  terms  of  sale,  the  ofificer  who  made  the 
sale  may  execute  and  deliver  to  him  a  deed  of  the  premises.' 


•  Jackson  v.  Warren,  33  111.  331  (1863). 
692 


§  574.]  INTKODUOTOKY.  6^3 

It  is  not  necessary  to  make  a  report  of  the  sale,  nor  to  have 
the  report  confirmed,  before  the  deed  is  executed.  It  has 
been  said  that  the  referee's  deed  passes  the  title  to  the 
premises  to  the  purchaser  at  the  moment  of  its  delivery, 
although  the  sale  may  not  have  been  confirmed  ;'  but  a  legal 
title  can  not  vest  under  a  deed  until  its  delivery.' 

It  has  been  said  that  the  property  is  at  the  risk  of  the 
purchaser  from  the  date  of  the  delivery  of  the  deed  by 
the  officer  of  the  court,  and  that  he  can  not  repudiate  the 
contract,  although  the  sale  may  afterwards  be  set  aside  for 
irregularity.'  The  person  holding  such  a  deed  has  been  said 
to  be  prima  facie  the  legal  owner  of  the  land  described  in 
it.*  According  to  the  English  doctrine,  a  purchase  at  a 
foreclosure  sale  is  not  complete  until  the  report  of  the  officer 
making  such  sale  has  been  confirmed  ;  and  the  practice 
there  is  to  withhold  the  deed  until  the  entry  of  the  final 
order  of  confirmation.' 

Where  a  deed  is  delivered  before  the  sale  is  confirmed, 
the  confirmation  relates  back  to  the  date  of  the  sale  and 
gives  effect  to  the  deed  from  that  time.'  While  the  decisions 
in  this  country  are  not  uniform,  it  is  thought  that  the  better 
practice  is  to  report  the  sale  and  to  have  it  confirmed  before 
delivering  the  deed.  Yet  in  those  states  where  time  is 
allowed  for  redemption  after  the  sale,  it  is  the  practice  to 
delay  the  report  until  the  deed  has  been  executed  and 
delivered.^  In  such  cases  the  mortgagor  will  waive  all  merely 
technical  objections  to  the  sale  by  failing  to  have  it  set  aside 
before  the  time  for  redemption  expires.' 


»  Fort  V.  Burch,  6  Barb.  (N.  Y.)  » Jones  v.  Burden,  20   Ala.  383 

60  (1849).     See  MtcheU  v.  Bartlett,  (1852). 

51  N.  Y.  447  (1873),  aff'g  52  Barb.  *  Jackson  v.  Warren,  32  Dl.  331 

(N.  Y.)  319 ;  Fuller  v.  VanGeesen,  (1863).     See    Simerson    v.    Branch 

4  Hill  (N.  Y.)  171  (1843) ;   Jones  v.  Bank  at  Decatur,  12  Ala.  205  (1847). 

Burden,  20  Ala.   382  (1852),      See  *  Ex  parte   Minor,   11   Ves.   559 

ante  chap,  xxvii  for  the  New  York  (1805). 

practice,  which  requires  the  delivery  *  Lathrop  v.  Nelson,  4  Dill.  C.  0. 

of  the  deed  before  the  confirmation  194  (1877). 

of  the  sale.  '  Walker  v.  Sebum,   42  HI.   462 

«  Mitchell  V.  Bartlett,  51  N.  Y.  447  (1867). 

«g'3[3\  *  Fergus  v.  Wood  worth,  44  111. 


694  LETTING   PURCHASER    INTO   POSSESSION.       [§575. 

§  575.  Provisions  for  letting  purchaser  into  possession 
— Rents. — Where  the  decree  in  a  foreclosure  provides  that 
the  purchaser  shall  be  let  into  possession  upon  producing 
the  deed  of  the  referee,  or  other  officer  making  the  sale,  the 
purchaser  does  not  acquire  the  title  or  the  right  to  the  pos- 
session of  the  land,  or  to  the  rents  and  profits  thereof, 
until  the  delivery  of  such  deed  ;  up  to  the  time  of  such 
delivery  the  owner  of  the  equity  of  redemption  is  entitled 
to  the  possession  and  to  the  rents  and  profits  of  the  land.' 

Where  mortgaged  premises  are  sold  under  a  decree  of 
foreclosure,  the  owner  of  the  equity  of  redemption  will  be 
entitled  to  the  rents,  issues  and  profits  of  the  premises  until 
the  purchaser  becomes  entitled  to  possession  ;  and  where 
the  rent  is  payable  between  the  day  of  sale  and  the  time  when 
the  purchaser  will  be  entitled  to  the  possession,  such  rent 
will  belong  to  the  owner  of  the  equity  of  redemption,  and 
not  to  the  purchaser  at  the  sale.'  But  it  has  been  held, 
where  an  assignee  in  bankruptcy  of  the  mortgagor,  by  order 
of  the  bankrupt  court,  joined  in  the  sale  of  the  mortgaged 
premises  under  a  power  of  sale  contained  in  the  mortgage, 
that  the  purchaser  at  such  sale  was  entitled,  as  against  the 
assignee  in  bankruptcy,  to  the  rents  and  profits  of  the  prop- 
erty sold  for  the  period  intervening  between  the  day  of  sale 
and  the  day  of  the  confirmation  thereof  by  the  bankrupt 
court,' 

Where  a  decree  of  foreclosure  directs  the  sale  of  the 
premises,  and  that  the  purchaser  at  the  sale  be  let  into 
possession  upon  the  delivery  of  the  usual  referee's  deed,  the 
purchaser  will  be  entitled  to  a  writ  of  assistance  or  other 


374  (1867) ;  Walker  v,   Schura,  42  v.  Turner,  11  Paige  Ch.  (N.  Y.)  436 

HI.  462  (1867).  (1845) ;  Clason  v.  Corley,  5  Sandf. 

»  Mitchell  V.  Bartlett,  51  K  Y.  447  (  N.  Y.  )  447  ( 1852 ) ;    Whitney  v. 

(1873),  aff'g  52  Barb.  319  ;    Strong  Allen,  21  Cal.  233  (1862).     But  see 

V.   DoUner,   2   Sandf.  (N.   Y.)  444  McDevitt    v.    Sullivan,   8  Cal.   593 

(1849).  (1857).     See  also  Peck  v.   Knicker- 

*  Cheney  v.  Woodruff,  45  N.  Y.  bocker  Ice  Co.,  18  Hun  (N.  Y.)  183 

98  (1871) ;   Whalin  v.  White,  25  N.  (1879). 

Y.  462  (1862)  ;  Miner  v.  Beekman,  »  Lathrop  v.  Nelson,  4  Dill.  C.  0. 

11  Abb.  (N.  Y.)  Pr.  N.  S.  147  (1S70);  194  (1^77). 
fi.  c.  42  How.  (N.  Y.)  Pr.  33  ;  Astor 


§  57t).j       EFFECT  OF  EEFEREe's  DEED.  695 

proper  process  of  the  court,  requiring  the  delivery  of  the 
premises  to  him,  as  against  all  defendants  who  were  served 
with  the  summons ;  this  rule  also  prevails  as  against  a 
defendant  who  Is  not  mentioned  in  the  decree  by  name,  as  well 
as  against  one  whose  name  is  not  mentioned  in  the  officer's 
deed.*  Where  the  sale  is  consummated  by  the  delivery  of 
the  deed,  it  passes  the  entire  estate  held  by  the  mortgagor 
at  the  date  of  the  mortgage  as  against  all  defendants.'  The 
right  of  the  purchaser  to  the  possession  of  the  premises 
under  his  deed,  will  not  be  affected  by  the  fact  that,  pend- 
ing the  action,  the  plaintiff  executed  to  one  of  the  defendants 
a  conveyance  of  the  whole  of  the  premises  embraced  in  the 
decree.* 

§  576.  Effect  and  force  of  referee's  deed. — It  is  pro- 
vided by  the  Code,*  that  a  conveyance  upon  a  sale  made 
pursuant  to  a  final  judgment  in  an  action  to  foreclose  a 
mortgage  upon  real  property,  vests  in  the  purchaser  the  same 
estate  only  that  would  have  vested  in  the  mortgagee,  if  the 
equity  of  redemption  had  been  foreclosed.*  Such  a  convey- 
ance is  as  valid  as  if  it  had  been  executed  by  the  mortgagor 
and  the  mortgagee,  and  is  an  entire  bar  against  each  of 
them  and  against  each  party  to  the  action  who  was  duly 
summoned,  and  against  every  person  claiming  from,  through 
or  under  a  party  to  the  action,  by  title  accruing  after  the 
filing  of  the  notice  of  the  pendency  of  the  action.'  The  sale 
of  the  mortgaged  premises  and  the  confirmation  thereof  by 
the  court,  terminates  the  right  of  the  owner  of  the  equity 
of  redemption  to  pay  the  debt  and  redeem  the  estate.^ 

The  provision  of  the  Code,  declaring  a  conveyance  an 
'*  entire  bar,"  refers  to  rights  and  interests  in  the  equity  of 
redemption  and  not  to  interests  paramount  to  the  title 
of  both  the  mortgagor  and  the  mortgagee."     Thus,  where 


>  Frisbie  v.  Fogarty,   34  Cal.  11  *  N.  Y.  Code  Civ.  Pioc.  g  1632. 

(1867).  "  Lawrence  v.  Delano,  3  Sandf. 

« Montgomery  v.  Middlemiss,  21  (N.  Y.)  333  (1849). 
Cal.  103  (1862)  ;  Belloe  v.  Rogers,  9  «  N.  Y.  Code  Civ.  Proc.  §1632. 

Cal.  125  (1858).  '  Brown  v.   Frost,   10  Paige  Ch. 

»  Montgomery  v.  Middlemiss,  21  (N.  Y.)  243,  247  (1843). 
Cal.  103  (1862).  «  Rector  v.  Mack,  93  K  Y.  488 


606  ESTATE   CONVEYED    BY    KEFEKEe's    DEED.     [§577. 

persons  holding  prior  mortgages  or  liens  are  not  made 
parties  to  a  foreclosure,  or  if  made'  parties  and  no  purpose  is 
indicated  in  the  complaint  to  have  the  amount  of  their 
incumbrances  ascertained  and  paid  out  of  the  proceeds  of 
the  sale,  their  prior  liens  will  not  be  affected.*  And  a  pur- 
chaser at  a  legal  tax  sale  of  land,  upon  which  there  was  a 
mortgage  at  the  time  of  such  sale,  will  not  be  affected  by 
a  subsequent  foreclosure  of  such  mortgage  and  by  a  sale  of 
the  mortgaged  premises,  unless  he  is  made  a  party  to  the 
foreclosure.* 

§  577.  Estate  conveyed  and  interests  passed  by 
referee's  deed. — A  purchaser  at  a  mortgage  foreclosure 
sale  acquires  all  the  title  and  interest  of  both  the  mortgagor 
and  the  mortgagee  in  and  to  the  property.'  The  court 
undertakes  to  dispose  of  the  interests  of  the  parties  to  the 
suit  in  the  land,  and  the  purchaser  acquires  those  interests 
whatever  they  may  be.*  And  it  has  been  said  that  a  sheriff's 
sale  of  real  estate,  under  a  judgment  recovered  by  a  scire 
facias  upon  a  mortgage,  passes  to  the  purchaser  the  title 


(1883) ;  s.  c.  45  Am.  Rep.  260.    See  128  (1848) ;   Powesheik   County  v. 

Smith  V.   Roberts,    91    N.    Y.   470  Denni&on,  36  Iowa,  244  (1873) ;  s. 

(1883) ;  Emigrant  Industrial  Savings  c.    14  Am.    Rep.    521 ;     Brown   v. 

Bank  v.   Goldman,  75  N.   Y.    127  Tyler,  74  Mass.  (8  Gray),  135  (1857); 

(1878) ;  Rathbone  v.  Hooney,  58  N.  s.  c.  69  Am.  Dec.  239  ;  Young  v. 

Y.  463  (1874);  Lewis  v.  Smith,  9  N.  Brand,  15  Neb.  601  (1884) ;  Carter 

Y.  502  (1854);  s.   c.  61  Am.   Dec.  v.   Walker,  2  Ohio  St.  339  (1853). 

706 ;   Fryer  v.  Rockefeller,  4  Hun  The  purchaser  at  a  foreclosure  sale 

(N.  Y.)  800  (1875).     See  N.  Y.  Code  acquires  the  rights  of  the  mortgagee, 

Civ.  Proc.  §  1632.  so  far  as  he  has  any  claim  or  interest 

'  Bache  v.  Doscher,  67  N.  Y.  429  in  the  premises  for  the  security  of 

(1876),    affirming  41    N.    Y.  Supr.  his  debt,  and  also  so  much  of  the 

Ct.  (9  J.  &  S.)  150.  See  ante  chap.  ix.  equity    of    redemption    as    is    not 

°  Becker  v.  Howard,  66  N.  Y.  5  bound  by  the  lien  of  a  senior  in- 

(1876),  affirming  4  Hun  (N.  Y.)  359.  cumbrance.       Watson    v.    Dundee 

^Rector  v.   Mack,  93  N.  Y.  488  Mortgage  and  Trust  Investment  Co., 

(1883) ;    s.  c.    45    Am.    Rep.    260.  12  Oreg.  474  (1885).     See  Sellwood 

See  Westbrook  v.  Gleason,  79  N.  v.  Gray,  11  Oreg.  535  (1884). 

Y.  23  (1879);  Slattery  v.   Schwan-  ■»  Leech  v.  Hillsman,  8  Lea  (Tenn.) 

necke,  44  Him  (N.   Y.)  75  (1887) ;  747  (1882) ;    Zollman  v.  Moore,  21 

McMillan  v.   Richards,   9   Cal.   365  Gratt.  (Va.)  313  (1871) ;  Tallman  v. 

(1858) ;    Taylor    v.    Kearu,    68    111.  Ely,  6  Wis.  244  (1858) ;    Gillett  v. 

339  (1873);  Hamilton  v.  State,  1  Ind.  Eaton,  6  Wis.  30  (1858). 


§  577.]     ESTATE   CONTEYED    BY    KEFEKEE's   DEED.  697 

to  the  mortgaged  premises  discharged  of  all  equities, — even 
of  those  of  which  the  mortgagee  had  no  notice  or  knowl- 
edge.* 

The  purchaser  takes  the  title  of  the  mortgagor  and  the 
mortgagee  as  it  existed  at  the  time  of  the  execution  of 
the  mortgage,  subject  to  all  its  qualifications,'  because  the 
vendee  of  mortgaged  premises  under  a  sheriff's  deed  stands 
upon  the  equities  of  the  mortgagee.'  But  a  deed  can  not 
pass  a  greater  interest  than  that  which  is  authorized  by  the 
judgment,  although  by  its  terms  it  may  include  premises 
mentioned  in  the  mortgage,  but  which  were  subsequently 
released  by  the  mortgagee  from  the  lien  thereof.* 

If  his  title  was  a  mere  equity  or  a  right  to  own  the  prop- 
erty upon  th6  payment  of  the  purchase  price,  such  interest  is 
all  that  can  be  transferred  by  the  foreclosure.*  If  the  mortgage 
was  upon  a  lease  for  a  term  of  years,  the  purchaser  becomes 
the  assignee  of  the  lease.*  If  the  property  has  been  previ- 
ously sold  by  the  mortgagor  upon  contract,  and  his  vendee 
is  in  possession,  the  purchaser  will  take  the  position  of  the 
mortgagor  as  to  the  vendee ;  and  upon  default  in  the  payment 
of  the  money  due  upon  the  contract,  he  may  turn  him  out  of 
possession.^ 

>  Landell's   Appeal,   105  Pa.   St.  Ritger  v.  Parker,  62  Mass.  (8  Cush.) 

152  (1884).     A  foreclosure  deed  to  145  (1851) ;  s.  c.  54  Am.  Dec.  744 ; 

the  mortgagee  gives  him  the  same  Carter  v.  Walker,  2  Ohio  St.  339 

estate    as   the    foreclosure   of   the  (1853) ;  Frische  v.  Kramer,  16  Ohio, 

equity    of   redemption,   and   is    as  125  (1847) ;  s.  c.  47  Am.  Dec.  368  ; 

effectual  against  the  owner  of  the  DeHaven   v.   Landell,   31   Pa.    St. 

equity  as  if  he  executed  such  deed.  120  (1858) ;  West  Branch  Bank  v. 

Ruggles   V.    First   Nat.    Bank    of  Chester,  11  Pa.  St.  282  (1849) ;  s.  c. 

Centreville,  43  Mich.  192  (1880).  51  Am.  Dec.  547  ;  Hodson  v.  Treat, 

'  Vroom  V.  Ditmas,  4  Paige  Ch,  7  Wis.  263  (1859). 

(N.  Y.)  526,  531  (1834) ;  McMiUan  v.  «  Berryhill  v.  Kirchner,  96  Pa.  St. 

Richards,  9  Cal.  365  (1858) ;  s.  c.  70  489  (1880). 

Am.  Dec.  655  ;  Taylor  v.  Keam,  68  *  Laverty  v.  Moore,  32  Barb.  (N. 

HI.  339  (1873) ;  Hamilton  v.  State,  1  Y.)  347  (1860) ;  affirmed  83  N.  Y. 

Ind.  128  (1848) ;  Powesheik  County  658. 

V.  Dennison,  36  Iowa,  244(1873);  s.  c.  »  Stewart  v.  Hutchinson,  29  How. 

14  Am.  Rep.  521 ;  Marston  v.  Mars-  (N.  Y.)  Fr.  181  (1864). 

ton,  45  Me.  413  (1858) ;  Haynes  v.  « Kearney  v.  Post,  1  Sandf.  (N. 

Wellington,    25    Me.    458   (1845);  Y.)  105  (1847). 

Brown  v.  Tyler,  74  Mass.  (8  Gray),  '  Chute  v.  Noris,  31  Barb.  (N.  Y.) 

135    1857) ;  s.  c.  69  Am.  Dec.  239  ;  511  (1860).    See  Smith  v.  Roberts,  91 


698  EXECUTION   AJ<rD    DELIVERY    OF    DEED.         (_§  578. 

And  where  persons  holding  prior  liens  are  not  made 
parties  to  the  action,  or,  if  made  parties,  no  purpose  is 
indicated  in  the  complaint  to  have  their  liens  ascertained 
and  paid  out  of  the  proceeds  of  the  sale,  their  rights  will 
not  be  cut  off.' 

§  578.  Execution  and  delivery  of  deed. — The  referee  or 
sheriff  making  a  sale  of  mortgaged  premises  under  a  decree 
of  foreclosure,  is  required  to  execute  a  deed  of  the  premises 
to  the  purchaser  on  such  sale.*  The  deed  may  be  executed 
and  delivered  before  the  sale  is  confirmed  ;*  it  will  take 
effect  immediately  upon  delivery,  and  divests  all  parties  to 
the  action  of  the  title  from  the  time  of  the  sale.* 

The  court  will  not  order  the  officer  making  a  sale  to 
execute  and  deliver  a  deed  to  the  purchaser  until  the  whole 
of  the  purchase  money  has  been  paid  into  court,  even  where 
a  junior  mortgagee  is  the  purchaser  and  a  portion  of  the 
money  which  is  not  paid  in  belongs  to  such  purchaser  as 
surplus  money,  and  will  therefore  shortly  have  to  be  returned 
to  him.*  When  the  deed  is  not  ready  to  be  delivered  at  the 
time  fixed  for  that  purpose,  the  remedy  of  the  purchaser  is 
by  motion  for  leave  to  pay  the  money  into  court  and  to 
compel  the  referee  to  complete  the  sale  by  delivering  the 
deed." 


K  Y.  470  (1883) ;  Emigrant  Indus-  '  See  Mitchell  v,  Bartlett.  51  N. 

trial  Savings  Bank  v.  Goldman,  75  Y.  447  (1873),  aff'g  52  Barb.   (N. 

K    Y.    127   ( 1878 ) ;    Rathbone  v.  Y.)  319  ;    Fort  v.   Burch,  6  Barb. 

Hooney,    58    N.   Y.    463    (1874);  (N.  Y.)  60  (1849);    Fuller  v.  Van 

Lewis  V.  Smith,  9  N.  Y.  502  (1854) ;  Geesen,  4  Hill  (N.  Y.)  171  (1843)  ; 

8.  C.  61  Am.  Dec.  706  ;    Dwight  v.  Jones  v.  Burden,  20  Ala.  382  (1852) ; 

Phillips,  48  Barb.  (K  Y.)  116  (1865).  Walker  v.  Sebum,  42  111.  462  (1867) ; 

'  Emigrant     Industrial     Savings  Jackson    v.    Warren,    32    111.    331 

Bank  v.   Goldman,  75  N.  Y.   127  (1863). 

(1878);  Bache  v.  Doscher,  67  N.  Y.  ■•  McLaren  v.  Hartford  Ins.  Co.,  5 

429    (1876),    affirming    41    N.   Y.  N.  Y.  151  (1851) ;  Fort  v.  Burch,  6 

Supr.  Ct.  (9  J.  &  S.)  150  ;  Becker  v.  Barb.  (N.  Y.)  60  (1849) ;  Fuller  v. 

Howard,  66  K  Y.  5(1876),  affirm-  V.uiGeesen,    4    Hill   (K  Y. )    171 

ing  4  Hun   (N.   Y.)    359;    Walsh  (1843). 

V.  Rutger's  Fire  Insurance  Co.,  13  ^  Battershall  t.  Davis,   23  How. 

Abb.  (N.  Y.)  Pr.  33  (1861).    See  ante  (X.  Y.)  Pr.  383  (1861). 

Chap.  ix.  «  Clason  v.  Corley,  5  Sandf.  (N. 

•  N.  T.  Supreme  Court  Rule  61.  Y.)  447  (1852). 


§§579-580.]    EEQUISITES  or  SHERIIT's  DEED.  699 

§579.  Requisites  of  sheriff's  or  referee's  deed.— The 
Code  provides  that  where  property  is  sold  pursuant  to  a 
decree  or  a  judgment,  which  specifies  the  particular  party  or 
parties,  whose  right,  title  or  interest  is  directed  to  be  sold, 
the  deed  must  distinctly  state  in  the  granting  clause  thereof 
whose  right,  title  or  interest  was  sold,  without  naming  in 
that  clause  any  of  the  other  parties  to  the  action  ;  otherwise, 
the  purchaser  will  not  be  bound  to  accept  the  conveyance, 
and  the  officer  executing  it  will  be  liable  for  such  damages 
as  the  purchaser  may  sustain  by  the  omission,  whether  he 
accepts  or  refuses  the  conveyance.' 

This  provision  of  the  Code  has  been  held  to  apply  to  a 
deed  executed  at  a  mortgage  foreclosure  sale,  as  well  as  to 
a  deed  executed  upon  the  sale  of  property  pursuant  to  an 
execution.'  A  referee  selling  under  a  decree  of  foreclosure 
is  required  to  comply  with  said  provision  of  the  Code,  by 
inserting  in  the  deed  of  conveyance  the  names  of  the 
parties  who  executed  the  mortgage  foreclosed,  and  by  stat- 
ing that  all  the  right,  title  and  interest  which  said  mortgagors 
had  at  the  time  of  the  execution  of  the  mortgage,  was  sold 
and  thereby  conveyed.* 

§  580.  Error  in  description  in  mortgage— Correcting 
in  deed. — Where  there  is  a  mistake  in  the  description  of 
the  property  as  given  in  the  mortgage,  it  may  be  corrected 
by  a  proper  proceeding  before  foreclosure,  or  in  the  action 
to  foreclose  the  mortgage  ;  but  where  such  mistake  has  been 
carried  into  the  decree  of  foreclosure,  and  into  all  the  proceed- 
ings thereunder,  a  purchaser  at  the  sheriff's  sale  can  not 
maintain  an  action  to  correct  the  decree  and  the  subsequent 
proceedings,  although  the  sheriff  at  the  sale  may  have 
pointed  out,  as  the  property  which  he  was  selling,  the  prop- 
erty that  ought  to  have  been  described  in  the  mortgage, 
because  the  authority  of  the  sheriff  to  sell  is  limited  to  the 
property  actually  described  in  the  decree  and  order  of  sale.* 


»  N.  Y.  Code  Civ.  Proc.  §  1244.  (N.  Y.)  N.  C.  88  (1S77) ;  8.  c.  12 

•  Randell  v.  Von  EUert,  12  Hun  Hun  (N.  Y.)  577. 

(N.  Y.)  577  (1878).  *  Sliller  v.  Kolb,  47  Ind.  220(1874). 
»  Randell  v.  Von  Ellert,  4  Abb. 


700  EEKOR    IN    DESCRIPTION CORRECTLNG.        [§581. 

A  purchaser  at  a  mortgage  foreclosure  sale  can  not  acquire 
the  title  to  lands  not  described  in  the  mortgage,  although 
such  lands  may  be  described  in  the  complaint  and  judgment.' 
And  where,  by  mistake,  real  estate  belonging  to  one  person 
is  mortgaged  by  another  as  his  property,  and  is  sold  under 
a  decree  of  foreclosure  to  a  purchaser  who  has  no  notice  of 
such  mistake,  it  has  been  held  that  such  purchaser  can  not 
have  the  sale  set  aside  and  recover  the  purchase  money  bid 
and  paid  by  him  for  such  property  at  the  sale.' 

Where,  by  inadvertence,  the  referee's  deed  embraces  the 
whole  mortgaged  premises,  a  portion  of  which  had  previously 
been  released  from  the  lien  of  the  mortgage,  and  was 
excepted  from  the  operation  of  the  decree  of  foreclosure, 
the  purchaser  will  acquire  no  title  to  the  portion  so  released.* 
And  the  same  would  be  true  even  if  the  portion  of  the 
premises  so  released  were  embraced  in  the  decree,  but  were 
not  offered  at  the  sale.* 

§  581.  Variance  of  description  in  mortgage,  decree  and 
deed. — In  a  New  York  case  it  appeared  that  there  was  a 
clerical  error  in  the  decree  of  foreclosure,  which  consisted  in 
giving  a  distance  in  the  description  of  the  premises  as 
"about  193  feet,  4  inches,"  instead  of  "about  123  feet,  4 
inches,"  which  was  the  correct  distance.  The  mortgage 
described  the  premises  sold  correctly,  and  they  were  cor- 
rectly described  in  the  lis  pendens  and  in  all  the  proceedings 
except  the  judgm.ent.  Following  the  words  of  description 
in  the  judgment  was  a  reference  to  a  deed,  executed  by  the 
plaintiff  to  the  defendant,  in  which  the  description  was 
correct.  The  referee  sold  the  premises  described  in  the 
mortgage,  and  there  was  no  pretence  that  the  purchaser  was 
misled.  The  report  of  sale  was  correct  in  its  description, 
and,  after  the  sale,  an  order  of  the  court,  amending  the 
judgment  by  correcting  the  erroneous  description  of 
the   premises,   was   entered   nunc  pro  tunc,   upon   consent 


'  Hoopes  V.  Auburn  Water  Works         •  Laverty  v.  Moore,  33  Barb.  (N. 

Co.,  37  Hun  (N.  Y.)  568,  574  (1885).  Y.)  347  (1860). 

»  Neal  V.    Gillaspy,   56  Ind.   451  *  Laverty  v.  Moore,  33  N.  Y.  658 

(1877) ;  6.  c.  26  Am.  Rep.  37.  (1865),  aff'g  32  Barb.  (N.  Y.)  347. 


§  5S2.J    VAEIAI^CE   m   DESCRIPTION CORRECTmO.  701 

of  all  the  parties  who  had  appeared  in  the  action.  On  motion 
to  compel  the  purchaser  to  accept  the  title,  it  was  held  that 
the  court  had  ample  power  to  make  such  amendment.' 

Where  a  parcel  of  land  was  sold  under  a  decree  of  fore- 
closure and  conveyed  to  the  purchaser  under  an  erroneous 
impression  that  the  mortgage  covered  the  entire  tract,  the 
value  of  the  entire  tract  having  been  bid  and  paid,  and 
the  purchaser  having  been  placed  in  possession  thereof,  and  it 
was  afterwards  discovered  that,  from  a  mistake  in  the 
description,  the  mortgage  did  not  cover  the  entire  premises 
intended  to  be  mortgaged  and  that  by  reason  thereof  the 
legal  title  failed,  it  was  held  that  the  purchaser  was  entitled 
to  be  protected  in  the  peaceable  possession  of  the  land  pur- 
chased.' But  it  is  the  general  rule  that  the  title  of  a 
purchaser  at  a  mortgage  foreclosure  sale  is  co  extensive 
with  the  description  contained  in  the  mortgage,  the  bill  to 
foreclose,  and  the  decree  under  which  the  sale  is  made.* 

§  582.  Title  of  purchaser  relates  back  to  time  of 
executing  mortgage — Reserving  easement. — The  title 
of  the  purchaser  at  a  sale  under  a  decree  of  foreclosure  relates 
back  to  the  date  of  the  delivery  of  the  mortgage,  as  against 
all  intervening  purchasers  and  incumbrancers  who  were 
made  parties  to  the  action,  or  who  became  interested  in  the 
i^r&m.\sts  pendente  lite.*     All  incumbrances  and  liens,  and  all 


»  Wood  V.  Martin,  66  Barb.  (N.  242 ;    Fuller  v.   VanGeesen,  4  Hill 

Y.)  241  (1873).     See  Hogan  v.  Hoyt,  (N.  Y.)  171  (1843) ;  Klock  v.  Cronk- 

37  N.  Y.  800  (1867) ;    Hotaling  v.  hite,   1   Hill   (N.   Y.)    107   (1841) ; 

Marsh,   14    Abb.   (N.  Y.)  Pr.    161  Bissell  v.  Payn,  20  Johns.  (N^.  Y.)  3 

(1862) ;  Alvord  v.  Beach,  5  Abb.  (N.  (1822) ;   Jackson  v.    Dickenson,   15 

Y.)  Pr.   451  (1857);    Woodruff   v.  Johns.  (N.  Y.)  309  (1818);   s.  c.  8 

Wicker,  2  Bosw.  (N.  Y.)  613  (1858);  Am.  Dec.  336;  Jackson  v.  Bull,  1 

Close  V.  Gillespey,  3  Johns.  (N.  Y.)  Johns.    Cas.    (N.    Y.)    81    (1799) : 

618(1808).  Lathrop  v.  Ferguson,  22  Wend.  (N. 

»  Waldron  v.  Leston,  15  N.  J.  Eq.  Y.)  216  (1889) ;  Nellis  v.  Latlirop, 

(2McCart.)126(1862).  See  DeEimer  22  Wend.  (N.  Y.)  121,  122  (1839); 

V.  Cantillon,  4  Johns.  Ch.(K  Y.)85  s.   c.  34  Am.   Dec.   285;    People's 

(1819).  Savings  Bank  v.  Hodgon,  64  Cal. 

•  McGee  v.  Smith,  16  N.  J.  Eq.  95  (1883) ;    Ruggles  v.    First  Nat. 
(1  C.  E.  Gr.)  462  (1863).  Bank,  43  Mich.  192  (1880) ;  Gamble 

*  Jackson  v,  Ramsay,  3  Cow.  (N.  v.  Horr,  40  Mich.  561  (1879). 
Y.)  75  (1824);    s.   c.   15  Am.  Dec. 


703        DEED  EFEECTIVE  FKOM  DATE  OE  MORTGAGE.    [§  583. 

conditions,  reservations  and  restrictions  which  the  mort- 
gagor may  have  imposed  upon  the  property  subsequently  to 
the  execution  of  the  mortgage,  will  be  extinguished.' 

Thus,  a  plaintiff,  being  the  owner  of  a  lot  which  was 
subject  to  a  mortgage,  conveyed  it  to  M.,  reserving  an 
easement  therein  for  light  and  air  to  the  windows  of 
its  church  adjoining,  M.  assuming  the  mortgage.  M. 
conveyed  the  lot,  through  a  third  person,  to  his  wife,  subject 
■to  the  same  mortgage,  but  without  an  assumption  on 
her  part  to  pay  the  amount  thereof.  Upon  foreclosure  of 
the  mortgage,  the  wife  of  M.  became  the  purchaser.  In  an 
action  to  restrain  her  from  obstructing  the  light  and  air  to  the 
windows  of  said  church,  it  was  held  that  under  her  foreclosure 
deed,  Mrs.  M.  acquired  an  absolute  title,  unincumbered  by  the 
easement,  that  she  owed  no  duty  to  the  plaintiff  or  mort- 
gagee, requiring  her  to  pay  off  the  mortgage,  and  that  there 
were  no  equitable  rights  against  her  which  would  prevent  her 
from  asserting  her  title."  It  seems  that  in  such  a  case  the 
plaintiff,  to  save  its  easement,  should  have  appeared  in 
the  foreclosure  suit,  and  bid  the  full  amount  of  the  mortgage 
debt  and  costs  upon  the  sale,  subject  to  the  easement.* 

§  583.  Time  for  redemption— Effect  on  title  of  pur- 
chaser.— In  those  states  where  a  period  of  time  is  allowed 
for  redemption,  after  the  sale  of  the  premises  under  a  mort- 
gage foreclosure,  a  purchaser  of  land  at  such  sale  acquires 
no  legal  title,  nor  right  to  be  invested  with  a  legal  title,  until 
the  period  for  redemption  has  expired.*  He  can  not  main- 
tain an  ejectment  or  other  possessory  action  on  his  certificate 
of  purchase,*  for  he  will  not  be  entitled  to  possession  until 
the  officer  making  the  sale  has  executed  and  delivered  to 
him  a  deed  of  the  premises.* 


'  King  V.  McCully,  38  Pa.  St.  76  *  Rockwell  v.  Servant,  63  IlL  424 

(1860).    See  Rector  v.  Mack,  93  N.  (1872) ;  Delahay  v.  McConnel,  5  111. 

Y.  488  (1883) ;  Davis  v.  Connecticut  (4  Scam.)  156  (1842). 

Mut.  Life  Ins.  Co.,  84  111.  508 (1877).  «  RockweU  v.  Servant,  63  111.  424 

« Rector  v.  Mack,  93  N.  Y.  488  (1872). 

(1883).  «  O'Brian  v.  Fry,  83  HL  87,  274 

» Rector  v.  Mack,  93  N.  Y.  488  (1876) ;  Bennett  v.  Matson,  41  HL 

(1883).  333(1866). 


§  584.]    FIXTURES    PASS    UNDER   REEEREe's    DEED.  703 

He  acquires  no  title  to  the  premises  until  the  period  for 
redemption  has  passed,  and  he  is  entitled  to  his  deed.  His 
deed,  when  executed,  will  relate  back  to  the  time  of  the  sale  in 
order  to  cut  off  intervening  incumbrances.  His  title  will 
become  absolute  only  when  his  right  to  a  deed  accrues; 
until  such  time,  he  will  have  only  an  unmatured  right  to  a 
deed.' 

§  584.  All  fixtures  pass  to  purchaser  under  referee's 
deed.— The  rules  as  to  fixtures  which  pass  to  a  purchaser  on 
a  mortgage  foreclosure  sale  are  the  same  as  those  which 
govern  a  conveyance  from  a  grantor  to  a  grantee."  What- 
ever is  attached  to  the  freehold  and  would  pass  under  a  deed 
as  between  a  vendor  and  a  vendee,  will  pass  as  between  a 
mortgagor  and  a  mortgagee.'  When  a  mortgagor,  subse- 
quently to  the  execution  of  a  mortgage,  places  maclimery 
or  other  fixtures  upon  the  mortgaged  premises,  the  pur- 
chaser of  such  premises,  at  a  foreclosure  sale,  will,  therefore, 
acquire  title  to  the  fixtures  as  a  part  of  the  realty.* 


»  Stephens  v.  Illinois  Mutual  Fire 
Ins.  Co.,  43  m.  327,  331  (1867). 
See  Johnson  v.  Baker,  38  111.  98 
(1865) ;  Sweezy  v.  Chandler,  11  IlL 
445  (1849). 

»  Snedeker  v.  Warring,  12  N.  T. 
170,174  (1854).  See  Bishop  v.  Bishop, 
11  N.  T.  123,  126  (1854) ;   s.  c.  62 
Am    Dec.   68;   Bank  of  Utica  v. 
Finch,  3  Barb.  Ch.  (N.  Y.)  293.  299 
(1848) ;  Robinson   v.    Preswick,    3 
Edw.  Ch.  (N.  T.)  246  (1838) ;  Main 
V.  Schwarzwaelder,  4  E.  D.  Smith, 
(N.   Y.)    273   (1855)  ;    Winslow  v. 
Merchants'  Ins.   Co.,  45    Mass.   (4 
Mete.)  306  (1842) ;  B.  c.  38  Am.  Dec. 
368  ;  Union  Bank  v.  Emerson,  15 
Mass.  159  (1818)  :  LongstafE  v.  Mea- 
goe,  2  Ad.  &  E.   167  (1834).    See 
ante  §§  426,  427,  428. 

»  Miller  v.  Plumb,  6  Cow.  (N.  Y.) 
665  (1827) ;  s.  c.  16  Am.  Dec.  456  ; 
Robinson  v.  Preswick,  3  Edw.  Ch. 
(N.  Y.)  246  (1838) ;  Union  Bank  v. 
Emerson,  15  Mass.  159  (1818). 


*  Voorhees  v.  McGinnis,  48  N.  Y. 
278  (1872) ;   Snedeker  v.  Warring, 
12  N.   Y.    170    (1854) ;    Bishop    v. 
Bishop,  11  N.  Y.  123  (1854) ;  s.  c. 
62  Am.  Dec.  68  ;  Rice  v.  Dewey,  54 
Barb.  (N.  Y.)  455  (1862) ;  Gardner 
V.   Finley,   19    Barb.    (N.   Y.)  317 
(1855) ;  Miller  v.  Plumb,  6  Cow.  (N. 
Y.)  665  (1827) ;  s.  c.  16  Am.  Dec. 
456  ;  Robinson  v.  Preswick,  3  Edw. 
Ch.  (N.  Y.)  246  (1838) ;  Babcock  v. 
Utter,   32  How.    (N.  Y.)   Pr.    439 
(1864);   8.    c.    1  Abb.   App.   Dec. 
(N.Y.)27 ;  Sullivan  v.  Toole,  26  Hxin 
(N.  Y.)  203  (1882);  Main  v.  Schwarz- 
waelder,  4  E.  D.  Smith  (N.  Y.)  273 
(1855) ;    Sands  v.  PfeifEer,  10  Cal. 
258  (1858);  Clore  v.   Lambert,  78 
Ky.  224  (1879) ;   Wight  v.  Gray,  73 
Me.    297    (1882);    Union    Bank    v. 
Emerson,    15    Mass.    159    (1818) ; 
Lackas  v.  Bahl,  43  Wis.  53  (1877). 

For  a  full  collection  of  the  author- 
ities as  to  what  are,  and  what  are 
not,  fixtures,  see  ante  §|  426,  437, 


704  FIXTURES   PASS    UNDER    REFEREe's    DEED.     [§585, 

Thus,  the  owner  of  real  estate,  with  a  flouring  mill  thereon, 
which  was  subject  to  a  mortgage,  procured  new  machinery 
for  such  mill  on  credit,  upon  an  agreement  that  the  title  to 
the  machinery  should  not  pass  to  the  purchaser  until  it  was 
fully  paid  for.  The  machinery  was  attached  to  the  realty 
as  was  intended.  The  purchaser  upon  the  foreclosure  of 
such  mortgage  was  held  to  take  title  to  the  machinery  as 
against  the  vendor  of  it,  notwithstanding  the  contract  and 
the  vendee's  failure  to  pay  therefor.* 

In  determining  whether  chattels  affixed  to  land  will  pass 
under  a  mortgage  of  the  realty,  it  is  immaterial  whether 
such  chattels  were  attached  before  or  after  the  execution  of 
the  mortgage,  because,  as  a  general  rule,  they  become  bound 
by  the  mortgage  whenever  they  become  a  part  of  the  realty.' 

§  585.  Exceptions  to  above  rule. — To  this  general  rule, 
however,  there  are  some  exceptions,  as  where  chattels  are 
attached  to  real  estate  with  the  intention  that  they  shall 
not  thereby  become  a  part  of  the  freehold  ;  such  intention 
will  control,  as  a  general  rule,  and  a  mortgage  of  the  real 
estate  will  not  bind  such  chattels.*     And  it  has  been  held 


428.     See   Walker  v.  Sherman,  20  '  Bass  Foundry,   &c..  Works  v. 

Wend.  (N.  Y. )   636    (1889);   also  Gallentine,  99  Ind.  525  (1884). 

Potter  V.  Cromwell,  40  N.  Y.  287  »  Snedeker  v.  Warring,  12  N.  Y. 

(1869) ;  Butler  v.  Page,  48  Mass.  (7  170  (1854) ;  Rice  v.  Dewty,  54  Barb. 

Mete.)  40  (1843) ;  s.  c.  39  Am.  Dec.  (N.  Y.)  455  (18G9) ;  Gardner  v.  Fiu- 

757;    Winslow 'v.   Merchants'  Ins.  ley,    19  Barb.   (N.    Y.)  817  (1855); 

Co.,  45  Mass.  (4  Mete.)  306  (1842);  s.  Sullivan  v.  Toole,  26  Hun  (K  Y.) 

C.  38  Am.  Dec.  368  ;  Noble  v.  Bos-  203  (1882) ;  Phinney  v.  Day,  70  Me. 

worth,  36  Mass.  (19  Pick.)  314  (1837);  83(1884);    Corliss  v.  McLagin,  29 

Crane  v.  Brigham,  11  N.  J.  Eq.  (3  Me.  115  (1848) ;  Butler  v    Page,  48 

Stockt.)  29  (1855) ;  Teafl  v.  Hewitt,  Mass.  (7  Mctc.)  40  (1843) ;  s.  c.  39 

1  Ohio  St.  511.  529,  530(1853);  8.  c.  Am.   Dec.   757;  Winslow  v.  Mer- 

59   Am.    Dec.    734;    Christian    v.  chants' Ins.  Co.,  45  Mass.  (4  Mete.) 

Dripps,  28  Pa.  St.  271  (1857) ;  Hill  306  (1842) ;  s.  c.  38  Am.  Dec.  368 ; 

V.  Wyntworth,  28  Vt.  428  (1856);  Peirce    v.    Goddard,    39   Mass.   (22 

Walmsley  v.   Milne,  7  C.  B.  N.  S.  Pick.)  559  (1839) ;  Curry  v.  Schmidt, 

115  (1859)  ;   8.  c.  29  L.  J.  C.  P.  97  ;  54  Mo.  515  (1S74) ;  Powers  v.  Denni- 

6  Jur.  N.  S.  125  ;  97  Eng.  C.  L.  114;  son,  30  Vt    752  (1858)  ;  Preston  v. 

Lancaster  v.  Eve,  5  C.  B.  N.  S.  717  Briggs,  16  Vt.  124  (1844), 

'(1859) ;    8.   c.  28  L.  J.  C.  P.  235  ;  «  See  Slieldon  v.  Edwards,  35  N. 

5  Jur,  K  S.  683  ;  94  Eng.  C.  L.  717.  Y.  279  (1866)  ;  Ford  v.  Cobb,  20  N. 

As  to  removed  fixtures,  see  ante  %  257.  Y.  344  (1859). 


§  586.]  EVIPEOVEMENTS    PASS    UNDER   DEED.  ^05 

that  a  mortgage  will  not  bind  personal  property  which  has 
been  attached  to  the  freehold  subsequently  to  the  execution 
of  the  mortgage,  where  equities  in  favor  of  third  persons 
require  that  it  should  continue  to  be  considered  as  personal 
property.'  It  is  well  settled  that  where,  by  the  express 
agreement  of  the  owner  of  the  equity  of  redemption  and 
the  owner  of  chattels  affixed  to  the  land,  such  chattels 
are  to  remain  personal  property,  they  will  not  become  a 
part  of  the  realty,  but  will  be  subject  to  removal  by  the 
owner  at  any  time.* 

§  586.  All  permanent  improvements  pass  under 
referee's  deed.— All  additions  of  a  permanent  character 
by  way  of  improvement  made  on  mortgaged  premises  by 
the  mortgagor  or  the  owner  of  the  equity  of  redemption, 
are  regarded  as  part  of  the  mortgaged  estate  and  will  inure 
to  the  benefit  of  the  holder  of  the  mortgage,  and  will  pass  to 
the  purchaser  on  a  foreclosure  sale.'  Thus,  where  a  mort- 
gagor, while  the  owner  of  the  equity  of  redemption,  erected 
a  house  upon  the  mortgaged  premises,  without  any  agree- 
ment with  the  mortgagee,  it  was  held  that  it  became  a  part 
of  the  realty  and  passed  with  it  to  the  purchaser  at  the  sale 
on  the  foreclosure  of  the  mortgage  ;*  and  the  same  rule  has 
been  held  to  apply  to  a  building  erected  upon  mortgaged 
premises  by  the  husband  of  the  mortgagor.* 

Where  a  mortgagor  erected  a  frame  building  by  the  side 
of  his  mill,  to  be  used  as  an  office  in  connection  with  the 
mill,  the  building  was  held  to  be  a  fixture,  although  it  was 
erected  after  the  mortgage  was  given  and  was  intended  to 
be  only  temporary,  and  was  neither  attached  to  the  mill  nor 
secured    to    the    ground,   but    rested   upon  wooden   blocks 

>  See  Tiflt  v.  Horton,  53  N.  T.  527  (1848) ;  Smith  v.  Benson,  1  Hill 

877  (1873) ;  s.  c.  13  Am.  Rep.  537  ;  (N.  Y.)  176  (1841). 

Voorhees  v.  McGinnis,  48  jST.  Y.  278  *  Baird    v.    Jackson,   98    Bl.    78 

(1872).  (1881);   Wood  v.   Whelen,  93  111. 

« Tifft  V.  Horton,  53  N.  Y.  377  153  (1879). 

(1873) ;  s.  C.  13  Am.  Rep.  537  ;  Ford  *  Matzon  v.   Griffin,    78  Bl.   477 

V.  Cobb,  20  K  Y.  344  (1859) ;  Molt  (1875) ;  Dooley  v.  Crist,  25  111.  551 

V.  Palmer,  1  N.  Y.  564  (1848)  ;  Far-  (1861). 

rar  v.  Chauffetete,  5  Den.  (K  Y.)  »  Wight  v.  Gray,  73  Me.  297  (1882). 

(45) 


T06  EMBLEIEENTS  PASS  UNDEE  EEFEREE's  DEED.  [§587. 


Standing  upon  the  surface  of  the  earth.'  Where  the  owner 
of  the  equity  of  redemption  makes  improvements  upon  land 
that  is  mortgaged,  he  will  not  be  entitled  to  an  allowance 
for  them  as  against  the  mortgagor,  but  in  some  cases  he  may- 
be allowed  for  such  improvements  out  of  the  surplus 
moneys.* 

§  587.    All  emblements  pass  under  referee's  deed.— 

The  crops  growing  on  the  land,  as  well  as  the  land,  are  held 
as  a  security  for  the  mortgage  debt,'  and  on  the  foreclosure  of 
the  mortgage,  whatever  crops  are  then  growing  upon  the 
mortgaged  premises,  if  planted  subsequently  to  the  making 
of  the  mortgage,  will  pass  to  the  purchaser  at  the  sale, 
whether  they  were  planted  by  the  mortgagor  or  his  tenant, 
free  from  all  claim  upon  them  by  such  mortgagor  or  tenant  ;* 


'  State  Savings  Bank  v.  Kerche- 
val,  65  Mo.  682  (1877) ;  s.  c.  27  Am. 
Rep.  310  (1877).  See  also  Butler  v. 
Page,  48  Mass.  (7  Mete.)  40  (1843); 
B.  c.  39  Am.  Dec.  757. 

As  to  what  improvements  are  fix- 
tures see  Stockwell  v.  Campbell,  39 
Conn.  362  (1872) ;  s.  c.  12  Am.  Rep. 
393 ;  Arnold  v.  Crowder,  81  111.  56 
(1876);  s.  c.  25  Am.  Rep.  260; 
Ottumwa  Woolen  Mill  Co.  v.  Haw- 
ley,  44  Iowa,  57  (1876);  s.  c.  24  Am. 
Rep.  719  ;  McConnell  v.  Blood,  123 
Mass.  47  (1877) ;  s.  c.  25  Am.'  Rep. 
12  ;  Richardson  v.  Borden,  42  Miss. 
71  (1868) ;  s.  c.  2  Am.  Rep.  595 ; 
Jarechi  v.  Philharmonic  Society,  79 
Pa.  St.  403 ;  s.  C.  21  Am.  Rep.  78 ; 
Meigs'  Appeal,  62  Pa.  St.  28  (1869) ; 
8.  c.  1  Am.  Rep.  372;  Hutchins  v. 
Masterson,  46  Tex.  551  (1877) ;  s.  c. 
26  Am.  Rep.  286. 

«  Wharton  v.  Moore,  84  N.  C.  479 
(1881) ;  8.  c.  37  Am.  Rep.  627.  See 
Rice  V.  Dewey,  54  Barb.  (N.  Y.)  455 
(1863);  Union  Water  Co.  v.  Mur- 
phy, 22  Cal.  621  (1863) ;  Baird  v. 
Jackson,  98  111.  78  (1881);  Martin 
V.    Beatty,     54    111.     100    ( 1870)  ; 


McCumber  v.  Oilman,  15  El.  881 
(1854);  Childs  v.  Dolan,  87  Mass. 
(5  Allen),  319  (1862). 

»  See  Gillett  v.  Balcom,  6  Barb. 
(N.  Y.)  370  (1849);  Shepard  v. 
Philbrick,  2  Den.  (N.  Y.)  174  (1846); 
Lane  v.  King,  8  Wend.  (N.  Y.)  584 
( 1833 ) ;  8.  c.  24  Am.  Dec.  105  ; 
Toby  v.  Reed,  9  Conn.  216  (1832) ; 
Jones  V.  Thomas,  8  Blackf.  (Ind.) 
428  (1847);  Hughes  v.  Graves, 
1  Litt.  (Ky.)  317  (1822) ;  Winslow 
V.  Merchants'  Insurance  Co.,  45 
Mass.  (4  Mete.)  310  (1842) ;  8.  c.  38 
Am.  Dec.  368 ;  Cassilly  v.  Rhodes, 
12  Ohio,  88  (1843) ;  Crews  v.  Pendle- 
ton, 1  Leigh  (Va.)  297,  305  (1829) ; 
8.  c.  19  Am.  Dec.  750. 

*  Gillett  V.  Balcom,  6  Barb.  (N. 
Y.)  370  (1849).  See  Shepard  v.  Phil- 
brick,  2  Den.  (N.  Y.)  174  (1846) ; 
Lane  v.  King,  8  Wend.  (N.  Y.)  584 
(1832);  8  c.  24  Am.  Dec.  105; 
Jones  V.  Thomas,  8  Blackf.  (Ind.) 
428  (1847) ;  Ledyard  v.  Phillips,  47 
Mich.  305  (1882) ;  Ruggles  v.  First 
Nat.  Bank  of  Centreville,  43  Mich. 
192  (1880) ;  Howell  v.  Schenck,  24 
N.  J.  L.  (4  Zab.)  89  (1853) ;  Crews 


§  587.]  EMBLEMENTS  PASS  UNDEK  EEFEREe's  DEED.         707 

and  on  a  proper  application,  under  some  circumstances,  the 
court  will  provide  for  their  preservation  until  possession  is 
given  to  the  purchaser.'  But  the  purchaser  at  a  foreclosure 
sale  can  not,  before  the  sale  is  confirmed  and  before  he  has 
acquired  possession  of  the  land,  maintain  an  action  in 
replevin  for  crops  growing  thereon  at  the  time  of  the  sale 
but  afterwards  severed  from  the  premises  by  the  person  in 
possession.' 

Where,  however,  the  foreclosure  is  instituted  and  a  sale  is 
ordered  after  the  severance  of  the  crops,  the  title  thereto 
will  not  pass,  under  such  proceedings,  to  the  mortgagee  or 
the  purchaser.*  The  purchaser  at  a  mortgage  foreclosure 
sale  will  be  entitled  to  the  crops  growing  at  the  time  of 
the  sale,  in  preference  to  a  person  claiming  under  the 
mortgagor  whose  claim  originated  subsequently  to  the  execu- 
tion of  the  mortgage.*  And  it  has  been  held  that  a  person 
purchasing  the  premises  upon  the  foreclosure  of  a  mortgage 
is  entitled  to  the  growing  crops  in  preference  to  a  person 
purchasing  the  same  premises  at  a  sale  subsequently  made 
under  a  decree  in  bankruptcy.* 

But  when  the  crops  are.  reserved  at  a  sale  by  special 
announcement,  duly  authorized,  they  will  not  pass  to  the 
purchaser."  This  rule  is  placed  upon  the  grounds,  that  while 
the  mortgagee  is  not  bound  to  sell  in  parcels,  unless  the 
mortgaged  premises  are  described  in  parcels,'  yet  that  he 


V.   Pendleton.   1    Leigh    (Ya.)    297  Strauss,  98  111.  485  (1881) ;  Jones  v. 

(1829) ;  8.  c.  19  Am.  Dec.  750.  Thomas,  8  Blackf.  (Ind.)  428  (1847); 

'  Ruggles  V.  First  Nat.  Bank  of  Howell  v.  Schenck,  24  N.  J.  L.  (4 

Centreville,  43  Mich.  192  (1880).  Zab.)  89  (1853) ;  Parker  v.  Storts,  15 

«  Woehler  V.  Endter,  46  Wis.  301  Ohio    St.    351    (1864);     Crews    v. 

(1879).  Pendleton,  1  Leigh  (Va.)  297  (1829) ; 

»  Buckout  V.  Swift.   27  Cal.  438  s.  c.  19  Am.  Dec.  750. 

(1865) ;  Codrington  v.  Johnstone,  1  *  Gillett  v.  Balcom,  6  Barb.   (N. 

Beav.  520  (1838).  Y.)  370  (1849). 

*  Shepard  v.  Philbrick,  2  Den.  (N.  "  Sherman  v.  Willett,  42  N.  Y. 

T.)  174  (1846) ;  Stewart  v.  Doughty,  146  (1870). 

9Johns.(N.Y.)  112  (1812);  Whipple  'See    Griswold    v.    Fowler,    24 

V.  Foot,  2  Johns.  (N.  Y.)  418  (1807);  Barb.   (N.  Y.)  135  (1857) ;   s.  c.  4 

B.   c.  3  Am.   Dec.    442;   Lane   v.  Abb.  (N.  Y.)  Pr.  238;  Lamerson  v. 

King,  8  Wend.  (N.  Y.)  584  (1832);  Marvin,  8  Barb.  (N.  Y.)  9  (1850). 
8.  0.  24  Am.  Dec.  105 ;  Anderson  v. 


708  KIGHT  OF    PURCHASER   TO    RENTS.  [§  588. 

may  do  so  where  the  premises  are  so  situated  that  he  -"^'i 
sell  in  parcels  ;  that  he  may,  if  he  chooses,  even  release  a 
portion  of  the  premises  and  sell  the  balance;  that  there 
is  no  reason  why  he  may  not  sell  the  same  portion  before 
releasing  any;  and  that  in  such  case  the  mortgage  is  a  lien 
upon  the  whole  premises,  including  the  growing  crops, 
and  at  the  time  of  the  sale  the  mortgagee  may  announce 
that  he  will  not  sell  the  growing  crops,  but  will  sell  the 
balance.* 

But  the  sherif?',  or  other  ofificer  making  the  sale,  has  no 
authority  to  reserve  the  growing  crops,  and  where  he  makes 
such  a  reservation,  without  authority  contained  in  the 
mortgage  or  in  the  decree  of  sale,  the  reservation  will  be 
without  effect  and  the  sale  will  pass  both  the  land  and  the 
growing  crops  to  the  purchaser;  and  in  those  ca^^es  where 
he  has  authority,  such  reservation  will  probably  be  of  no 
avail  unless  it  is  expressed  in  his  deed.' 

§  588.  Right  of  purchaser  to  rents. — The  mortgagor 
will  be  entitled  to  the  possession  of  the  land  and  to  the 
rents  and  profits  thereof,  until  the  mortgagee  takes  posses- 
sion or  institutes  proceedings  to  subject  the  rents  and 
profits  to  his  claim.'  Upon  a  mortgage  foreclosure  sale  the 
purchaser  does  not  acquire  the  title  to  the  premises  nor  a 
right  to  the  possession  thereof,  until  the  delivery  of  the  deed 
by  the  ofificer  making  the  sale  ;  until  that  time  the  owner  of 
the  equity  of  redemption  will  be  entitled  to  the  possession 
of  the  land  and  to  its  rents  and  profits.* 


>  Sherman  v.  Willett,   42  N.  Y.  ■•  Mitchell  v.   Bartlett.  51  N.  Y. 

146(1870).  447    (1873),    aff'g    52    Barb.    (N. 

5  Howell  V.  Schenck,  24  N.  J.  L.  Y.)319.  See  also  Mutual  Life  Ins.  Co. 

(4  Zab.)  89  (1853).  v.  Balch,  4  Abb.  (N.  Y.)  N.  C.  200 

»Butler  V.  Page,48Mass.  (7Metc.)  (1877);  Astor  v.  Turner,  11  Paige 

40,  42  (1843) ;  s.  c.  39  Am.  Dec.  757.  Ch.  (N.  Y.)  436  (1845)  ;  s.  c.  43  Am. 

See  Hele  v.   Bexley,  20  Beav.   127  Dec.  766  ;  Clason  v.  Corley,  5  Sandf. 

(1854) ;  Higgins  v.  York  Buildings  (N.  Y.)  447  (1852) ;  Nichols  v.  Fos- 

Co.,   2  Atk.    107    (1740)  ;     Drum-  ter,  9  N.  Y.  Week.  Dig.  468  (1880) ; 

mond  V.  Duke  of  St.  Albans,  5  Ves.  Taliaferro    v.    Gay,     78     Ky.    4U6 

438  (1800) ;  Colman  v.  Duke  of  St.  (1879). 
Albans,  3  Ves.  25  (1796).     See  ante 
§575. 


I  589.]  EEVERSAIi   ON   APPEAL EFFECT.  709 

The  purchaser  is  generally  not  entitled  to  possession,  nor 
to  the  rents  and  profits,  until  he  has  demanded  such  posses- 
sion under  his  deed.'  Where  a  person  is  in  possession  under 
a  purchase  at  a  former  foreclosure  sale  which  was  not 
confirmed,  he  will  be  entitled  to  the  rents  only  from  the 
date  of  the  confirmation  of  the  report  of  the  last  sale.* 

Where  the  rent  becomes  due  and  payable  between  the 
day  of  sale  and  the  time  when  the  purchaser  becomes 
entitled  to  the  possession,  it  belongs  to  the  owner  of  the  equity 
of  redemption,  and  not  to  the  purchaser  at  the  sale.*  But 
it  may  be  provided  by  statute,  that  where  a  judgment 
debtor  fails  to  redeem,  he  shall  be  liable  to  the  purchaser 
for  the  rent  of  the  premises,  or  for  the  use  and  occupation 
thereof,  from  the  date  of  the  sale.* 

§  589.  Appeal  and  reversal  —  Effect  on  purchaser's 
title. — If  the  court  had  jurisdiction  of  the  parties  and  of  the 
subject  matter  of  the  action  and  power  to  render  a  judg- 
ment, it  will  not  be  a  valid  objection  to  the  title  by  the 
purchaser  at  the  sale  made  under  a  decree  of  foreclosure, 
that  such  judgment  was  erroneous ;'  his  title  will  not  be 
affected  by  any  defects  in  the  proceedings  which  render  the 
judgment  irregular,  and  in  consequence  of  which,  it  may  be 
set  aside  or  reversed.*     But  where  a  sale  is  made  under  a 


'  Mitchell  V.  Bartlett,  51  N.  Y.  Clasoa  v.  Corley,  5  Sandf.  (N.  Y.) 

447  (1873),   aff'g  52  Barb  (N.  Y.)  447  (1852).    See  ante  §  575. 

819  ;  Astor  V.  Turner,  11  Paige  Ch.  «  Gale  v.  Parks,  58  Ind.  117  (1877). 

(N.  Y.)  436  (1845) ;   s.  c.  43  Am.  See  Clements  v.  Kobinson,  54  Ind. 

Dec.  766  ;  Clason  v.  Corley,  5  Sandf.  599  (1876). 

(N.  Y.)  447  (1852).  *  DeForest  v.   Farley,    62  N.  Y. 

'Taliaferro  v.  Gay,  78  Ky.   496  628   (1875);    Storm  v.   Smith,    48 

(1879).     See  Mitchell  v.  Bartlett,  51  Miss.    497    (1871) ;     Armstrong    v. 

N.  Y.  447  (1873),    afE'g  52  Barb.  Humphreys,  5  S.  C.  128(1873). 

(N.  Y.)  319.     See  ante  §  575.  '  Brevoort  v.  Brevoort,  70  N.  Y. 

» Astor  V.  Turner,  11  Paige  Ch.  (N.  136,  140  (1877) ;  DeForest  v.  Farley, 

Y.)  436  (1845);  s.  c.  43  Am.  Dec.  766.  62  N.  Y.  628  (1875).    See  Clemens  v. 

See  Whalin  v.  White,  25  N.  Y.  462  Clemens,  37  N.  Y.   59,  72  (1867) ; 

(1862) ;  Miner  v.  Beekman,  11  Abb.  Packer  v.  Rochester  &  S.  R.  R.  Co., 

(N.  Y.)  Pr.  N.  S.  147  (1871) ;  s.  c.  17  N.  Y.  288  (1858)  ;    Blakeley  v. 

42  How.  (N.  Y.)  Pr.  33  ;  s.  c.  33  N.  Calder,  15  N.Y.  617(1857);  Brainard 

Y.    Supr.    Ct.    (1   J.    &   S.)   67;  v.   Cooper,   10  N.   Y.   359  (1851); 


710  EEVERSAL  ON  APPEAL — EFFECT  ON  TITLE.    [§  589. 


void  decree,  the  purchaser  will  obtain  no  title.'  The  rule  that 
a  purchaser  acquires  a  valid  title,  although  the  decree  may 
be  reversed  on  appeal,  does  not  apply  to  an  interlocutory 
decree  nor  to  a  conditional  order,  even  if  the  conditions  have 
not  been  fulfilled.' 

The  rule  that  a  bona  fide  purchaser  at  a  foreclosure  sale 
will  receive  a  good  title,  although  the  proceedings  were 
erroneous  or  irregular,  holds  good  where  the  purchaser  was 
a  party  to  the  suit,'  even  though  such  purchaser  had  notice 
at  the  time  of  the  sale,  that  an  effort  would  be  made  to  reverse 
the  decree,*  and  though  an  appeal  had  been  taken  from  the 
judgment  at  the  time  of  the  sale,  on  which  the  judgment 
was  subsequently  reversed,  a  stay  of  proceedings  not  having 
been  obtained  pending  such  appeal.* 

It  has  been  held  that  where  a  person,  not  a  party  to  the 
suit,  is  a  purchaser  at  a  foreclosure  sale,  the  law  does  not 
require  him  to  inspect  the  record  and  to  see  that  it  is  free 


Holden  v.  Sackett,  12  Abb.  (N.  Y.) 
Pr.  473  (1861)  ;  McMurray  v.  ]\Ic- 
Murray,  60  Barb.  (N.  Y.)  117,  127 
(1870);  Gaskiu  v.  Anderson,  55 
Barb.  (N.  Y.)  259,  263  (1809)  ;  s.  c. 
7  Abb.  (N.  Y.)  Pr.  K  S.  1,  7; 
Breese  v.  Bange,  2  E.  D.  Smith  (N. 
Y.)  474  (1854) ;  Wood  v.  Jackson,  8 
Wend.  (N.  Y.)  9  (1831);  s.  c.  22 
Am.  Dec.  603  ;  Estate  of  Fenn,  8 
N.  Y.  Civ.  Proc.  Rep.  206,  211  (1885); 
s.  c.  suh  nom.  Price  v.  Fenn,  3  Dem. 
(N.  Y.)  341.  See  also  Alvord  v. 
Beach,  5  Abb.  (N.Y.)  Pr.  451  (1857) ; 
Silleck  V.  Heydrick,  2  Abb.  (N.  Y.) 
Pr.  N.  S.  57  (1866);  Hening  v. 
Punnett,  4  Daly  (N.  Y.)  543  (1873) ; 
Graham  v.  Bleakie,  2  Daly  (N.  Y.) 
55  (1866);  Jordan  v.  VanEpps,  19 
Hun  (N.  Y.)  533  (1880) ;  Herbert  v. 
Smith,  6  Lans.  (JST.  Y.)  493  (1872)  ; 
Minor  v.  Betts,  7  Paige  Cb.  (N.  Y.) 
597  (1839) ;  Coit  v.  McReyuolds,  3 
Robt.  (N.  Y.)  655  (1864)  ;  Darvln  v. 
Hatfield,  4  Sandf.  (N.  Y.)  468  (1851); 
In  re  Luce,  17  N.  Y.  Week.  Dig  35 


(1883) ;  Buckmaster  v.  Carlin,  4  111. 
(3  Scam.)  104  (1841);  Bustard  v. 
Gates,  4  Dana  (Ky.)  429  (1836); 
Gossom  V.  Donaldson,  18  B.  Mon. 
(Ky.)  230  (1857);  Benningfield  v. 
Reed,  8  B.  Mon.  (Ky.)  105  (1848) ; 
Lampton  v.  Usher's  Heirs,  7  B.  Mon. 
(Ky.)  57  (1846) ;  Gray  v.  Brignar- 
dello,  68  U.  S.  (1  Wall.)  627  (1863) ; 
bk.  17  L.  ed.  693  ;  Bank  of  U.  S.  v. 
Voorhees,  1  McL.  C.  C.  221  (1834). 

'  Gossom  V.  Donaldson,  18  B. 
Mon.  (Ky.)  230  (1857);  Storm  v. 
Smith,  43  Miss.  497  (1871). 

*  Gray  v.  Brignardello,  68  U.  S. 
(1  Wall.)  627  (1863) ;  bk.  17  L.  ed. 
693. 

^  Hening  v.  Punnett,  4  Daly  (N. 
Y.)  543  (1873) ;  Splahn  v.  Gillespie, 
48  Ind.  397  (1874);  Gossom  v. 
Donaldson,  18  B.  Mon.  (Ky.)  230 
(1857) ;  s.  c.  54  Am.  Dec.  547. 

<  Irwm  V.  Jeffers,  3  Ohio  St.  389 
(1854). 

'  Hening  v.  Punnett,  4  Daly  (N. 
Y.)  543  (1873). 


§  590.]     DEHV£ELN"G   POSSESSION    TO   PUECHASER.        ,     711 

from  errors ;  he  is  only  required  to  ascertain  that  the  court 
had  jurisdiction,  and  that  there  is  such  a  judgment  or  decree 
unreversed  as  would  authorize  the  sale.  The  supreme 
court  of  Illinois  said  in  the  case  of  Fergus  v.  Woodworth,' 
that  *•  if  such  were  not  the  rule,  no  one  would  become  a 
purchaser  at  a  judicial  sale,  and  all  competition  would  cease, 
and  the  plaintiffs  would  become  the  purchasers  at  their  own 
price.  Stability  and  confidence  must  be  given  to  judicial 
sales  to  the  fullest  extent  compatible  with  the  interests  of 
the  parties,  as  well  the  purchaser  as  the  defendant." 

§  590.     Delivering  possession  of  premises  to  purchaser. 

— A  court  of  equity  has  authority  to  decree  the  possession 
of  land,  where  a  controversy  regarding  the  title  thereto  has 
been  properly  brought  within  its  jurisdiction;'  and  the  law 
will  enforce  its  decree  by  its  officers  for  the  delivery  of 
actual  possession,  whenever  in  pursuance  of  the  decree  such 
possession  ought  to  be  delivered."  The  power  of  a  court 
to  give  possession  to  the  purchaser  at  a  foreclosure  sale 
was  at  one  time  doubted,  but  it  was  finally  exercised  by  the 
court  of  chancery.* 

The  New  York  court  of  appeals  held,  in  the  case  of 
Bolles  V.  Duff,*  that  by  statute  the  court  was  given  power 
over  the  whole  subject,  though  the  act  was  in  a  good 
degree  declaratory.  It  has  been  said  that  a  court  of  equity 
would  fall  short  of  doing  complete  justice,  unless  it  placed 
the  purchaser  at  a  mortgage  foreclosure  sale  in  possession, 
as  well  as  gave  him  a  deed  of  the  premises.  Where  the 
person  ejected  from  the  possession  of'  the  premises  was  a 
party  to  the  suit,  or  came  into  possession  under  a  party  to 
the  suit  pendente  lite,  he  can  make  no  objection  to  such  an 
order.* 


>  44  111.  374.  384  (1867).  *  See  Bolles  v.  Duff,  43  N.  Y.  469, 

'  Kershaw  v.  Thompson,  4  Johns.  473  (1871) ;    s.  c.  41  How.  (N.  Y.) 

Ch.  (N.  Y.)  609  (1820);   Irvine  v.  Pr.    358;    Kershaw  v.  Thompson, 

McRee,    5    Humph.    (Tenn.)    556  4  Johns.    Ch.    (K  Y.)  609  (1820) ; 

(1845) ;   8.  0.  49  Am.  Dec.  468 ;  4  Thompson  v.  Campbell,  57  Ala.  188 

Kent  Com.  184.  (1876). 

»  Valentine  v.  Teller,  Hopk.  Ch.  »  43  N.  Y.  469,  473  (1871). 

^.  Y.)  422  (1825).  •  See  Kershaw  v.  Thompson,    4 


712  DELXVERmQ   POSSESSION"   TO   PURCHASER.     [§591. 

It  may  now  be  regarded  as  well  settled  that  courts  of 
equity,  in  the  exercise  of  their  ordinary  and  general  chancery 
jurisdiction,  where  the  possession  of  real  property  is  involved, 
may,  upon  the  consummation  of  a  suit  to  enforce  a  lien 
thereon,  do  complete  justice  by  putting  a  successful  com- 
plainant into  possession,  if  all  the  persons  in  interest  were 
made  parties  to  the  suit ;  and  that,  on  a  sale  in  proceedings 
to  foreclose  a  mortgage,  or  to  enforce  a  lien,  the  court  may 
extend  the  same  relief  to  a  purchaser  under  the  decree  of 
sale.'     But  there  are  exceptions  to  this  general  rule. 

Thus,  if  a  person,  pending  the  suit,  enters  into  possession 
under  one  who  did  not  derive  his  title  to  the  premises  from  a 
party  to  the  action,  he  can  not  be  turned  out  of  possession 
under  the  decree.  So  in  the  case  of  a  foreclosure  sale,  if  a 
person  in  possession  shows  a  prima  facie  right  thereto 
paramount  to  the  mortgage,  the  court  will  not  attempt 
to  decide  questions  affecting  his  legal  title,  and  the  posses- 
sion must  then  be  sought  by  proceedings  at  law.*  It  has 
been  held  in  Wisconsin,*  that  the  statutory  provision  requir- 
ing that  the  purchaser  at  a  foreclosure  sale  be  let  into 
possession  on  production  of  the  sheriff's  deed,  must  be 
construed  as  defining  the  rights  of  such  purchaser  after 
the  confirmation  of  the  sale.*  It  seems  that  in  some  states 
a  purchaser  at  a  foreclosure  can  not  demand  possession  until 
the  report  of  the  officer  making  the  sale  has  been  confirmed 
by  the  court.'     The  rule  is  different,  however,  in  New  York. 

§  591.     Possession  obtained  by  summary  process.— It 

is  usually  provided  in  every  judgment  of  foreclosure  and 
sale,  that  the  purchaser  be  let  into  possession  on  production 
of  the  deed  of  the  officer  making  the  sale  ;  whether  this 
provision  is  inserted  in  the  judgment  or  not,  the  purchaser 


Johns.  Ch.  (N.  Y.)  609  (1820) ;  Jones  «  Wis.  Rev.  Stat.  3169. 

V.  Hooper,  50  Miss.  514  (1874).    See  <  Welp  v.  Gunther,  48  Wis.  543 

Creighton   v.    Paine,    2    Ala.    159  (1879) ;  Woehler  v.  Endter,  46  Wis. 

(1841).  301  (1879). 

'  Harding   v.   LeMoyne,   114  111.  » Howard  v.  Bond,  43  ilich.  131 

65  (1885).  (1879). 

*  Harding   v.  LeMoyne,  114  HI. 
65  (1885). 


§591.]  POSSESSION  BY   SUMMARY   PEOCESS.  713 

will  be  entitled  to  possession  on  compliance  with  the  terms 
of  the  sale,  and  the  court  will  have  power  to  put  him  in  such 
possession.'  The  purchaser  will  not  be  driven  to  an  action 
at  law  to  obtain  possession.*  The  authority  of  the  court  to 
issue  a  process  and  to  place  the  purchaser  in  possession,  is 
placed  upon  the  ground  that  it  has  power  to  enforce  its  own 
decrees  and  thus  to  avoid  the  circuity  of  vexatious  litigation.* 

But  where  a  party  in  possession  was  not  a  party  to  the 
foreclosure,  and  did  not  acquire  his  possession  from  a  person 
who  was  bound  by  the  decree,  but  who  is  a  mere  stranger 
and  who  entered  into  possession  before  the  suit  was  begun, 
the  court  will  have  no  power  either  under  the  statute  or 
independently  of  it  to  deprive  him  of  possession  by  enforc- 
ing the  decree.*  A  person  obtaining  possession  by  a 
legal  proceeding  under  a  claim  of  right,  will  not  be  sum- 
marily dispossessed  by  an  enforcement  of  the  decree  of 
foreclosure  adverse  to  a  party  to  the  suit,  the  proceedings 
having  been  commenced  prior  to  the  filing  of  the  bill  of 
foreclosure,  and  he  not  being  a  party  to  the  foreclosure.* 

And  a  tenant  in  possession,  who  became  such  after 
the  commencement  of  the  suit,  where  he  holds  under 
a   person    not   a   party  to  the   suit,    who  was  lawfully   in 


'  Ludlow  V.  Lansing,  Hopk.  Ch.  Skinner  v.  Beatty,  16  Cal.  156  (1860); 

(N.  Y.)  231  (1824) ;  Dyer  v.  Kopper,  Trabue  v.  Ingles,  6  B.  Hon.  (Ky.)  82 

59  Vt.  477  (1887) ;  6.  C.  4  N.  Eng.  (1845) ;  Schenck  v,  Conover,  13  N. 

Rep.   368,   371.      See  Valentine  v.  J.  Eq.  (2  Beas.)  220  (1860). 

Teller,  Hopk.  Ch.  (N.  Y.)  422  (1825);  »  Ludlow  v.  Lansing,  Hopk.  Ch. 

Yates  V.  Hambly,  2  Atk.  360  (1742).  231    (1824) ;  Jones    v.   Hooper,   50 

» Ludlow  V.  Lansing,  Hopk.  Ch.  Miss.  514  (1874). 
(N.  Y.)  231  (1824) :  Kershaw  v.  *  Meiggs  v.  Willis,  8  N.  Y.  Civ. 
Thompson,  4  Johns.  Ch.  (N.  Y.)  609  Proc.  Rep.  125  (1885) ;  Boynton  v. 
(1820).  See  YanHook  v.  Throck-  Jackway,  10  Paige  Ch.  (N.  Y.)  307 
morton,  8  Paige  Ch.  (N.  Y.)  33  (1843) ;  VanHook  v.  Throckmorton, 
(1839) ;  Frelinghuysen  v.  Colden,  8  Paige  Ch.  (N.  Y.)  33  (1839) ;  Fre- 
4  Paige  Ch.  (N.  Y.)  204  (1833) ;  Suf-  linghuysen  v.  Colden,  4  Paige  Ch. 
fern  v.  Johnson,  1  Paige  Ch.  (N.  Y.)  (N.  Y.)  204  (1833) ;  Kessinger  v. 
450(1829);s.  C.  19Am.Dec.440;Mc-  Whlttaker,  82  HI.  22  (1876);  Ben- 
Gown  V.  Wilkins,  1  Paige  Ch.  (N.  Y.)  hard  v.  Darrow,  Walk.  Ch.  (Mich.) 
120  (1828);  Creighton  v.  Paine,  2  Ala:  519  (1844). 

158  (1841);  Bright  v.  Pennywhit,  21  '  Frelinghuysen  v.  Colden,  4  Paige 

Ark.  130  (1860) ;  Horn  v.  Volcano  Ch.  (N.  Y.)  204  (1833). 
"Water  Works,  18  Cal.  141  (1861) ; 


Tl4  OBTAINING    POSSESSION.  [§§  592 -OOo. 

possession  under  a  claim  hostile  to  that  derived  under  the 
mortgage,  will  not  be  dispossessed,  although  made  a  party 
to  the  suit  for  the  purpose  of  barring  an  interest  held 
by  his  wife  in  other  premises  covered  by  the  mortgage, 
of  which  he  was  in  possession  and  which  he  had  delivered 
up  in  pursuance  of  the  decree.'  But  where  a  person  comes 
into  possession  pendente  lite  through  a  party  to  the  suit,  he 
will  be  bound  by  the  decree  in  the  same  manner  as  the  party 
whom  he  succeeds.* 

§  592.    Provisions  of  Code  for  obtaining  possession. — 

It  is  provided  by  the  New  York  Code  of  Civil  Procedure,' 
that  where  a  judgment  in  an  action  relating  to  real  property, 
allots  to  any  person  a  distinct  parcel  of  land,  or  contains  a 
direction  for  the  sale  of  real  property,  or  confirms  such  an 
allotment  or  sale,  it  may  also,  except  in  a  case  where  it  is 
expressly  prescribed  that  the  judgment  may  be  enforced  by 
execution,  direct  the  delivery  of  the  possession  of  the  prop- 
erty to  the  person  entitled  thereto.  If  a  party  or  his 
representative,  who  is  bound  by  the  judgment,  withholds 
possession  from  a  person  thus  declared  to  be  entitled 
thereto,  the  court,  besides  punishing  the  disobedience  as  a 
contempt,  may,  in  its  discretion,  by  order,  require  the  sheriff 
to  put  that  person  into  possession.  Such  an  order  must  be 
executed,  as  if  it  were  an  execution  for  the  delivery  of  the 
possession  of  the  property. 

§  593-    Writ  of   assistance — When   granted. — It   was 

held  in  the  recent  case  of  Dyer  v.  Kopper,*  that  the  execu- 
tion of  a  decree  of  foreclosure  giving  possession,  can  be  made 
by  a  summary  process.  A  writ  of  assistance  is  an  appropriate 
process  to  issue  from  a  court  of  equity,  to  place  a  purchaser 
of  mortgaged  premises  in  possession  under  its  decree  of 
sale,  after  he  has  received  the  deed  of  the  officer  making 
the  sale,  as  against  parties  who  are  bound  by  the  decree, 


«  New  York  Life  Ins.  &  Trust  Co.  »  §  1675. 

V.  Cutler,  9  How.  (N.  Y.)  Pr.  407  ♦  59  Vt.  477,  489  (1887) ;  B.  c.  4  N. 

(1853).  Eng.  Rep.  471.   See  Ludlow  v.  Lans- 

*  Kessinger  v.  Whittaker,  83  III.  ing,  Hopk.  Ch.  (N.  Y.)  231  (1824). 
22  (1876). 


§594.]     WRIT  OF  ASSISTANCE WHEN   GKAinED.  715 

and   who  refuse  to  surrender  possession  pursuant  to  the 
directions  of  the  court.* 

After  a  purchaser  has  complied  with  the  terms  of  the  sale,' 
and  has  obtained  his  deed  from  the  officer  making  the 
sale,*  if  the  possession  is  wrongfully  withheld  from  him  in 
disobedience  of  the  decree  of  the  court,  he  will  be  entitled 
to  a  writ  of  assistance,  on  proof  that  he  has  exhibited  his 
deed  to  the  person  in  possession  and  demanded  the  posses- 
sion of  the  premises.*  Some  of  the  cases  hold  that  a  notice 
of  the  application  for  a  writ  of  assistance  should  first  be  given 
to  the  defendant  and  also  to  the  tenant  of  the  premises,  if 
there  is  one.*  But  it  would  seem,  according  to  the  current 
of  authorities,  that  a  notice  of  the  application  is  unnecessary.* 

§  594.  Writ  of  assistance — How  obtained. — Where  the 
original  decree  of  foreclosure  does  not  contain  an  order  for 
the  surrender  of  the  premises  to  the  purchaser,  a  writ  of 
assistance  can  not  be  granted  until  such  an  order  for  the 
possession  of  the  premises  has  been  obtained  upon  notice 
to  the  party  occupying  the  property  after  a  demand  for  the 
possession/  A  proceeding  by  a  purchaser  at  a  foreclosure 
sale  to  obtain  a  writ  of  assistance  by  motion,  is  not  the 


>  Kershaw  v.  Thompson,  4  Johns.  4  111.  (3  Scam.)  261  (1841) ;  Watkina 

Ch.  (N.  Y.)  609  (1820) ;  Terrell  v.  v.   Jerman,    36   Kan.    464   (1887) ; 

Allison,   88  U.   S.    (21   Wall.)  291  Woehler  v.   Endter,  46    Wis.    301 

(1874) ;  bk.  22  L.  ed.  635.  (1879). 

'  Battershall  v.   Davis,  23   How.  '  Devaucene  v.  Devaucene,  1  Edw. 

(N.  Y.)  Pr.  383  (1861) ;  Armstrong  Ch.  (N.  Y.)  272  (1832). 
V.  Humphries,  5  S.  C.  128  (1873).  •  Valentine  v.  Teller,   Hopk  Ch, 

•Bennett  v.  Matson.  41   111.  332  (N.  Y.)  422  (1825) ;  Lyndev.  O'Don 

(1866).      See  Howard  v.  Bond,  42  nell,  21  How.  (N.  Y.)  Pr.  39  (1861) 

Mich.  131  (1879).  8.   c.   12    Abb.   (N.  Y.)   Pr.   291 

*  Kershaw  v.  Thompson,  4  Johns.  New  York  Life  Ins.  «&  Trust  Co.  v 

Ch.  (N.  Y.)  609  (1830) ;  VanHookv.  Rand,  8  How.  (N.  Y.)  Pr.  35,  352 

Throckmorton,  8  Paige  Ch.  (N.  Y.)  (1853);  Kershaw  v.  Thompson,  4 

33  (1839) :  Frelinghuysen  v.  Colden,  Johns.  Ch.  (N.  Y.)  609  (1820) ;  Dove 

4  Paige  Ch.   (N.    Y.)  204  (1833)  ;  v.  Dove,  1  Bro.  Ch.  376  (1784) ;  s.  c. 

Montgomery  v.  Tutt,   11   Cal.   190  2  Dick.  617  ;  Huguenin  v.  Baseley, 

(1858)  ;  O'Brian  v.  Fry,  82  111.  87  15  Ves.  180  (1808). 
(1876) ;  Kessinger  v.  Whittaker,  82  '  Lynde  v.    O'Donnell,    12  Abb. 

HI.  22  (1876);   Oglesby   v.  Pearce,  (N.   Y.)  Pr.   286  (1861);    s.   c.   21 

68  ni.  220  (1873) ;  Aldrich  v.  Sharp,  How.  (N.  Y.)  Pr.  84  ;   N.  Y.  Lif« 


716  WRIT    OF    ASSISTANCE.  [§  594. 

institution  of  a  new  suit,  but  is  only  a  supplementary  step  in 
the  action  for  foreclosure.'  Recourse  to  an  action  at  law  to 
obtain  possession  will  not,  however,  be  precluded  thereby  : 
both  remedies  may  be  pursued  at  the  same  time  without 
mutual  interference,  until  possession  is  obtained." 

A  purchaser  under  a  decree  of  foreclosure  will  not  be 
entitled  to  a  writ  of  assistance  to  turn  the  occupant  of  the 
premises  out  of  possession,  even  though  such  person  went 
into  possession  pendente  lite,  unless  he  did  so  under  and  by 
permission  of  some  party  to  the  action,*  for  a  writ  of  assis- 
tance will  be  proper  only  where  a  party  who  is  bound  by 
the  decree  of  foreclosure,  refuses  to  give  up  possession  on 
request ;  and  it  should  not  be  granted  without  proper  proof 
of  such  refusal,  after  the  right  of  possession  has  been  estab- 
lished.* 

Where  a  tenant  is  in  possession,  the  deed  executed  by 
the  officer  making  the  sale  should  be  exhibited  to  him 
by  the  purchaser,  when  he  makes  a  demand  for  possession, 
and  in  case  of  his  refusal  to  give  possession,  no  notice  of  the 
application  to  the  court  for  a  writ  of  assistance  need  be 
given.*  If  a  person  in  possession  is  not  a  party  to  the  suit, 
but  has  come  into  possession  of  the  mortgaged  premises 
since  the  action  was  commenced,  a  writ  of  assistance  will 
not  be  granted  on  refusal  to  deliver  possession  to  the 
purchaser  on  production  of  the  referee's  deed,  unless  notice 
of  the  application  for  such  writ  has  been  served  upon  him.* 
But  as  against  a  person  who  was  a  party  to  the  suit,  a  writ 


Ins.  «&  Trust  Co.  v.  Rand.  8  How.  33  (1839).     See  Ludlow  v.  Lansing, 

(N.  Y.)  Pr.  35,  352  (1853).     See  Kes-  Hopk.    Ch.    (N.    Y.)    231    (1824); 

singer  v.  Whittaker,  83  111.  22(1876);  Thompson  v.  Campbell,  57  Ala.  189 

Ballingerv.  Waller,  9  B.  Mon.  (Ky.)  (1876) ;  McChord  v.  McClintock,  5 

67    (1848);    Benhard    v.    Darrow,  Litt.  (Ky.)  304  (1324). 

Walk.  Ch.  (Mich.)  519  (1844).  "Howard  v.  Bond,  42  Mich.  131 

'Kessinger  v.  W^hittaker,  82  HI.  (1879). 

«2  (1876).  6  N.  Y.  Life  Ins.  &  Tf.st  Co.  v. 

»  Kessinger  v.  Whittaker,  82  111.  Rand,  8  How.  (N.  Y.)  Pr.  35,  352 

«2    (1876) ;     Haynes    v.    Meek,    14  (1853).     But  see  Fackler  v.  Worth, 

Iowa,  320  (1862).  13  N.  J.  Eq.  (2  Beas.)  395  (1861). 

*  Boynton  v.    Jackway,  10  Paige  *  Benhard  v.  Darrow,  Walk.  Ch. 

Ch.  (N.  Y.)  307  (1843) ;  VanHook  v.  (Mich.)  519  (1844). 
Throckmorton,  8  Paige  Ch.  (N.  Y.) 


§595.]     AGAINST   WHOM   POSSESSION   DELIVERED.  717 

of  assistance  may  issue  ex  parte,^  It  seems,  however,  that 
one  who  has  come  into  possession  pendente  lite  will  be 
entitled  to  a  notice  of  the  motion.* 

In  all  cases  of  resistance  by  the  occupants,  the  proper 
method  of  putting  the  purchaser  into  possession  is  by  means 
of  a  writ  of  assistance  ;  it  may  be  issued  upon  proof  of  the 
service  of  the  order  to  deliver  possession  and  of  a  refusal  to 
comply  with  such  order.* 

§  595*  Against  whom  possession  delivered. — Under  a 
decree  of  foreclosure  of  mortgaged  premises  the  court  will 
award  a  writ  of  assistance  and  give  possession  to  the 
purchaser,  as  against  all  persons  who  were  parties  to  the  suit 
or  who  came  into  possession  under  any  of  them  while  the 
suit  was  pending.*  But  the  court  will  not  undertake  to 
remove  persons  who  went  into  possession  after  the  pur- 
chaser had  received  his  deed  and  conveyed  the  premises  to 
another.*  A  person  who  enters  into  possession  fifteen 
months  after  the  sale  ran  not  be  regarded  as  having  entered 
pending  the  suit.* 

Possession  may  be  given  to  a  purchaser  as  against  a 
person  who  was  not  a  party  to  the  suit,  if  he  took  possession 
after  the  commencement  of  the  action  in  collusion  with  the 
mortgagor,  though  under  a  claim  of  tax  title  ;^  but  the  court 
wiU  not  grant  a  writ  of  assistance  as  against  a  person  who 


»  N.  Y.  Life  Ins.  &  Trust  Co.  v.  ••  Bell  v.   Birdsall,   19  How.  (N. 

Cutler,   9  How.   (N.   T.)   Pr.    407  T.)  Pr.  491  (1860);  s.  c.  mh  nom. 

(1853);   N.   Y.   Life  Ins.   &  Trust  Betts  v.  Birdsall,  11  Abb.  (N.  Y.) 

Co.  V.  Rand,  8  How.  (N.  Y.)  Pr.  Pr.   222 ;    Kessinger  v.  WWttaker, 

85,  352  (1853).  82  111.  22  (1876). 

•  Benhard  v.  Darrow,  Walk.  Ch.  *  Bell  v.  Birdsall,   19  How.   (N. 

(Mich.)  519(1844);   Commonwealth  Y.)  Pr.  491  (1860);  8.  c.  sub  nom. 

V.  Ragsdale,  2  Hen.  &  Mun.  (Va.)  8  Betts  v.  Birdsall,  11  Abb.  (N.  Y.) 

(1807).  But  see  Lynde  v.  O'Donnell,  Pr.  222. 

12  Abb.  (N.  Y.)  Pr.  286  (1861);  s.  a  *  BeU  v.  Birdsall,   19  How.   (N. 

21  How.  (N.  Y.)  Pr.  34.  Y.)  Pr.  491  (1860) ;   8.  c.  sub  nom. 

»  Valentine  v.  Teller,  Hopk.  Ch.  Betts  v.  Birdsall,  11  Abb.  (N.  Y.) 

422  (1825);  Ballinger  v.  Waller,  9  Pr.  222. 

B.   Mon.  (Ky.)  67  (1848) ;   Hart  v,  •  Brown  v.  Marzyck,  19  Fla.  840 

Lindsay,  Walk.   Ch.   (Mich.)    144  (1883). 
(1843);  Schenck  v.  Conover,  18  .N. 
J.  Eq.  (2  Beas.)  220  (I860). 


718  T7KIT  OF  ASSISTANCE TO  WHO^I.    [§§  596-507. 

entered  pending  the  suit  under  an  adverse  claim  of  title  and 
without  the  consent  or  collusion  of  the  mortgagor.'  And 
a  party  who  enters  pending  the  suit  will  not  be  turned  out 
of  possession  under  the  decree  of  foreclosure,  if  he  did  not 
enter  under  a  party  to  the  suit  or  under  some  one  who 
derived  title  to  the  premises  from,  or  had  gone  into  posses- 
sion with  the  permission  of,  a  party  to  the  action.* 

The  ordinary  rule  in  regard  to  the  execution  of  a  writ  of 
assistance  for  possession  is,  that  the  purchaser  must  be  put 
in  full  and  complete  possession  ;  that  the  possession  to  be 
given  by  a  sheriff  is  a  full  and  actual  possession  ;  and  that 
where  the  purchaser  is  put  into  possession  under  circumstances 
plainly  indicating  that  such  possession  will  be  but  momen- 
tary, and  he  is  accordingly  ousted  the  same  day,  such 
execution  of  the  writ  will  be  insufficient ;  the  writ  of  posses- 
sion will  not  be  regarded  as  properly  executed  until  the 
sheriff  and  his  officers  have  gone  and  the  purchaser  is  left 
in  quiet  and  settled  possession.* 

§  596.  Who  entitled  to  writ  of  assistance.— The  pur- 
chaser at  a  sale  made  under  a  mortgage  foreclosure  is, 
of  course,  entitled  to  a  writ  of  assistance ;  and  it  has 
been  held  that  the  assignee  or  grantee  of  the  purchaser  is 
entitled  to  the  same  remedy,  on  the  further  proof  that  tlie 
deed  from  the  purchaser  to  him  has  also  been  exhibited  to 
the  party  in  possession.* 

§  597.  Writ  of  assistance  improperly  granted. — Where 
a  writ  of  assistance  which  was  improperly  granted,  has  been 
executed,  or  having  been  properly  granted,  persons  not 
properly  within  the  meaning  of  its  terms,  have  been 
aggrieved  by  having  it  executed  against  them,  the  court, 
upon  motion,  will  be  bound  to  correct  the  wrong ;  and   the 


1  VanHook  v.  Throckmorton,  8  20  (1886) ;  8.  c.  1  N.  Y.  St.  Rep. 
Paige  Ch.  (N.  Y.)  33  (1839).  666,  reversing  29  Hun  (N.  Y.)  204. 

2  VanHook  v.  Throckmorton,  8  *  N.  Y.  Life  Ins.  &  Trust  Co.  v. 
Paige  Ch.  (N.  Y.)  33  (1839);  Freling-  Rand,  8  How.  (N.  Y.)  Pr.  35 
huysen  v.  Golden,  4  Paige  Ch.  (N.  (1853). 

Y.)  204  (1833). 
» Newell  V.  Whigham,  103  N.  Y. 


§§  598-599.]         WRIT  OF  assistance.  719 

persons  dispossessed  under  such  writ  are  entitled  to  have 
the  possession  restored  to  them.* 

Where  a  writ  of  assistance  in  favor  of  a  purchaser  at  a 
mortgage  foreclosure  sale  is  issued  upon  notice  against 
a  tenant  in  possession  of  the  mortgaged  premises,  and  is 
executed  by  placing  the  purchaser  in  possession  thereof, 
it  will  be  conclusive  upon  the  tenant  and  the  purchaser  as 
to  the  right  of  possession.  If  the  tenant  had  any  defence 
against  the  writ,  such  defence  should  have  been  presented 
upon  the  hearing  of  the  motion  for  the  writ ;  the  question 
whether  the  writ  was  properly  awarded  can  not  be  reviewed 
in  another  action  in  another  court.* 

§  598.  Writ  against  tenants  in  possession. — It  has 
been  said  that  the  foreclosure  of  a  mortgage  and  a  sale 
thereunder  of  the  demised  premises  pursuant  to  a  decree, 
extinguishes  the  title  of  the  mortgagor  and  also  the  rights  of 
his  lessee.*  But  where  tenants  in  possession  of  the  mort- 
gaged premises  have  not  been  made  parties  to  the  suit,  the 
purchaser  will  not  be  entitled  to  possession  as  against  them  ; 
but  if  they  are  made  parties,  they  will  be  bound  to  attorn  to 
the  purchaser  or  be  removed  by  a  writ  of  assistance,  notwith- 
standing the  fact  that  they  claim  under  an  unexpired  lease 
executed  by  the  mortgagor  for  a  term  of  years  prior  to  the 
date  of  the  mortgage  foreclosed.* 

§  599-  Writ  of  assistance  not  granted  against  holder 
of  paramount  title. — Where,  on  application  for  a  writ  of 
assistance  by  a  purchaser  at  a  sale  under  a  decree  of  fore- 
closure, the  party  in  possession  claims  to  hold  the  premises 
under  a  lease  executed  before  the  execution  of  the  mortgage 
under  which  the  sale  is  made,  the  court  will  not  grant  a  writ 
of  assistance  at  the  instance  of  such  purchaser.*     In  all  cases 


>  Meiggs  V.  Willis,  8  N.  T.  Civ.  Thompson,  4  Johns.  Ch.  (N.  T.)609 

Proc.  Rep.  125  (1885) ;  Chamberlain  (1820). 

V.  Chloes,  35  N.  Y.  477  (1866).  *  Lovett     v.      Gterman     Reform 

»  Rawiszer  v.  Hamilton,  51  How.  Church,   9  How.    (N.  T.)  Pr.  220 

(N.  T.)  Pr.  297  (1875).  (1853). 

«  Smith  V.  Cooley,  5  Daly  (N.  T.)  *  Thomas  v.  DeBaum,  14  N.  J. 

401,  409  (1874) ;  Simers  v.  Saltus,  3  Eq.  (1  McCart.)  37  (1861). 
Den.  (N.  T.)  216  (1846);  Kershaw  v. 


720         posbJ^ysio:^  AUAi.NST  pahajiount  titlk    [§  GOO. 

where  the  person  in  possession  shows  a  right  paramount  to 
the  mortgage,  the  court  will  not  attempt  to  decide  any  ques- 
tions of  legal  title,  and  the  purchaser  will  be  obliged  to  seek 
possession  by  proceedings  at  law.' 

Where  a  purchaser  enters  into  an  arrangement  with  the 
mortgagor  subsequently  to  the  sale,  whereby  the  mortgagor 
remains  in  possession,  he  will  be  deemed  in  possession  under 
such  contract,  and  not  as  a  defendant  to  the  foreclosure 
suit,  and  the  purchaser  will  not  be  entitled  to  a  writ  of 
assistance  to  put  himself  in  possession  of  the  premises  ;  he 
will  then  be  left  to  his  remedy  by  an  action  at  law  for  eject- 
ment or  otherwise.'  It  is  held  that  the  granting  of  a  writ  of 
assistance  to  put  a  purchaser  into  possession  of  the  premises 
rests  in  every  case  in  the  sound  discretion  of  the  court  ;  and 
that  in  all  cases  of  doubtful  right,  the  possession  will  be 
left  to  legal  adjudication.* 

§  600.     Summary  proceedings  under  New  York  Code. 

— By  a  provision  of  the  New  York  Code  of  Civil  Procedure,* 
the  remedy  by  summary  proceedings  to  obtain  possession  of 
premises  in  mortgage  foreclosures,  is  restricted  to  those  cases 
where  the  foreclosure  is  conducted  by  advertisement  and 
not  by  an  equitable  action 


*  Schenck  v.  Conover,   13  N.   J.  •  McKomb  v.  Kankey,  1  Bland. 

Eq.   (2  Beas.)  220  (1860).    See  Mc-  Ch.  (Md.)  363  (1807),  note  C.     See 

Kombv.  Kankey,  1  Bland.  Ch.  (Md.)  Thomas  v.  DeBaum,  14  N.  J.  Eq. 

363  (1807),  note  C.  (1  McCart.)  37  (1861). 

«  Toll  V.  Hiller.  11  Paige  Ch.  (N.  *  §  2233. 
Y.)  228  (1844). 


CHAPTER   XXIX.  i 

JUDGMENT  FOR  DEFICIENCY. 

REPORTING    DEFICIENCY— WHO    LIABLE    FOR— LIABILITY  ON  BOND- 
GUARANTY    AND    ASSUMPTION  —  INTENTION    OF   PARTIES 
GOVERNS— HOW  AMOUNT  OF  DETERMINED— EXECU- 
TION FOR— JSnSCELLANEOUS  MATTERS. 


601.  Generally. 

602.  Referee  conducting  sale  re- 

porting deficiency. 

603.  Contingent  decree  for  defi- 

ciency. 

604.  Power  of  court  of  chancery 

to    decree    judgment    for 
deficiency. 

605.  Judgment     for     deficiency 

against  mortgagor. 

606.  Judgment      for     deficiency 

against  third  persons. 

607.  Deficiency    against  assignor 

guaranteeing  payment. 

608.  Deficiency  against  party  as- 

suming mortgage. 

609.  Mortgaged  premises  primary 

fund — Subsequent  liability. 

610.  Assumption  of    mortgage — 

Defence  by  grantee. 

611.  Assumption  of    mortgage — 

When    grantee    not    liable 
for  deficiency. 


§  612.  Release    from    liability    on 
assumption. 

613.  No  liability  where  deed  sub- 

ject to  mortgage. 

614.  Oral  contract  of  assumptioa 

may  be  enforced. 

615.  Intention    of    parties    deter- 

mines question  of  assump- 
tion. 

616.  No  judgment  for  deficiency 

against  non-resident. 

617.  No  judgment  for  deficiency 

for    in^itallments    not    yel 
due. 

618.  Deficiency— How  determined. 

619.  When    judgment    for    defi- 

ciency may  be  docketed. 

620.  When    judgment    for    defi- 

ciency becomes  a  lien. 

621.  Execution  for  deficiency. 

622.  Miscellaneous    matters    con- 

nected with  judgments  for 
deficiency. 


§  6oi.  Generally. — All  proceedings  to  collect  any  defi- 
ciency arising  on  the  sale  of  mortgaged  premises  under  a 
foreclosure  are  purely  statutory.'  The  statute,  authorizing 
a  judgment  of  deficiency  in  an  action  for  foreclosure  in  New 
York,  was  enacted  to  avoid  the  necessity  of  a  separate  action 
at  law,  and  to  enable  one  court  to  dispose  of  the  whole  case.* 


'  McCrickett  v.  Wilson,  50  Mich.       missible    without    filing    a    bill    of 
513  (1883).     In  this  case  it  was  held      review. 

that  a  petition  to  set  such  proceed-  *  Scofield    v.    Doscher,  72  N.  Y. 

ings  aside  for  want  of  notice  was  per-      491(1878);  Equitable  Life  Ins.  Co. 

721  (46) 


722  JUDGMENT    OF   DEFICIENCY.  [§  602. 

lu  most  of  the  states,  statutes  have  been  enacted  for  the 
regulation  of  mortgage  foreclosures,  giving  power  to  the  court, 
not  only  to  direct  the  sale  of  the  mortgaged  premises  and  to 
compel  the  delivery  of  the  possession  thereof  to  the  pur- 
chaser, but  also  to  adjudge  payment  by  the  mortgagor  or 
by  any  other  person  liable  for  the  debt  of  any  deficiency  that 
might  remain  unsatisfied  after  the  sale  of  the  mortgaged 
premises,  and,  as  in  other  actions,  to  issue  the  necessary 
execution  upon  such  judgment  of  deficiency.' 

Without  statutory  authority  such  an  execution  could  not 
be  issued  in  a  foreclosure  against  the  property  of  the  mort- 
gagor or  other  person  liable  for  the  deficiency  remaining 
unsatisfied  after  the  application  of  the  proceeds  of  the  sale 
to  the  payment  of  the  mortgage  debt.'  An  action  at  law  was 
formerly  the  only  remedy  for  the  recovery  of  such  deficiency. 

§  602.    Referee  conducting  sale  reporting  deficiency. — 

The  referee  conducting  the  sale  in  a  mortgage  foreclosure,  is 
usually  required  to  report  any  deficiency  remaining  unpaid 
after  the  sale  of  the  property  and  the  application  of  the 
proceeds  thereof  to  the  payment  of  the  debt.  The  referee 
should  ascertain  the  amount  of  the  deficiency,  and  also  the 
names  of  the  parties  who  are  liable  for  its  payment,  and 
state  these  facts  in  his  report  to  the  court ;  a  direction  to 
the  referee  to  report  such  facts  should  be  included  in  the 
decree  of  sale.* 

A  referee's  report  of  sale,  which  shows  that  the  appar- 
ent  deficiency   is   produced   entirely   by  the  unauthorized 


V.   Stevens,   63  N.  T.   341  (1875);  «  Stark  v.  Mercer,  4  Miss.  (3  How.) 

Thorne  v.  Newby,  59  How.  (N.  Y.)  377  (1839) ;    FlemiBg  v.    Sitton,    1 

Pr.  120  (1880).  Dev.  &  B.  (N.  C.)  Eq.  621  (1837) ; 

>  N.  Y.  Code  Civ.  Proc.  §  1627  ;  Waddell  v.  Hewitt,  2  Ired.  (N.  C.) 

Florida    Code    (Busli's    Dig.)    849  Eq.  253  (1843) ;  Orcliard  v.  Hughes, 

(1872) ;  North  Carolina  Code,  §  190  ;  68  U.  S.  (1  Wall.)  73  (1863) ;  bk.  17 

Wisconsin  Rev.   Stat.,  §3156.     See  L.  ed.  560.     But  see  Wightman  v. 

Equitable  Life  Ins.  Co.  v.  Stevens,  Gray,    10  Rich.    (S.    C.)    Eq.    518 

63  N.  Y.  341  (1875) ;  Thorne  v.  New-  (1859).     See  ante  §§  195-199. 

by,  59  How.  (N.  Y.)  Pr.  120  (1880);  »  McCarthy  v.  Graham,  8  Paige 

Jarman  v.  Wiswall,  24  N.  J.  Eq.  (9  Ch.  (N.  Y.)  480  (1840). 
C.  E.    Gr.)  267  (1873).     See  ante 
§  195  ei  scq. 


§  603.]       C0NTINGE2TT   DECEEE   FOR   DEFICIENCY.  723 

allowance  of  a  claim  to  the  purchaser,  is  to  be  treated  as  not 
reporting  any  deficiency.' 

§  603.  Contingent  decree  for  deficiency. — The  plaintiff 
in  an  action  to  foreclose  a  mortgage  can  not  have  a  personal 
judgment  against  any  of  the  defendants  prior  to  the  final 
decree  of  foreclosure  and  sale.'  The  correct  practice  is,  to 
make  a  contingent  judgment  in  the  decree  of  foreclosure  and 
sale  for  the  payment  of  any  deficiency  which  may  appear 
upon  the  coming  in  and  the  confirmation  of  the  report  of  sale, 
and  that  the  plaintiff  have  execution  therefor.*  An  execu- 
tion can  not  be  issued  until  the  deficiency  has  been  ascer- 
tained from  the  report  of  sale.*  Where  the  person  adjudged 
in  the  decree  to  be  liable  for  the  deficiency,  has  not 
appeared  in  the  case,  it  is  the  practice  in  New  Jersey,  after 
ascertaining  the  amount  of  such  deficiency,  to  award  execu- 
tion therefor  ex  parte!" 

The  deficiency  for  which  a  mortgagor  is  liable,  is  ascer- 
tained by  deducting  the  proceeds  of  the  sale  from  the 
amount  due  on  the  mortgage  for  principal  and  interest,, 
together  with  the  costs  and  all  taxes  and  assessments.*  In 
a  case  where  the  decree  of  sale  directed  that  the  mortgagor,, 
or  other  party  personally  liable  for  the  debt,  should  pay  any' 
deficiency  arising  on  the  sale,  the  property  was  struck  off  for 
enough  to  satisfy  the  mortgage,  but  the  purchaser  refused 
to  complete  the  sale  ;  an  order  requiring  him  to  do  so 
was  obtained,  but  was  not  enforced ;  the  plaintiff,  with- 
out proceeding  against  him  for  contempt,  procured  an 
order  for  a  resale,  and  upon  the  second  sale  there  was  a 
deficiency ;  it  was  held  that  the  mortgagor,  or  other  party 


'  Bache  v.  Doscher,  67  K  Y.  429  10  Paige  Ch.  (N.  Y.)  115  (1843) ; 

(1876),  aff'g  41  N.  Y.  Supr.  Ct.  (9  J.  Howe    v.    Lemon,    37    Mich.    164 

&  S.)  150.     See  ante  §  204.  (1877). 

2  Cobb  V.  Thornton,  8  How.  (N.  *  White  v.   Zust,    28  N.   J.    Eq. 

Y.)  Pr.  66  (1852).  (1  Stew.)  107  (1877). 

8  Cobb  V.  Thornton,  8  How.  (N.  «  Marshall  v.  Davies,  78  N.  Y.  414 

Y.)  Pr.    66    (lb52) ;    McCarthy   v.  (1879),  reversing  16  Hun  (N.  Y.)  606. 

Graham.  8  Paige  Ch.  (N.  Y.)  480  See  also  Mitchell  v.  Bowue,  63  How. 

(1840).     See  ante  §§  202-204.  (N.  Y.)  Pr.  1  (1881) ;   s.  c.  14  N.  Y. 

*  Bank  of  Rochester  v.  Emerson,  Wk.  Dig.  234.      See  ante  S  204. 


724  JUDGMENT   FOR    DEFICIENCY.      [§§  604-605. 

liable  for  the  debt,  was  personally  liable  for  the  deficiency 
arising  on  the  resale.' 

The  deficiency  contemplated  by  the  Code'  has  been  held 
to  be  only  the  deficiency  arising  upon  an  actual  sale  under  a 
foreclosure  of  the  mortgage,  and  not  the  deficiency  caused  to 
a  second  mortgagee  by  a  sale  under  a  prior  mortgage  ;  in  the 
latter  case  the  remedy  would  be  by  an  action  on  the  bond.' 

§  604.  Power  of  court  of  chancery  to  decree  judgment 
for  deficiency.  —  In  the  absence  of  statutory  provisions 
giving  it  authority,  a  court  of  equity  possesses  no  power  to 
give  a  lien  upon  or  to  sequestrate  any  other  property  of  the 
mortgagor  as  an  additional  security,  until  the  property 
described  in  the  mortgage  has  been  exhausted  ;*  for  that 
reason,  it  can  not  decree  the  payment  of  any  deficiency 
remaining  after  the  application  of  the  proceeds  of  the  sale  of 
the  mortgaged  premises  to  the  payment  of  the  debt,unless  the 
court  of  chancery  would  have  had  jurisdiction  to  enforce  the 
debt  without  the  mortgage.* 

Thus,  where  no  note,  bond,  mortgage  or  other  legal  obli- 
gation, was  given  to  secure  the  payment  of  the  debt,  or,  if 
given,  had  been  lost,  a  court  of  equity  could,  in  some  states, 
enforce  its  payment  as  an  equitable  claim  against  the  mort- 
gagor, by  a  personal  judgment  for  the  balance  remaining 
unsaLisfie'^  after  the  sale  of  the  premises.' 

§  605.    Judgment  for  deficiency  against  mortgagor.— 

On  the  foreclosure  of  a  mortgage  by  the  mortgagee,  the 


>  Goodwin  v.  Simonson,  74  N.  Y.  Davie,  4  J.  J.  Marsh.  (Ky.)  70(1830); 

133(1878).  Downing    v.    Palmateer,   1    T.    B. 

2  N.  Y.  Code  Civ.  Proc.  §  1627.  Mon.    (Ky.)    64    (1824) ;     Stark  v. 

3  Loeb  V.  Willis,  22  Hun  (N.  Y.)  Mercer,  4  Miss.  (3  How.)  377  (1839) ; 
508  (1880).  See  Siewert  v.  Harael,  Fleming  v.  Sitton,  1  Dev.  &  B.  (N. 
33  Hun  (N.  Y.)  44  (1884),  and  note  C.)  Eq.  621  (1837) ;  Orchard  v, 
to  I  605  post.  Hughes,  68  U.  S.  (1  Wall.)  73  (1863); 

*  Clapp  V.  Maxwell,  13  Neb.  542  bk.  17  L.  ed.  560  ;  Noonan  v.  Lee, 
(1882).  67  U.  S.  (2  Black),  499  (1862);  bk.  11 

*  See    Dunkley    v.   VanBuren,   3  L.  ed.  278.     See  ante  §g  195-199. 
Johns.  Ch.  (N.  Y.)  330  (1818)  ;  Hunt  «  Crutchfield    v.    Coke,    6    J.    J. 
V.  Lewin,  4  Stew.  &  Port.  (Ala.)  138  Marsh.  (Ky.)  89  (1831) ;  Waddell  v. 
(1833);  Morgan  v.  Wilkins.  6  J.  J.  Hewitt,    2    Ired.    (N.    C.)  Eq.   252 
Marsh.   (Ky.)  28  (1831);  McGee  v.  (1842). 


§  606.]  JUDGMENT    AGAINST    IMORTGAGOR.  725 

debtor  is  entitled  to  credit  only  for  the  net  proceeds  realized 
from  the  sale,  after  deducting  the  costs  and  expenses  of 
the  sale  and  all  liens  for  taxes.'  No  proceedings  can  be  had 
upon  a  judgment  or  decree  to  compel  the  payment  of  the 
deficiency  until  the  report  of  the  referee  or  other  officer 
conducting  the  sale  has  been  filed  and  duly  confirmed,  and 
the  exact  amount  of  such  deficiency  has  been  ascertained.* 
It  seems  that  where  the  judgment  in  an  action  for  foreclosure 
provides,  "that  if  the  proceeds  of  the  sale  be  insufficient  to  pay 
the  amount  so  reported  to  be  due  to  the  plaintiff,  the  said 
referee  specify  the  amount  of  such  deficiency  in  his  report 
of  sale,  and  that  the  defendant  pay  the  same  to  the  plain- 
tiff," it  is  not  necessary  to  apply  to  the  court  for  an  order 
confirming  the  report  of  the  referee  before  issuing  execution 
against  the  defendant  for  the  amount  of  the  deficiency,  nor 
to  enter  any  further  judgment  upon  the  filing  of  the  said 
report.' 

§  606.     Judgment  for  deficiency  against  third  persons. 

— In  the  absence  of  a  statutory  provision  giving  the  court 
authority  therefor,  a  judgment  for  the  deficiency  arising 
after  the  application  of  the  proceeds  of  the  sale  of  the  mort- 
gaged premises  to  the  payment  of  the  debt  secured,  can  not 


'  Marshall  v.  Davies,  78  N.  Y.  414  after  the  said  sale  under  the  prior 

(1879).  mortgage,  directing  the  referee  to 

2  Bache  v.  Doscher.  41  N.  Y.  specify  the  amount  of  the  deficiency 
Supr.  Ct.  (9  J.  &  S.)  150  (1876);  in  his  report  of  the  sale,  and  adjudg- 
Bank  of  Rochester  v.  Emerson,  10  ing  the  defendant  to  pay  the  same 
Paige  Ch.  (N.  Y.)  359  (1843);  Tor-  to  the  plaintiff.  Thereafter  the 
mey  v.  Gerhart,  41  Wis.  54  (1876) ;  plaintiff,  without  having  the  prem- 
Baird  v.  McConkey,  20  Wis.  297  ises  sold  under  his  judgment,  ap- 
(1866).  In  Siewert  v.  Hamel,  33  pliedfor  leave  to  enter  a  judgment  of 
Hun  (N.  Y.)  44  (1884),  during  the  deficiency  for  the  amount  remaining 
pendency  of  an  action  brought  to  due  upon  his  judgment  after  apply- 
foreclose  a  mortgage,  a  prior  mort-  ing  thereon  the  amount  of  surplus 
gage  upon  the  same  premises  was  money  received  under  the  fore- 
foreclosed,  and  the  premises  were  closure  of  the  prior  mortgage.  The 
sold  and  purchased  by  the  plaintiff.  application  was  held  to  have  been 
The  surplus  arising  from  such  sale  properly  made  and  granted.  See 
was  applied  by  the  plaintiff  in  reduc-  ante  g^  203,  204,  206,  603. 
tion  of  the  amount  due  upon  his  s  Moore  v.  Shaw,  15  Hun  (N.  Y.) 
second  mortgage.  The  usual  judg-  428  (1878). 
ment  of  foreclosure  was  then  entered. 


726  JUDGMENT   AGAINST   THIRD   PERSONS.         [§  60G. 

be  taken  against  any  person  liable  for  the  debt,  other  than 
the  mortgagor  himself.*  And  it  has  been  held  to  be  erro- 
neous to  render  a  judgment  against  a  person,  who  guaranteed 
the  collection  of  a  note  secured  by  a  mortgage,  for  any  defi- 
ciency which  might  be  found  due  after  the  sale  of  the  mort- 
gaged premises  ;  the  holder  of  the  note  and  mortgage  must 
exhaust  his  remedies  against  the  mortgagor  and  the  mort- 
gaged property  before  he  can  proceed  against  the  guarantor.' 

In  some  states  the  only  remedy  against  a  third  person 
liable  for  a  mortgage  debt  or  for  the  deficiency  arising  upon 
the  sale  of  the  mortgaged  property,  is  by  a  separate  action 
at  law  after  the  deficiency  has  been  ascertained.  But  where 
a  complaint  improperly  joins  these  different  causes  of  action, 
objection  thereto  must  be  taken  by  answer  or  demurrer  or 
it  will  be  deemed  to  have  been  waived  ;*  if  no  objection 
is  taken,  a  decree  for  the  deficiency  may  be  entered,  although 
not  expressly  authorized  by  statute.*  The  statutory  juris- 
diction for  enforcing  the  collateral  obhgations  of  third 
persons  upon  a  mortgage  foreclosure  is  permissive  and  not 
obligatory,  and  will  not  be  exercised  to  their  prejudice,  unless 
they  have  made  it  necessary  by  their  agreements.* 

It  has  been  held,  that  mere  delay  in  foreclosing  a  mort- 
gage, on  which  the  interest  has  been  regularly  paid,  if  there 
has  been  no  request  or  notice  to  foreclose,  will  not  charge 
upon  the  mortgagee  the  consequences  of  a  depreciation  in 
the  value  of  the  property,  and  will  not  relieve  persons  liable 
for  the  payment  of  the  mortgage  debt  as  sureties  from  the 
effects  of  a  judgment  of  deficiency.* 


'  See  Doan  v.  Holly,  25  Mo.  357  *  McCarthy  v.  Gerraghty,  10  Ohio 

(1857) ;  s.  c.  26  Mo.  186  ;  Faesi  v.  St.  438  (1859) ;  Gary  v.  Wheeler,  14 

Goetz,  15  Wis.  231  (1862).  Wis.  281  (1861). 

«  Borden  v.  Gilbert,  13  Wis.  670  «  Gage  v.  Jenkinson,  58  Mich.  169 

(1861).     See  ante  §  233.  (1885). 

3  McCarthy  v.  Gerraghty,  10  Ohio  «  Merchants'  Ins.  Co.  of  the  City 

St.  438  (1859) ;  Baird  v.  McConkey,  of  New  York  v.  Hinman,  34  Barb. 

20  Wis.  297  (1866);  Cary  v.  Wheeler,  (N.  Y.)  410  (1861) ;  s.  c.  13  Abb.  (N. 

14  Wis.  281  (1861);  Jessop  v.   City  Y.)  Pr.  110.    See  Newcomb  v.  Hale, 

Bank  of  Racine.  14  Wis.  331  (1861) ;  90  N.  Y.  326  (1882). 
Stillwell  V.  Kellogg,   14  Wis.   461 
(1861). 


§  607.]      DEFIOffiNOY— ASSISNOE  GUAEAHTKEINO.  T27 

S  607,    Deficiency  against  assignor  guaranteeing  pay- 
ment -The  assignor  of  abond  and  mortgage.wlio  guarantees 
Teir  payment.wiU  be  liable  on  sucl>  guaranty  for  any  deficiency 
thai  may  aris^  upon  a  foreclosure  and  sale."   Wh.le  a  person 
who  has  guaranteed  the  collection  of  a  mortgage  .s  a  proper 
defendant  to  a  foreclosure,  yet  the  decree  of  sale  m  such  a 
case  should  provide  that  no  execution  shall  issue  agam  t  h.m 
until  an  execution  against  the  parties  primarily  I'^ble  has 
been  returned  unsatisfied;'  such  a  guaranty  is  merely  a  con- 
ditional  undertaking  to  pay  any  deficiency  that  may  ar,  e 
on  foreclosure,  and  not  an  absolute  guaranty  to  pay  the  debt. 
Where  a  guarantor  dies  pending  an  action  to  foreclose 
a  mortgage,  the  court  will  have  no  power  to  order  a  judg- 
ment for  deficiency  against  him  nunc  pro  tunc,  for  the  mort- 
gage  debt;  it  will  be  necessary  to  revive  the  action  against 
his  personal  representatives.' 

Under  the  Wisconsin  statute,'  where  a  jomt  and  several 
guaranty  is  secured  by  the  mortgage  of  only  one  of  the 
Guarantors,  all  of  them  may  be  made  defendants  to  an 
action  for  the  foreclosure  of  the  mortgage,  and  a  personal 
judgment  may  be  obtained  against  them  for  any  deficiency. 
Where,  upon  the  sale  of  a  bond  and  mortgage  the  assignor 
guarantees  their  payment,  he  will  not  necessarily  be  released 
from  his  liability  on  such  guaranty  by  the  failure  of  the 

■  ,r    ;i  Ma,  V    "irhrevcr    91  N.      granted.     Vanderbilt  v.   Scireyer, 
T  Bl'ait  S«0fflt7v  Burc,.n.      ft    N.    Y.    892   (1883,.     See   «.<, 

r^rTrs^'V^trBntr;.  ^.^^%  how.   .^  T.,  Pr^lO* 

^        o\?T     nh  VW     Y  ^  143  (1878);  Leonard  v.  Morns,  9  Paige 

Sr'ja^an'    will,  i  N  CU.  [k   Y.)  90  (1841, ;   Curli.  . 

J    Eq'   (dTe    Gr.,  207    (1878,.  Tyler,  9  Paige   Ch.    (N.  Y.)   483 

^:IT^'r^^Z      3n.e^.  .   Se^eyer,  91  K. 
adoplioa  o,  Uie  Coaeof  CM.  Pro^     Y.^8^.  (_1888,.  ^^^^^_^^  ^^  ^    ^ 

TaTl-tSerr      ;.^-^~-'-  - 
ga^e.  and  judgment  therein  against      kins,  51  Wis.  13o  (1881). 
him  for  a  deficiency  was  properly 


728  DEFICIENCY ASSIGNOR   GUARANTEEING,      [§  G08. 

assignee  to  comply  with  a  notice  requiring  him  to  collect 
the  indebtedness  by  legal  proceedings,  although  the  property 
may  have  depreciated  in  value  and  the  obligor  become 
insolvent  after  the  service  of  the  notice.' 

Where  a  person  assigns  a  bond  and  mortgage,  guarantee- 
ing their  collection,  and  thereby  places  himself  in  the 
position  of  a  surety  for  the  payment  of  the  debt,  and 
subsequently,  for  his  indemnity,  takes  the  bond  of  a  third 
person  as  collateral  security  for  such  payment,  the  principal 
creditor  will,  in  equity,  be  entitled  to  the  benefit  of  such 
collateral  security;  and  this  is  true,  though  he  may  not 
originally  have  relied  upon  the  credit  of  such  collateral 
security,  nor  known  of  its  existence.  In  an  action  to  foreclose 
the  mortgage,  the  obligor  on  such  collateral  bond  may 
properly  be  made  a  defendant,  to  enable  the  plaintiff  to 
obtain  a  decree  against  him  for  the  payment  of  any  defi- 
ciency which  may  remain  after  he  has  exhausted  his  remedy 
against  the  mortgagor." 

Where  a  mortgagee,  upon  assigning  his  bond  and  mortgage, 
guarantees  their  payment,  the  extent  of  his  liability  in  case 
of  a  deficiency,  if  he  received  less  than  the  face  of  the  mort- 
gage, will  be  limited  to  the  actual  amount  paid  for  the  bond 
and  mortgage  by  the  purchaser,  with  interest,  although  a 
larger  consideration  may  be  expressed  in  the  assignment.* 

§  608.  Deficiency  against  party  assuming  mortgage. 
— Most  of  the  states  have  enacted  statutes,  giving  to 
their  courts  authority  to  render  personal  judgments  in 
mortgage  foreclosures  for  any  deficiency  arising  after  the 
application  of  the  proceeds  of  the  sale  of  the  property  to 
the  payment  of  the  mortgage  debt ;  under  such  statutes  a 
judgment  for  deficiency  may  be  rendered  against  the 
mortgagor,  or  against  a  party  who  has  assumed  the  payment 
of  the  mortgage  debt,*  or  against  any  one  who  has  be:ome 


'  Newcomb  v.  Hale,  90  K  Y.  326  Brown,     35    Barb.    ( K    T. )    484 

(1882).     See  ante  §§  233-236.  (1861). 

*  Curtis  V.  Tyler,  9  Paige  Ch.  (N.  *  See  JIarshall  v.  Davies,  78  N.  Y. 

Y.)  432  (1842).  414  (1879);  Gifford  v.  McCloskey,  33 

3  Rapelye  v.  Anderson,  4  Hill  (N.  Hun  (N.  Y.)  350  (1885);    Douglass 

Y.)  472  (1842).     See  Goldsmith  v.  v.  Wells,  18  Hun  (N.  Y.)  88  (1879) ; 


§  608.]    DEFICIENCY   AGAINST   GRANTEE   ASSU3IING.         729 


a  guarantor  or  surety  of  it,*  or  who  has  given  a  collateral 
undertaking  for  its  payment.'  The  mortgagee  may  also 
maintain  an  action  at  law  against  any  such  party  whenever 
the  attending  circumstances  justify  the  conclusion  that  the 
promise  was  made  for  his  benefit.* 

But  a  mortgagee's  right  to  proceed  in  equity  against  one 
who  has  assumed  to  pay  his  mortgage,  does  not  extend  to  a 
claim  for  the  purchase  money  on  a  sale  of  the  mortgaged 
premises,  nor  to  the  vendor's  lien  to  secure  it.*  Where  a 
person  purchases  mortgaged  premises,  assuming  and  agree- 
ing to  pay  the  mortgage  debt  as  a  part  of  the  consideration 


Tuttle  V.  Armstead,  53  Conn.  175 
(1885) :  Bassett  v.  Bradley,  48  Conn. 
224  (1880);  Bay  v.  Williams,  112 
Dl.  91  (1884);  a  c.  54  Am.  Rep. 
209  ;  Birke  v.  Abbott,  103  Ind.  1 
(1885) ;  Wright  v.  Briggs,  99  Ind. 
663  (1884) ;  Ellis  v.  Johnson,  96  Ind. 
877  (1883) ;  Logan  v.  Smith,  70  Ind. 
597  (1880);  Gage  v.  Jenkinson,  58 
Mich.  169  (1885) ;  linger  v.  Smith, 
44  Mich.  22  (1880) ;  Fitzgerald  v. 
Barker,  70  Mo.  685  (1879) ;  Heim  v. 
Vogel,  69  Mo.  529  (1879) ;  Bond  v. 
Dolby,  17  Neb.  491  (1885);  Cubberly 
v.  Yager,  42  N.  J.  Eq.  (15  Stew.) 
289(1886);  Vreeland  v.  VanBlarcom, 
85  N,  J.  Eq.  (8  Stew.)  530  (1882) ; 
Allen  V.  Allen,  34  N.  J.  Eq.  (7 
Stew.)  493  (1881) ;  Trustees  for  sup- 
port of  Public  Schools  v.  Anderson, 
30  N.  J.  Eq.  (3  Stew.)  366  (1879) ; 
Brewer  v.  Maurer,  38  Ohio  St.  543 
(1883);  8.  C.  43  Am.  Rep.  436; 
Davis  V.  Hulett,  58  Vt.  90  (1886) ; 
Palmeter  v.  Carey,  63  Wis.  426 
(1885).  See  ante  %%218-2S2.  Where 
a  party  purchases  real  estate  and 
assumes  to  pay  one-half  of  certain 
mortgages  thereon,  he  is  a  proper 
party  to  a  foreclosure  of  one  of  the 
mortgage  .  but  he  is  liable  to  a 
personal  judgment  for  only  one-half 
of  the  mortgage  debt.  Logan  v. 
Smith,  70  Ind.  597  (1880). 


The  cases  on  this  point,  however, 
are  not  in  harmony.  Some  of  the 
courts  hold  that  no  action  lies  by 
the  mortgagee,  on  a  promise  made 
to  the  vendee  by  the  purchaser  of  an 
equity  of  redemption  to  assume  and 
pay  the  mortgage  on  the  land,  as 
part  of  the  consideration  named  in 
the  deed,  because  it  is  a  promise  to 
a  third  person.  Meech  v.  Ensign, 
49  Conn.  191  (1881);  s.  c.  44 
Am.  Rep.  225  ;  Wallace  v.  Furber, 
62  Ind.  103  (1878);  Prentice  v.  Brim- 
hall,  123  Mass.  291  (1877) ;  Booth  v. 
Conn.  Mut.  Life  Ins.  Co.,  43  Mich. 
299  (1880);  Stuart  v.  Worden,  43 
Mich.  154  (1879).  But  see  Bassett 
v.  Bradley,  48  Conn.  224  (1880). 

'  Jones  V.  Steinbergh,  1  Barb. 
Ch.  (N.  Y.)  250  (1845);  Bristol  v. 
Morgan,  3  Edw.  Ch.  (N.  Y.)  143 
(1837) ;  Jarman  v.  Wiswall,  24  N. 
J.  Eq.  (9  C.  E.  Gr.)  267  (1873). 
See  also  Sauer  v.  Steinbauer,  14  Wis. 
70  (1861). 

2  Halsey  v.  Reed,  9  Paige  Ch.  (N. 
Y.)  446  (1842). 

3  Bassett  v.  Bradley,  48  Conn.  224 
(1880). 

*  Emley  v.  Mount,  32  N.  J.  Eq. 
(5  Stew.)  470  (1880). 


730       deficie:?^ct  against  grantee  assujiino.  [§  608. 

of  the  conveyance,  he  thereby  merely  agrees  to  pay  his  own 
debt  to  a  third  person,  who,  by  an  equitable  subrogation, 
stands  in  the  place  of  the  promisee  vendor.'  In  those  cases 
where  the  mortgagor  sells  the  equity  of  redemption  subject 
to  the  mortgage,  and  the  purchaser  assumes  and  agrees  to 
pay  the  mortgage  debt  as  a  portion  of  the  purchase  money, 
the  grantee  becomes  personally  liable  for  the  payment  of  the 
debt  in  the  first  instance  ;  if  the  mortgagor  is  subse- 
quently compelled  to  pay  such  debt,  he  may  recover  it  from 
his  grantee  in  an  action  in  equity  or  at  law.* 

While  one  who  takes  a  deed  of  mortgaged  land  will  be 
personally  liable  on  the  foreclosure  of  the  mortgage,  if  his 
deed  expressly  binds  him'to  pay  the  debt,*  yet  a  covenant  to 
pay  can  not  be  implied  from  either  the  deed  or  the  mort- 
gage.* Where  a  purchaser  accepts  and  holds  under  a  deed 
containing  a  clause  reciting  that  he  assumes  and  agrees  to  pay 
a  note  secured  by  an  existing  mortgage  on  the  land,  he 
thereby  subjects  himself  to  a  liability  for  a  personal  judg- 
ment for  any  deficiency  that  may  exist  after  the  sale  of  the 
premises  under  a  decree  of  foreclosure ;  and  such  liability 
may  be  enforced  on  the  foreclosure.* 


*  Bassett  v.  Bradley,  48  Conn.  324  *  Equitable  Life  Ins.  Co.  v.  Bost- 
(1880).     See  ante  %%  218-233.  wick,  100  N.  Y.  638  (1885) ;  Gage  v. 

*  Comstock  V.  Drohan,  71  N.  Y.  Jenkinson,  58  :Mich.  169  (1885). 

9  (1877) ;  Hartley  v.  Harrison,  24  '  Gifford  v.  McCloskey,  38  Iliin 
N.  Y.  170  (1861)  ;  Russell  v.  Pistor,  (N.  Y.)  350  (1885) ;  Bay  v.  Williams. 
7  N.  Y.  171  (1852);  s.  c.  57  Am.  112  111.  91  (1884);  s.  c.  54  Am.  Rep. 
Dec.  509  ;  Cornell  v.  Prescott,  3  309  ;  Scarry  v.  Eldriilge,  63  Ind.  44 
Barb.  (K  Y.)  16  (1847) ;  Ferris  v.  (1878) ;  Unger  v.  Smith,  44  Mich.  22 
Crawford,  3  Den.  (N.  Y. )  595  (1880) ;  Wiuans  v.  Wilkie,  41  Mich. 
(1845) ;  Thayer  v.  Marsh,  11  Hun  365  (1879)  ;  Carley  v.  Fox,  38  Midi. 
(N.  Y.)  501  (1877);  Marsh  v.  Pike,  387  (1878) ;  Miller  v.  Thompson,  34 

10  Paige  Ch.  (N.  Y.)  595  (1844);  Mich.  10  (1876);  Crawford  v. 
Halsey  v.  Reed,  9  Paige  Ch.  (N.  Y.)  Edwards,  33  Mich.  360  (1876) ;  Fitz- 
447  (1843) ;  Blyer  v.  Mouholland,  3  gerald  v.  Barker,  70  Mo.  685  (1879); 
Saudf.  Ch.  (N.  Y.)  478  (1845).  As  Heim  v.  Vogel,  69  Uo.  529  (1879) ; 
to  the  liability  of  the  grantee  of  a  Davis  v.  Hulett,  58  Vt.  90  (1886). 
grantee,  see  Marsh  v.  Pike,  10  In  Lea  v.  Fabbri,  45  N.  Y.  Supr. 
Paige  Ch.  (N.  Y.)  595  (1844).  Ct.  (13  J.  &  S.)  361  (1879),  it  wa3 

2  Ranney  v.  McMullen,  5  Abb.  (N.  held  that  where  premises  were  con- 

Y.)  N.  C.  346(1878) ;  Wales  v.  Sher-  veyed,  "subject  to  a  certain  mort- 

wood,  53  How.  (N.  Y  )  Pr.  413  (1876).  gage  on  the  southerly  portion  of  the 


§  609.] 


JUDGMENT   OF   DEFICIENCY. 


iol 


§  609.  Mortgaged  premises  primary  fund — Subsequent 
liability. — Where  mortgaged  premises  are  sold  to  a  person 
who  takes  them  subject  to  a  mortgage  and  assumes  and 
agrees  to  pay  the  mortgage  debt  as  a  part  of  the  consideration 
for  the  conveyance,  the  mortgaged  premises  are  the  primary 
fund  for  the  payment  of  the  mortgage  debt,*  and  thereafter, 
the  party  purchasing  will  be  liable,*  and  his  grantor,  the 
original  mortgagor,  will  stand  in  the  position  of  a  surety  to 
such  defendant.*  The  obligation  of  the  purchaser  inures  in 
equity  to  the  benefit  of  the  holder  of  the  mortgage,  who, 
upon  foreclosure,  is  entitled  to  a  judgment  against  such 
purchaser  for  any  deficiency  which  may  exist  after  the  appli- 
cation of  the  proceeds  of  the  sale  to  the  mortgage  debt.* 

But  where  a  mortgagor  sells  the  mortgaged  premises,  receiv- 
ing the  full  consideration  therefor,  and  his  conveyance  is 
not  made  subject  to  the  payment  of  the  mortgage,  he 
will  remain  the  principal  debtor,  and  the  land  simply  security 
for  the  debt,  although  the  deed  may  contain  no  covenant 


same"  made  by  the  vendor,  which 
mortgage  the  vendee  assumed  and 
agreed  to  pay,  by  a  clause  in  the 
conveyance,  which  stated  that  the 
amount  of  the  debt  has  "  been 
deducted  from  the  consideration 
hereinbefore  expressed,"  there  is  no 
equitable  lien  upon  the  mortgaged 
premises  in  favor  of  the  vendor ; 
this,  though  the  vendee,  after  pay- 
ing interest  for  a  certain  time,  makes 
default,  and  allows  the  mortgage  to 
be  foreclosed  and  the  vendor  to  be 
thereby  charged  with  a  judgment 
for  deficiency.  The  assumption  of 
the  mortgage  is  pro  tanto  the  con- 
sideration. A  fortiori,  there  is  no 
equitable  lien  upon  that  portion  of 
the  premises  not  covered  by  the 
mortgage.     See  ante  §§  218-232. 

»Birke  v.  AbboU,  103  Ind.  1 
(1885).  And  this  is  true,  although  the 
deed  may  contain  a  covenant  on  the 
part  of  the  grantee  to  pay  the  mort- 
gage   debt,    such    covenant    being 


intended  to  indemnify  the  grantor 
against  the  contingency  that  the  land 
may  not  bring  enough  to  pay  such 
debt.  Wilbur  v.  Warren,  104  N.  Y. 
192  (1887). 

*  Ellis  V.  Johnson,  96  Ind.  377 
(1884). 

»  Drury  v.  Clark,  16  How.  (N.  Y.) 
Pr.  424  (1857).  See  ante  §  202  and 
chap.  xi. 

*  See  Ricard  v.  Sanderson,  41  N.  Y. 
179  (1869) ;  Ranney  v.  McMullen, 
5  Abb.  (N.  Y.)  N.  C.  246  (1878) ; 
Thayer  v.  Marsh,  11  Hun  (N.  Y.) 
501  (1877);  aff'd  75  N.  Y.  340; 
Comstock  V.  Drohan,  8  Hun  (N.  Y.) 
373  (1876) ;  aff'd  71  N.  Y.  9  ;  Halsey 
V.  Reed,  9  Paige  Ch.  (N.  Y.)  446 
(1842) ;  Stiger  v.  Mahooe,  24  N.  J. 
Eq.  (9  C.  E.  Gr.)  426  (1874) ;  Hoy 
V.  Bramball,  19  N.  J.  Eq.  (4  C.  E. 
Gr.)^563  (1868);  Klapworth  v. 
Dressier,  13  N.  J.  Eq.  (2  Beas.)  63 
(1860) ;  s.  c.  78  Am.  Dec.  69. 


732  LIABILITY    ON    ASSUMPTION.  [§  610. 

of  title  on  the  part  of  the  grantor.'  In  an  action  to  fore- 
close  a  mortgage,  where  more  than  one  party  is  personally 
liable  for  the  payment  of  the  mortgage  debt,  the  judg- 
ment should  provide  for  issuing  an  execution  for  the  defi- 
ciency against  the  several  defendants  in  the  order  in  which 
they  are  liable  as  principal  or  surety.* 

§  6io.  Assumption  of  mortgage— Defence  by  grantee. 
— The  purchaser  of  mortgaged  premises,  who  assumes  the 
payment  of  the  mortgage  as  a  part  of  the  consideration  of 
the  conveyance,  is  liable  to  the  mortgagee  and  is  a  proper 
party  to  a  foreclosure  under  the  Code  ;'  he  is  estopped  from 
contesting  the  validity  of  the  mortgage,  and  will  be  liable 
to  his  grantor  if  the  latter  is  compelled  to  pay  any  part  of 
the  mortgage  debt.*  Proof  of  the  recorded  deed  containing 
such  covenants  raises  the  presumption  that  the  title  is  vested 
in  the  grantee  and  that  he  is  liable.* 

The  grantor  can  not,  by  any  act  or  agreement  of  his  own, 
release  or  affect  his  grantee's  liability  to  the  , mortgagee, 
except  where  an  oral  agreement  is  made  contemporaneously 
with  the  conveyance  in  which  the  grantee  assumed  the 
mortgage,  to  the  effect  that  the  grantor  will,  at  any 
time,  accept  a  reconveyance  and  release  the  grantee  from 
his  covenant ;  and  where  such  a  verbal  agreement  has  been 
carried  out,  the  liability  of  the  grantee  on  the  mortgage  will 
be  extinguished.*  A  grantee  who  assumes  the  payment  of 
a  mortgage  will  be  deemed  to  have  entered  into  an  express 
undertaking  to  pay  the  debt,  although  he  may  not  sign  but 
merely  accept  the  deed  by  which  the  conveyance  is  made.* 


»  Wadsworth  v.  Lyon,  93  N.  Y.  N.  Y.  9  (1877) ;  Fairchild  v.  Lynch, 

201  (1883)  ;  8.  c.  45  Am.  Rep.  190.  46  N.  Y.   Supr.  Ct.  (14  J.  &'s.)  1 

^  Luce  V.  Hinds,  Clarke  Ch.  (N.  (1880) ;   Tliayer  v.  Marsh,  11  Hun 

Y.)  453  (1841) ;   Weed  v.   Calkins,  (N.  Y.)  501  (1877).  See  ante  %%  218- 

24  Hun  (N.  Y.)  582  (1881)  ;   Curtis  232. 

V.  Tyler,  9  Paige  Ch.  (N.  Y.)  432,  ^  Lawrence  v.  Farley,  24  Hun  (N. 

435  (1842).   See  a7ite  §  202  and  chap.  Y.)  293  (1881). 

xi.  8  Devlin   v.  Murphy,  5  Abb.  (N. 

3  N.  Y.  Code  Civ.  Proc.  §  1627  ;  Y.)  N   C.  242  (1878) ;  8.  c.  56  How. 

Ayers  v.  Dixson,  78  N.  Y.  318  (1879).  (N.  Y.)  Pr.  3-^6. 

*  Parkinson  v.  Sherman,  74  N.  Y.  '  Smith  v.  Truslow,  84  N.  Y.  6C0 

88  (1878) ;  Comstock  v.  Drohan,  71  (1881);  Atlantic  Dock  Co.  v.  Leavitt, 


§011.]      GKA2fTEE   NOT    LIABLE    FOE    DEFICIENCY.  i  3S 

§  6il.  Assumption  of  mortgage-When  grantee  not 
liable  for  deficiency— Where  a  grantee  has  assumed  the 
payment  of  a  mortgage,  he  will  not  be  liable  for  a  judgment 
of  deficiency  unless  his  grantor  was  liable.'  Where  a 
deed  contains  a  covenant  that  the  grantee  shall  pay  the  mort- 
gage on  the  property,  an  extension  of  the  time  of  payment  by 
the  holder  of  the  mortgage  will  discharge  the  grantor ;"  and 
when  the  mortgagee  releases  the  grantee,  he  will  thereby 
discharge  the  mortgagor  also  from  liability." 

It  has  been  held,  however,  that  one  liable  for  the  defi- 
ciency will  not  be  released  because  the  time  for  completing 
the  sale  was  extended  and  a  resale  subsequently  ordered, 
without  proceeding  against  the  original  purchaser  to  compel 
him  to  complete  his  purchase,  if  it  does  not  appear  that 
the  purchaser  was  personally  responsible  and  that  his  bid 
could  have  been  enforced.  Neither  will  he  be  released  where 
it  does  not  appear  that,  if  the  resale  had  been  ordered 
immediately,  the  mortgaged  premises  would  have  brought 
more;  particularly  is  this  true  where  no  fraud  was  practiced 
and  no  request  was  made  that  the  purchaser  should  be  pro- 
ceeded against,— for  the  plaintiff  in  a  foreclosure  may  elect 
to  apply  for  a  resale  or  to  compel  the  purchaser  to  complete 
his  purchase.* 

54  N    Y.  35  (1873)  ;  s.  c.  13  Am.  >  Spencer  v.  Spencer,  95  N.  Y.  353 

Rep    556  ;  Ricard  v.  Sanderson,  41  (1884) ;  Marshall  v.  Davies,  IH  N.  Y. 

NY     179    ( 1869  )  ;    Belmont    v.  414  ( 1879 ).  reversing  16  Hun  ( N. 

Coman    22  N.  Y.  438  (1860) ;  Col-  Y.)  606  ;  Calvo  v.  Davies,  73  N.  Y. 

lins  V  Rowe,  1  Abb.  (N.  Y.)  N.  C.  211  (1878).  affg  8  Hun  (N.  Y.)  322  ; 

97  (1876) ;  Marsh  v.  Pike,  10  Paige  s.  c.  29  Am.  Rep.  130.     See  Knob- 

Ch    (N    Y  )  595  (1844) ;  Furnas  v.  lock  v.  Zschwetzke.  53  N.  Y.  Supr. 

Durgin,  119  Mass.  500  (1876) ;  s.  c.  Ct.  (21  J.  &  S.)  391  (1886) ;  8.  c.  1 

20  Am   Rep.  341 ;  Miller  v.  Thomp-  N.  Y.  State  Rep.  238. 

son.  34  Mich.  10  (1876)  ;  Taylor  v.  '  Paine  v.  Jones.  76  N-  Y.   274 

Preston.  79  Pa.  St.  436  (1875).     See  (1879),   affg  14  Hun  (N.  Y.)  577; 

ante  ^■'^  230-''31  Riggs  ^-  Boucicault,  33  Hun  (N.  Y.) 

•  Cashmanv.  Henry.  75  N.  Y.  103  667  (1884) ;  s.  c.  20  N.  Y.  Wk.  Dig. 

(1878) ;  Vrooraan  v.  Turner.  69  N.  184.     See  ante  %%  218-233. 

Y.  280  (1877) ;  Smith  v.  Cross.  16  *  Goodwin  v.  Simouson.  74  N.  Y. 

Hun  (N.  Y.)  487  (1879);  Norwood  133(1878). 
V.  DeHart,  30  N.  J.  Eq.  (3  Stew.) 
412  (1879). 


734  GEANTEE   NOT   LIABLE   FOR   DEFICLENCY.     [§G12. 

It  has  been  held,  where  a  grantee  takes  a  conveyance  by  a 
warranty  deed  containing  a  covenant  to  pay  the  mortgage, 
and  he  is  subsequently  evicted  by  a  paramount  title,  that  he, 
will  not  be  liable  on  a  judgment  for  deficiency,  because  the 
consideration  for  the  covenant  has  wholly  failed.'  And  in 
an  action  to  foreclose  a  mortgage,  parol  evidence  is  admis- 
sible to  show  that  the  clause  in'U  deed,  whereby  the  grantee 
assumes  the  mortgage,  was  inserted  by  mistake  and  with- 
out the  knowledge  of  such  grantee.'  And  where  the 
grantee  in  a  conveyance  containing  such  a  clause,  was 
unable  to  produce  the  evidence  that  the  clause  was  inserted 
by  mistake  and  allowed  judgment  to  be  taken  against  him  by 
default,  but  two  years  later  found  the  evidence,  the  judg- 
ment was  opened  on  motion  and  he  was  allowed  to  come  in 
and  defend.* 

§  6i2.  Release  from  liability  on  assumption. — Whether 
the  personal  liability  incurred  by  a  grantee  to  the  holder 
of  a  mortgage,  by  assuming  its  payment,  can  be  released 
by  a  subsequent  agreement  between  such  grantee  and  his 
grantor,  is  an  unsettled  question.*  Thus,  it  is  held  in  New 
Jersey,  that  the  covenant  by  a  grantee  to  pay  the  mort- 
gage debt  is  a  contract  only  for  the  indemnity  of  the 
grantor,  and  may  be  released  or  discharged  by  him  ;*  but 
that  a  release  given  without  consideration  by  an  insolvent 
grantor,  after  notice  of  foreclosure,  and   for  the  sole  and 


>  Dunning  V.  Leavitt,  85  N.  Y.  30  v.   Casbacker,  8  Hun  (N.  Y.)  116 

(1881);  s.  c.  39  Am.  Rep.  617,  revers-  (1876);  Bay  v.  Williams,  112  III. 

ing  20  Hun  (N.  Y.)  178.  91  (1884) ;  s.  c.  54  Am.  Rep.  209  ; 

"^  DeyErmand  v.  Chamberlain,  88  Berksliire  Life  Ins.  Co.  v.  Hutcli- 

N.  Y.  658  (1882).     Bee  anU  §§  218-  ings,  100  Ind.  496  (1884) ;  Young  v. 

232.  Trustees  for  the  support  of  Public 

3  Trustees,   «&c.,  v.   Merriam,   59  Schools,  31  N.  J.  Eq.  (4  Stew.)  290 

How.  (N.  Y.)  Pr.  226  (1880).     See  (1879) ;  Trustees  for  the  support  of 

also  Union  Dime  Saving  Institution  Public  Schools  v.  Anderson,  80  N. 

V.  Clark,  59  How.  (N.  Y.)  Pr.  342  J.  Eq.  (3  Stew.)  366  (1879) ;  Brewer 

(1880).  V.  Maurer,  38  Ohio  St.  543  (1882) ; 

*  See  Judson  v.  Dada,  79  K  Y.  s.  c.  43  Am.  Rep.  436. 
373  (1880) ;  Hartley  v.  Harrison,  24  »  Young  v.  Trustees  for  the  sup- 

N.  Y.  170  (1861);  Douglass  v.  Wells,  port  of  Public  Schools,  31  N.  J.  Eq. 

18  Hun  (N.  Y.)  88  (1879) ;  Stephens  (4  Stew.)  290  (1879).    See  ante  §  231. 


§613.]  EELEASE   FROM   LIABILITY.  ^35 

admitted  purpose  of  defeating  the  mortgagee's  claim  for 
a  judgment  of  deficiency,  is  void  in  equity.' 

On  the  other  hand,  it  has  been  held  in  Illinois'  and  m 
New  York,'  that  such  an  agreement  to  pay  the  mortgage 
debt,  creates  an  absolute  and  irrevocable  obligation  in  favor 
of  the  mortgagee,  which  can  not  be  released  or  affected  by 
any  act  or  agreement  of  the  mortgagor  or  the  grantee  to 
which  the  mortgagee  does  not  assent ;  in  other  cases,  it  is 
held  that  such  an  agreement  becomes  irrevocable  only  after 
it  has  been  accepted  and  acted  upon  by  the  mortgagee.* 

Where  a  grantee,  who  has  assumed  the  payment  of  a  mort- 
gage, subsequently  reconveys  the  land  in  good  faith  to  his 
grantor,  who  in  turn  assumes  the  payment  of  such  debt,  the 
liability  of  the  first  grantee  to  the  holder  of  the  mortgage 
will  be  thereby  terminated.* 

§  613.  No  liability  where  deed  subject  to  mortgage.— 
It  is  well  settled  that  the  acceptance  of  a  conveyance  con- 
taining  words  importing  that  the  grantee  will  pay  the 
mortgage,  which  is  a  lien  upon  the  premises  purchased, 
binds  him  to  discharge  such  incumbrance  as  effectually  as 
though  he  had  signed  the  deed.  No  express  or  formal 
words  are  necessary  to  create  this  obligation,  as  the  liability 
depends  entirely  upon  the  agreement  of  the  parties  ;*  yet 
the  mere  fact  that  the  grantee  purchased  subject  to  the  mort- 
gage,  and  that  a  clause  to  that  effect  was  inserted  in  the 
deed',  will  not  alone  render  the  grantee  personally  liable  for 
the  mortgage  debt  nor  create  such  liability  ;  the  words  used 
must  clearly  show  that  such  obligation  was  intended  by  the 
one  party  and  knowingly  assumed  by  the  other.' 

1  Trustees  for  the  support  of  Pub-  »  Laing  v.  Bryne,  34  N.  J.  Eq.  (7 

lie  Schools  V.  Anderson,  30  N.  J.  Stew.)  52  (1881).   But  see  an«e  § 232. 

Eq.  (3  Stew.)  366  (1879).  *  Belmont  v.  Coman,   22  N.   Y. 

'Bay   V     Williams.   112   lU.   91  438  (1861);  s.  c.  78  Am.  Dec.  213. 

a884^  •  8  c  54  Am.  Rep.  209.  "'  Equitable  Life  Assurance  Soc.  v. 

'  Douglass  V.  Wells,  18  Hun  (N.  Bostwick.   100  N.   Y.   628   (1885); 

Y  ^  88  (1879).     See  ante  g§  230,  231.  Smith  v.   Truslow,  84  N.  Y.   660 

4  See  Berkshire  Life  Ins.  Co.  v.  (1881) ;  Collins  v.  Rowe,  1  Abb.  (N. 

Hutchings.    100    Ind.    496    (1884)  ;  Y.)  K    C.   97  (1876) ;  Johnson  v. 

Brewer  v  Maurer.  38  Ohio  St.  543  Monell,  13  Iowa,  300  (1862) ;  Fiske 

(1882) ;  8.  c.  43  Am.  Rep.  436.  t.  Tolman,  124  Mass.  254  (1878) ;  B. 


736         DEED  SUBJECT  TO  MOltTGAGE NOT  LIABLE.   [§  614. 

As  between  the  mortgagor  and  his  grantee,  the  latter  is 
secondarily  liable  for  the  whole  mortgage  debt,  the  land 
conveyed  being  primarily  liable.'  A  grantee  purchasing 
mortgaged  premises  subject  to  the  incumbrance,  not  being 
personally  liable  for  the  debt,  will  simply  lose  the  premises 
in  case  of  foreclosure,'  because  in  such  case  the  land  is  the 
primary  fund  for  the  payment  of  the  debt,  and  must  be  so 
applied.* 

The  most  that  can  be  claimed  for  the  words  "  under  and 
subject  to"  in  a  conveyance  of  land,  is  that  as  between  the 
parties,  they  create  a  covenant  of  indemnity  to  the  grantor  on 
the  part  of  the  grantee.*  Yet  it  is  said  that  where  a  pur- 
chaser buys  mortgaged  premises  from  the  mortgagor  subject 
to  the  mortgage  debt,  though  the  deed  may  not  in  terms 
hind  him  to  pay  such  debt,  he  is  to  be  treated,  as  between 
himself  and  the  mortgagor,  as  having  assumed  the  mortgage, 
and  is  personally  liable  for  whatever  deficiency  may  remain 
after  the  foreclosure  sale.* 

§  614.     Oral  contract  of  assumption  may  be  enforced. — 

Where,  at  the  time  of  conveying  land,  it  is  orally  agreed 
that  the  grantee  shall  assume  and  pay  a  mortgage,  for  the 
payment  of  which  the  grantor  is  liable,  the  latter  may,  if 
subsequently  compelled  to  pay  it,  recover  the  amount  so 
paid  from  the  grantee,  though  the  conveyance  contains  no 


c.   26   Am.   Rep.   659  ;     Strong  v.  *  Taylor  v.  Mayer,  93  Pa.  St.  43 

Converse,  90  Mass.  (8    Allen),  557  (1880).     See  Samuel  v.  Peyton,  88 

(1864);  s.  c.  85  Am.  Dec.  733  ;  Hall  Pa.  St.  465  (1878) ;   also  ante  %  224 

V.  Morgan,  79  Mo.  47  (1883) ;  Law-  and  post  %  615. 

rence  v.  Towle,  59  N.  H.  28  (1879);  »  Canfield  v.  Shear,  49  Mich.  313 

Woodbury  v.  Swan,  58  N.  H.  380  (1882).     It  was  held  by  the  supreme 

( 1883 ) ;    Walker  v.    Goldsmith,   7  court  of  Michigan  in   Sheldon    v. 

Oreg.  161  (1879).  See  an<«  g§  218-232.  Holmes,  58   Mich.  138  (1885),    that 

'  Moore  v.  Clark,  40  N.  J.  Eq.  (13  on  the  dismissal  of  a  bill  of  fore- 
Stew.)  152  (1885).  closure  against  a  subsequent  bona 

'  Winans  v.  Wilkie,  41  Mich.  264  fide  purchaser  who  has  not  made 

(1879).  full  payment,  he  may  be  held  for 

^  Johnson  v.  Corbett,  11  Paige  Ch.  such    sums  as  remain  due  after  he 

(N.  Y  )  265  (1844)  ;  Halsey  v.  Reed,  has  been  notified  of  the  complain- 

9  Paige  Ch.    (N.   Y.)  446    (1842)  ;  ant's  equities. 
Forgy  V.  Mcrryman,  14  Neb.   516 
(1883). 


§  615.]  OEAL   ASSUMPTION ^LIABILITY.  737 

agreement  on  the  part  of  the  grantee  to  assume  the  mort. 
gage,  but  is  only  made  subject  to  it.'  The  grantee,  however, 
may  so  contract  with  his  grantor  as  to  make  himself  person- 
ally liable  to  the  mortgagee.  Thus,  where  the  amount  of 
the  mortgage  debt  forms  a  part  of  the  consideration  of  the 
purchase,  and  by  the  contract  is  to  be  paid  by  the  pur- 
chaser, he  will  be  personally  liable  where  he  has  retained 
that  amount  out  of  the  purchase  money.* 

But  the  deduction  of  the  amount  of  the  mortgage  debt 
from  the  purchase  price  on  a  sale  of  the  land,  in  the  absence 
of  an  express  agreement  to  pay,  does  not  impose  upon  the 
grantee  the  absolute  duty  of  paying  the  mortgage  debt. 
While  such  deduction  may  be  evidence  of  the  grantor's  inten- 
tion to  subject  the  land  to  such  payment,  it  is  not  controlling 
nor  conclusive,  and  it  may  be  inferred  that  the  deduction 
was  made  to  protect  the  grantee  against  an  actionable 
incumbrance.* 

§  615.  Intention  of  parties  determines  question  of 
assumption. — Whether  a  personal  liability  is  assumed  in 
any  case  is  always  dependent  on  the  intention  of  the 
parties ;  unless  the  parties  have  declared  this  intention  in 
express  words  no  liability  will  be  incurred.  If  the  deed 
merely  recites  that  the  land  is  taken  subject  to  a  certain 
mortgage,  there  will  be  no  personal  liability  ;*  neither  will 
the  words  "  under  and  subject "  to  a  mortgage  which  is 
specified,  import  a  promise  to  pay,  nor  create  a  personal 
liability.* 

In  those  cases  where  there  are  words  in  the  deed  import- 
ing that  the  grantee  is  to  pay  the  mortgage,  subject  to 
which  he  takes  the  land,  he  will  be  deemed  to  have  entered 
into  an  express  undertaking  to  do  so  by  the  mere  acceptance 


>  Taintor    v.     Hemmingway,    18  438  (1860)  ;  s.  c.  78  Am.  Dec.  213  ; 

Hun  (N.  Y.)  458  (1879).  Hull    v.   Alexander,   26  Iowa,  569 

*  Smith  V.  Truslow,  84  N.  Y.  660  (1869). 

(1881) ;  Winans  v.  Wilkie,  41  Mich.  *  See  Girard  Life  Ins.   &  Trust 

264  (1879).     See  ante  §  224.  Co.  v.  Stewart,  86  Pa.  St.  89  (1878) ; 

» Bennett  v.  Bates,  94  N.  Y.  354  Lennig's    Estate,    52    Pa.    St.    135 

(1884).  (1866).     See  ante  §  613. 

*  Belmont  v.   Coman,   22  K  Y. 

m 


738  DEFICLENOT    AGATNST   NON-KESIDENT.  [§616. 

of   the   deed,  and   by   taking  possession   of   the   property 
under  it.* 

The  grantee  of  mortgaged  premises  will  be  liable  for  the 
payment  of  the  mortgage  debt  only  where  such  liability  was 
a  part  of  the  bargain  for  the  sale  and  conveyance  of  such 
premises.'  Therefore,  where  a  clause  is  inserted  in  the  deed 
of  conveyance  without  the  knowledge  of  the  grantee,  by 
which  he  is  made  to  assume  and  agree  to  pay  the  mortgage, 
and  he  has  no  knowledge  or  notice  of  the  insertion  of  such 
clause  until  after  the  commencement  of  foreclosure  proceed- 
ings, he  may  set  up  in  his  answer  that  the  insertion  of  such 
clause  was  a  fraud  and  without  his  knowledge,  and  he  may 
have  the  deed  reformed  by  striking  out  such  clause.' 

§  6i6.  No  judgment  of  deficiency  against  non-resident. 
— A  personal  judgment  for  deficiency  can  not  be  rendered 
against  a  non-resident  who  has  not  appeared  in  the  action, 
or  who  has  not  been  personally  served  with  the  summons 
within  the  state.*  Where  the  statute  provides  for  service 
by  publication,  a  judgment  obtained  against  a  non-resident 
upon  such  service  can  be  enforced  against  the  mortgaged 
property  only ;  such  a  judgment  does  not  impose  a  personal 
liabihty  upon  him.' 

But  it  has  been  said  that  due  process  of  law,  without 
which  one  can  not  be  bound  by  a  judicial  decree  nor 
deprived  of  his  property,  does  not  necessarily  require  the 
personal  service  of  a  notice  of  the  proceedings  ;*    and  that 


'  Ricard  v.  Sanderson,  41  N.  Y.  »  Parker  v.  Jenks,  36  N.  J.  Eq. 

179  (1869);  Belmont  v.  Coman,  22  (9  Stew.)  398  (1883).      See    Dey- 

N.  Y.  438  (1860) ;  s.  c.  78  Am.  Dec.  Ermand  v.   Chamberlain,   22  Hun 

213  ;  Lawrence  v.  Fox,  20  N.  Y.  268  (N.  Y.)  110  (1880);  aff 'd  88  N.  Y.  658. 

(1859) ;   Trotter  v.  Hughes,  12  N.  »  See  Dey Ermand  v.  Chamberlain, 

T.  74  (1854) ;  s.  c.  62  Am.  Dec.  137 ;  88  N.  Y.  658  (1882) ;  Albany  City 

Vail  V.  Foster,  4  N.  Y.  312  (1850) ;  Sav.  Inst.  v.  Burdick,  87  N.  Y.  40 

Marsh  v.  Pike,  10  Paige  Ch.  (N.  Y.)  (1882).     See  ante  §  610. 

695  (1844) ;  Halsey  v.  Reed,  9  Paige  *  Schwinger  v.  Hickok,  53  N.  Y. 

Ch.  (N.  Y.)  446  (1842) ;  Curtis  v.  280  (1873) ;   Lawrence  v.   Fellows, 

Tyler,   9    Paige    Ch.   (N.   Y.)   433  Walk.  Ch.  (Mich.)  468  (1844).     See 

(1842) ;     Blyer   v.    Monholland,    3  ante  §  203. 

Sandf.    Ch.    (N.    Y.)   478   (1845);  »  Schwinger  v.  Hickok,  53  N.  Y. 

MiUer  v.  Thompson,   34  Mich.  10  280(1873). 

(1876).  ^  Inre  Empire  State  Bank,  18  N. 


§§  617-618.]    NO  JUDGMENT DEBT  NOT  DUE.  739 

the  legislature  may  declare  that  judgments  obtained  against  q 
non-resident,  upon  service  by  publication,  may  be  enforced 
against  all  property  of  such  defendant  found  within  the  st?te 
where  the  judgment  is  rendered.* 

§  617.  No  judgment  of  deficiency  for  installments  not 
yet  due. — On  a  mortgage  foreclosure,  a  personal  judgment 
can  not  be  rendered  against  the  mortgagor,  or  other  person 
liable  for  the  payment  of  the  debt,  for  any  deficiency  before 
such  debt  becomes  due  according  to  the  contract."  It  seems 
that  a  judgment  of  foreclosure  for  the  whole  amount  due  and 
to  become  due  on  several  notes,  secured  by  a  mortgage 
or  otherwise,  is  not  erroneous,  if  rendered  in  conformity 
to  law.'  But  it  has  been  said  that  where  a  mortgage 
securing  a  debt  payable  in  installments,  some  of  which  are 
due  and  others  yet  to  become  due,  is  foreclosed,  the  court 
can  only  direct,  as  to  the  installments  not  due,  at  what  time 
and  upon  what  default  subsequent  executions  shall  issue 
to  collect  the  amounts  of  such  installments.* 

Where  a  mortgage  provides  that,  upon  default  in  the  pay- 
ment of  an  installment  of  the  debt,  or  in  the  payment  of  the 
interest,  the  whole  debt  shall  immediately  become  due  and 
payable,  a  personal  judgment  may  be  entered  for  the  whole 
amount  upon  the  first  default  in  the  payment  of  the  princi- 
pal or  interest.* 

§  618.  Deficiency— How  determined. — In  a  mortgage 
foreclosure  the  mortgagor  is  entitled  to  be  credited  on  the 
mortgage  debt  only  with  the  net  proceeds    realized    from 


¥.199  215(1858).   See  Sch winger  v.  <  Skelton  v.   Ward,   51    Ind.    46 

V.  Hickok,  53  N.  Y.  284  (1873).  (1875).     See  anU  §  204. 

>  See  Bissell  v.   Briggs,  9  Mass.  ^  Hatcher  v.  Chancey,  71  Ga.  689 

463  (1813) ;  8.  c.   6  Am.  Dec.  88 ;  (1883) ;  Miller  v.   Remley,  35  Ind. 

Boswell  V.  Otis,  50  U.  S.  (9  How.)  539  (1871);  Hunt  v.  Harding,  11  Ind. 

336  (1850);  bk.  13  L.  ed.  164;  Thomp-  245  (1858);  Lacoss  f.  Keegan,  2  Ind. 

son  V.  Emmert,  4  McL.  C.  C.  96  406  (1850) ;   Cecil  v.  Dynes,  2  Ind. 

(1846).  266  (1850) ;  Greenman  v.  Pattisou,  8 

«  Danforth  v.  Coleman,  23  Wis.  Blackf.  (Ind.)  465  (1847) ;   Darrow 

528(1868).     See  Skelton  V.   Ward,  v.    Scullin,    19    Kan.    57    (1877); 

61  Ind.  46  (1875) ;  also  anis  §  204.  Adams  v.  Essex,  1  Bibb  (Ky.)  149 

•AUen   V.  Parker,  11    Ind.   504  (1808);    s.   c.   4   Am.    Dec.    623; 

(1858).  Eeddick  v.  Gressman,  49  Mo.  389 


740 


DEFICIENCY HOW    aSCEKT  A I  NED. 


[§618. 


the  sale  of  the  premises,  and  will  continue  liable  for  all 
deficiency  remaining  unpaid.  The  amount  of  the  deficiency 
is  to  be  ascertained  by  deducting  from  the  proceeds  of  the 
sale  all  taxes  and  other  liens,  together  with  the  expenses  of 
the  sale,  and  by  treating  the  balance  as  net  proceeds,  which 
must  be  credited  upon  the  amount  due  on  the  bond  and 
mortgage  for  principal  and  interest ;  the  balance  then  remain- 
ing unpaid  will  be  the  deficiency.'  A  purchase  by  the  plain- 
tiff will  not  vary  the  rule.* 

It  has  been  held  that  a  defendant  in  an  action  in  another 
state  to  recover  the  balance  of  the  mortgage  debt,  after  a 
foreclosure  and  sale  of  the  mortgaged  property  in  New 
York,  can  not  show  that  the  real  value  of  the  property  was 


(1872)  ;  Bank  v.  Chester,  11  Pa.  St. 
282,  290  (1849);  Scheibev.  Keunedy, 
64  Wis.  564,  567  (1875) ;  ]Maniiing  v. 
McClurg,  14  Wis.  350  (1861).  See 
ante  g  204. 

'  See  Sidenberg  v.  ^y,  90  N.  Y. 
257,  262-263  (1882);  s.  c.  43  Am.  Rep. 
163  ;  Marshall  v.  Davics,  78  N.  Y. 
414  (1879) ;  s.  c.  58  How.  (N.  Y.) 
Pr.  231,  reversing  16  Hun  (N.  Y.) 
606  ;  Cornell  v.  Woodrulf,  77  N.  Y. 
203(1879);  Williams  v.  Townsend, 
31  N.Y.  411,  414(1865);  Robinson  v. 
Ryan,  25  N.  Y.  320  (1862) ;  Eagle 
Fire  Ins.  Co.  v.  Pell,  2  Edw.  Ch. 
(N.  Y.)  631  (1836) ;  Faure  v.  Wi- 
nans,  Hopk.  Cli.  ( N.  Y.  )  283 
(1824) ;  s.  c.  14  Am.  Dec.  545  ;  Bre- 
voort  V.  Randolph,  7  How.  (N.  Y.) 
Pr.  398  (1853) ;  Weed  v.  Hornby,  35 
Hun  (N.  Y.)  580,  582  (1885) ;  Burr 
V.  Veeder,  3  Wend.  (N.  Y.)  412 
(1829).     See  ante  §  204. 

*  In  the  case  of  Cornell  v.  Wood- 
ruff, 77  N.Y.  203(1879),  by  the  judg- 
ment in  a  foreclosure  suit  and  by 
the  terms  of  sale,  all  liens  upon  the 
premises  for  taxes  and  assessments 
were  to  be  deducted  from  the  pro- 
ceeds of  the  sale.  The  plaintiff  be- 
came the  purchaser.     The  premises 


were  situated  in  the  city  of  Brooklyn, 
and  at  the  time  of  the  sale  several 
years'  municipal  taxes  were  in 
arrears,  for  which  the  mortgaged 
premises  had  been  sold.  Cerliticates 
of  sale  had  been  issued,  which  were 
held  by  the  plaintiff.  No  lease  had 
been  executed.  After  the  foreclosure 
sale,  the  plaintiff  caused  the  amount 
necessary  to  redeem  the  premises 
from  the  tax  sales  to  be  deposited  in 
the  proper  otHce,  and  furnished  to 
the  sheriff  the  certificate  of  deposit 
and  redemption,  the  amount  of 
which  he  deducted  from  the  pur- 
chase money  as  liens  for  taxes,  and 
reported  a  deficiency  against  the 
mortgagor.  Held  no  error ;  that 
the  certificates  of  sale  were  liens 
to  the  amount  necessary  to  redeem, 
i.  e.,  the  amount  of  taxes,  expenses 
of  sale  and  interest  at  the  rate 
allowed  by  law  upon  such  sales ; 
and  that  the  right  to  allow  and 
deduct  from  the  proceeds  of  sale 
the  amount  so  necessary  to  redeem 
was  not  affected  by  the  fact  that 
the  plaintiff  himself  held  the  cerliti- 
cates. 


§  619.]  WHEN    DEFICIENCY    DOCKETED.  ^41 

greater  than  the  amount  for  which  it  was  sold.'  The  judg- 
ment in  a  foreclosure  fixes  the  amount  due  on  the  obligation 
and  security,  and  is  a  final  adjudication  on  that  point ;  and 
no  objections  can  be  made  to  the  issuing  of  an  execution 
for  the  deficiency,  unless  they  arose  after  the  confirmation 
of  the  foreclosure  sale  and,  recognizing  the  decree,  tend  to 
the  satisfaction  of  the  judgment.' 

Under  the  existing  statutes  of  Wisconsin,  a  personal 
judgment  against  the  mortgagor  for  the  whole  amount  of 
the  mortgage  debt,  or  even  for  the  deficiency  after  a  sale 
of  the  mortgaged  property,  can  not  be  entered  with  the 
decree  of  foreclosure,  though  such  decree  may  include  a 
direction  for  a  subsequent  judgment  of  deficiency,  if 
demanded  in  the  complaint.  A  judgment  for  deficiency  can 
be  entered  only  after  such  deficiency  has  been  duly  ascer- 
tained, and  it  can  be  ascertained  only  after  the  sale  has  been 
made  and  confirmed.  A  judgment  in  violation  of  this  rule 
will  be  reversed.* 

§  619.  When  judgment  for  deficiency  may  be  docketed. 
— In  a  mortgage  foreclosure,  a  personal  judgment  can  not 
be  rendered  for  the  payment  of  any  deficiency  until  the 
amount  of  such  deficiency  has  been  ascertained  by  the  officer 
conducting  the  sale,  and  his  report  thereof  has  been  con- 
firmed by  the  court.*  Whatever  may  be  the  form  of  the 
debt,  an  absolute  personal  judgment  for  any  deficiency  can 
not  be  rendered  on  foreclosure,  but  only  a  contingent  judg- 
ment against  the  defendants  to  the  extent  of  any  deficiency 
which  may  remain  after  the  sale  of  the  mortgaged  premises.* 

It  has  been  held  that  the  court  may  make  a  contin- 
gent decree  for  the  payment  of  any  deficiency  against  the 

» Belmont  v.   Cornen,   48   Conn.      How.  (N.  Y.)  Pr.  66  (1852) ;   Cor- 


838  (1880). 


merais    v.     Genella,    22    Cal.    116 


«  Haldane  v.  Sweet,  58  Mich.  429  (1863);  Mickle  v.  Maxfield,  42  Mich. 

(1885).  304  (1879);    Howe    v.    Lemon,   37 

«  Welp  V.  Gunther,  48  Wis.  543  Mich.    164  (1877)  ;    Clapp  v.  Max- 

(1879).  well,  13  Neb.  542,  547  (1882). 

*  See  Bache  v.  Doscher,  41  N.  Y.  '  Brown   v.    Willis,   67  Cal.    235 

6upr.  Ct.   (9  J.  &  S.)  150  (1876);  (1885).     See  Siewert  v.  Hamel,  33 

DeAgreda  v.  Mantel,  1  Abb.  (N.  Y.)  Hun   (N.   Y.)  44  (1884) ;    Loeb  v. 

Pr.  130  (1854) ;  Cobb  v.  Thornton,  8  Willis,  22  Hun  (N.  Y.)  508  (1880). 


742  DEFICIENCY  JUDGMENT  A  LIEN.    [§§  620-621. 

mortgagor,  or  other  party  personally  liable  for  the  mortgage 
debt,  previous  to  the  sale  or  after  it,  without  waiting  for  the 
confirmation  of  the  report  of  sale.' 

§  620.  When  judgment  for  deficiency  becomes  a  lien. 
— A  personal  decree  for  the  deficiency,  after  the  application  of 
the  proceeds  of  the  sale  to  pay  the  mortgage  debt,  does  not 
have  the  force  and  effect  of  a  judgment  at  law  and  become 
a  lien  upon  the  real  property  of  the  person  against  whom  it 
is  taken,  until  the  excess  of  the  mortgage  debt  over  the  pro- 
ceeds of  the  sale  has  been  ascertained  and  a  subsequent 
judgment  at  law  has  been  docketed.*  But  it  has  been  held 
in  Indiana,  that  whenever  in  a  proceeding  to  foreclose  a 
mortgage,  the  plaintiff  is  entitled  to  a  personal  judgment, 
and  an  order  made  under  the  statute,  that  after  the  sale  of 
the  mortgaged  premises,  the  residue  of  the  judgment 
remaining  unpaid,  shall  be  levied  on  other  property  of  the 
mortgagor,  the  judgment  is  from  the  date  of  its  rendition 
a  lien  on  all  the  lands  of  the  mortgagor  in  the  county.*  In 
California,  such  a  judgment  becomes  a  lien  upon  the  property 
of  the  debtor  only  from  the  time  it  is  docketed.* 

§  621.  Execution  for  deficiency. — Upon  the  usual  decree 
for  the  amount  of  the  deficiency  against  the  mortgagor  or 
other  defendant  personally  liable  for  the  mortgage  debt,  an 
execution  can  not  regularly  issue  prior  to  the  filing  and  con- 
firmation of  the  report  of  the  officer  making  the  sale.*  Upon 
the  coming  in  of  the  report  of  the  referee,  from  which  the 


'  McCarthy  v.  Graham,  8  Paige  «  Fletcher  v.  Holmes,  25  Ind.  458 

Ch.   (N.  Y.)  480  (1840).      But  see  (1865). 

Cobb  V.  Thornton,  8  How.  (N.  Y.)  *  Cormerais   v.    Genella,  22  Cal. 

Pr.  66  (1853).  116    (1863).      See   Rowe    v.    Table 

'Mutual  Life  Ins.  Co.  v.  South-  Mountain  Water  Co.,  10  Cal    441 

ard,  25  N.  J.  Eq.  (10  C.  E.  Gr.)  337  (1858) ;   Rollins  v.  Forbes,  10  CaL 

(1874) ;  Bell  v.  Gilmore,  25  N.  J.  Eq.  299  (1858). 

(10  C.  E.  Gr.)  104  (1874).     See  also  ^  Bank  of  Rochester  v.  Emerron. 

DeAgreda  v.  Mantel,  1  Abb.  (N.  Y.)  10  Paige  Ch.  (N.  Y.)  115  (1843) ;  8. 

Pr.  130  (1854) ;  Cobb  v.  Thornton,  8  c.  10  Paige  Ch.  (N.  Y.)  359.     Se« 

How.  (]SI.Y.)Pr.  66(1852);  Englund  Bache  v.  Doscher,  41  K  Y.  Supr. 

V.Lewis,  25  Cal.  337(1864);  Chapin  Ct.     (9    J.     &    S. )    150    (1876), 

V.  Broder,  16  Cal.  403  (1860) ;  N.  Y.  Cobb  v.  Thornton,  8  How.  (N.  Y.) 

Code  Civ.  Proc.  §§  1246,  1250.  Pr.   66  (1852)  ;    Hanover  Fire  Ins. 


§  622.]  EXECUTION   FOE   DEFICIENCY.  743 

amount  of  the  deficiency  is  ascertained,  it  is  not  necessary 
to  apply  to  the  court  for  judgment  against  the  mortgagor 
for  such  deficiency.  The  execution  may  be  issued  directly 
on  the  judgment  of  foreclosure.* 

An  execution  for  the  deficiency  on  a  foreclosure  should  not, 
as  a  rule,  be  issued  without  special  application  to  the  court 
upon  notice  to  the  defendant.'  The  decree  in  foreclosure 
making  a  defendant  personally  liable  for  any  deficiency,  taken 
together  with  the  referee's  report  of  the  amount  of  such 
deficiency,  furnishes  a  prima  facie  case  against  such  de- 
fendant ;*  but  a  defendant  may  resist  an  execution  against 
him  by  showing  objections  which  are  not  contradictory  to 
the  decree  and  which  would  operate  to  effect  its  satisfaction.* 

§  622.  Miscellaneous  matters  connected  with  judg- 
ments for  deficiency. — Many  matters  intimately  associated 
with  judgments  for  deficiency,  which  would  seem  to  belong 
to  this  chapter,  have  already  been  fully  considered  in  an 
earlier  part  of  the  work  on  parties  defendant  personally 
liable  for  the  mortgage  debt.*  They  are  for  that  reason 
omitted  here.  Among  such  matters  may  be  mentioned  the 
remedies  for  collecting  a  deficiency  against  the  estate  of  a 
decedent  who  was  personally  liable  for  the  payment  thereof ;' 
the  remedies  against  the  heirs  and  devisees  of  such  a  dece- 
dent ;*  the  liability  of  the  estates  of  married  women  for  the 
payment  of  deficiencies  arising  on  their  personal  obligations 
for  the  payment  of  mortgage  debts  ;*  the  history  of  the 
procedure  for  enforcing  the  collection  of  deficiencies  ;*  and 
technical  points  connected  with  the  complaint  and  the 
decree  of  sale." 


Co.   V.   Tomlinson,  3  Hun  (N.  Y.)         '  Ransom  v.  Sutherland,  46  Mich. 

630  (1875) ;  Tormey  v.  Gerhart,  41  489  (1881). 

Wis.  54  (1876) ;  Baird  v.  McConkey,  *  Ransom  v.  Sutherland,  46  Mich. 

20  Wis.  297  (1866).  489  (1881). 

•  Bicknell  v.  Byrnes  23  How.  (N.  *  See  ante  chap.  xxi. 

Y.)  Pr.  486,  490  (1862) ;  Moore  v.  »  See  ante  §§  213-216,  238. 

Shaw,  15  Hun  (N.  Y.)  428  (1878).  '  See  anU  §§  215,  216. 

«  McCrickett  v.  Wilson,  50  Mich.  «  See  ante  §§  209-212,  237. 

513  (1883) ;  Gies  v.  Green,  42  Mich.  »  See  ante  §§  194-199. 

107  (1879) ;    Clapp  v.  Maxwell,  13  •<>  See  ante  %%  200-204. 

Neb.  542  (1882). 


CHAPTER  XXX. 


RECEIVER— PRACTICE    ON    APPOINTMENT. 

NATURE  AND  OBJECT  OF  OFFICK-MODES  OF  APPOINTMENT- APPLI- 
CATION   FOR  -  WHAT    MUST    BE    SHOWN  -  APPOINTMENT    BY 
REFEREE-ORDER  APPOINTING— RIGHTS,  POWERS,  DUTIES. 


§  633.  Introfluctory-Right  of  mort- 
gagor to  rents  and  prolJts. 

624.  Nature  of  office  of  receiver. 

625.  Object  of  office  of  receiver. 

626.  Appointment  of  receiver. 

627.  When   receiver  will   be  ap- 

pointed— Prima  facie  case. 

628.  Rules  for  the  appointment  of 

a  receiver. 

629.  Modes  of  appointment. 

G30.  Jurisdiction  of  the  court  to 
appoint  a  receiyer. 

631.  Doctrine  in  various  states. 

632.  Appointment  of  receiver  by 

federa,!  courts. 

633.  Manner  of  appointing  receiver 

— Motion  or  petition. 

634.  Appointment  of  receiver  by 

the  court. 

635.  On  what  papers  application 

for  receiver  made. 

636.  Notice    of    application    for 

receiver. 

637.  Appointment  of  receiver  on 

ex  parte  application. 

638.  What  the  application  must 

show. 

639.  Objections  to  appointment  of 

receiver. 

640.  Appointment  of  receiver  by 

referee  or  master. 


§  641.  Report  of  referee  or  master. 

642.  Order  of  appointment  on  re- 

port of  referee  recommend- 
ing proper  person. 

643.  Order    of    appointment    by 

referee. 

641.  Order    of    appointment    by 
court — Appeals. 

615.  Contents  of  order  appointing 

receiver — Powers  defined — 
Property  described. 

616.  Proposal    of    names   for  re- 

ceiver. 

647.  Ineligibility  to  be  appointed 

a  receiver. 

648.  From   wliat  time  a  receiver 

considered  as  appointed. 

619.  Bond  of  receiver. 

650.  Effect    of    appointment    of 

receiver. 

651 .  JuHsdiction  of  recelTer. 

653.  Nature  of  receiver's  posses- 
sion. 

653.  Rights    and  powers    of    re- 

ceivers. 

654.  Rights  and  duties  of  receiTers. 

655.  Rents  bound   from   date  of 

appointment  of  receiver. 

656.  Personal  liability  of  receivers. 


§  623.  Introductory — Right  of  morlgagor  to  rents  and 
profits. — In  those  states  where  the  right  of  entry  by  the 
mortgagee  has  been  abolished  by  statute,  the  mortgagor  is 
entitled,  both  in  law  and  in  equity,  to  the  complete  enjoy- 
ment of  the  mortgaged  premises,  and  of  the  rents  and 
profits    thereof,    unless    such    rents  and  profits   have    been 

7-W 


§  624.]  INTEODirCTORT. 


T45 


pledged,  by  an  express  stipulation  in  the  mortgage,  for  the 
payment  of  the  debt/  And  where  no  proceedings  are 
instituted  for  the  appointment  of  a  receiver  to  take  charge  of 
the  rents  and  profits,  the  right  of  the  mortgagor  to  receive 
them  will  continue  until  it  is  divested  by  a  foreclosure  and 
sale,  and  even  after  a  sale,  until  the  purchaser  becomes 
entitled  to  the  possession  of  the  premises  under  the  referee's 
deed  ;'  such  right  will  be  terminated  only  upon  producing  to 
the  occupant  of  the  premises  the  deed  of  the  referee  or  other 
officer  conducting  the  sale.* 

But,  in  all  cases  where  the  security  is  insufficient,  and  the 
mortgagor,  or  other  party  who  is  personally  liable  for 
the  payment  of  the  debt,  is  insolvent,  the  mortgagee  may 
have  a  receiver  appointed  to  take  charge  of  the  mortgaged 
premises  and  of  such  of  the  rents  and  profits  as  have  not 
yet  been  collected,  unless  the  mortgagor  or  other  person 
entitled  to  the  possession  gives  security  to  account  for  the 
rents  and  profits,  in  case  there  is  a  deficiency.* 

§  624.  Nature  of  office  of  receiver.— A  receiver  is  a 
disinterested  person,  as  between  the  parties  to  a  foreclosure, 
appointed   to   collect   the  rents,  issues  and  profits  of   the 

>  Syracuse  City  Bank  v.  Tallman,  Hun  (N.  T.)  183,  186  (1879) ;  Astor 

81  Barb.   (N.  Y.)  201,    208  (1857);  v.  Turner,  11  Paige  Ch.  (N.  Y.)  436 

Zeiter  v.  Bowman,  6  Barb.  (N.  Y.)  (1845);  s.  c.  43  Am.  Dec.  766 ;  Howell 

133,  139  (1849) ;  Ensign  v.  Colburn,  v.  Ripley,  10  Paige  Ch.  (N.  Y.)  43 

•  11  Paige  Ch.  (N.   Y.)  503   (1845) ;  (1843) ;  Clason  v.  Corley,  5  Sandf . 

Howell  V.  Ripley,  10  Paige  Ch.  (N.  (N.  Y.)  447  (1852);  Lofsky  v.  :Maujer, 

T.)  43  (1843) ;  Bank  of  Ogdensburg  3  Sandf.  Ch.  (N.  Y.)  69  (1845). 

V.  Arnold,  5  Paige  Ch.  (N.  Y.)  38,  »  N.  Y.  Supreme  Court  Rule  61. 

41  (1835).     See  ante  %  588.  See  Clason  v.  Corley,  5  Sandf.  (N. 

8  See  Argall  v.  Pitts,  78  N.  Y.  239  Y.)  447  (1852). 

(1879) ;  iMitchell  v.  Bartlett,  51  N.  ■•  Syracuse  City  Bank  v.  Tallman, 

Y.  447  (1873) ;  Cheney  v.  Woodruff,  31  Barb.  (N.  Y.)  201  (1857) ;   Shot- 

45  N.  Y.  98,  101  (1871) ;  Whalin  v.  well  v.  Smith,  3  Edw.  Ch.  (N.  Y.) 

White,  25  N.  Y.  462,  465  (1862);  588(1842);  Smith  v.  Tiffany,  13  Hun 

GUes  'v.    Comstock,  4  N.  Y.   270,  (N.  Y.)  671  (1878) ;  Astor  v.  Turner, 

275  (1850) ;  B.  c.  53  Am.  Dec.  347  ;  11  Paige  Ch.  (N.  Y.)436  (1845) ;  s.  c. 

>Iiuer  V.  Beekman,  11  Abb.  (N.  Y.)  43  Am.  Dec.  766  ;  Howell  v.  Ripley, 

Pr.  "N.  S.  147,  152  (1870) ;  8.  c.  42  10  Paige  Ch.  (N.  Y.)  43  (1843) ;   Sea 

How  (N.  Y.)  Pr.  33,  37 ;  33  N.  Y.  Ins.  Co.   v.  Stebbins,  8  Paige  Ch. 

Supr.  Ct.  Rep.  (1  J.  &  S.)  67,  77;  (N.  Y.)  565(1841);  Main  v.  Ginthert, 

Peck  V.  Knickerbocker  Ice  Co.,  18  92    Ind.   180  (1883);    Connelly  v. 


746 


NATUPvE    OF    OFFICE    OF    KECEIVER. 


[§  624. 


mortgaged  premises  pending  the  suit,'  where  it  does  not 
seem  just  and  prudent  to  the  court  that  any  of  the  parties 
to  the  action  should  be  permitted  to  collect  them.' 

It  is  the  duty  of  a  receiver  to  take  charge  of  the  prop- 
erty pending  the  litigation ;  to  preserve  it  from  waste  or 
destruction ;  to  receive  the  rents  and  profits,  and  to  dispose 
of  them  under  the  direction  of  the  court.'  Pie  is  simply  to 
protect  and  care  for  the  property  or  the  fund  entrusted  to 
him,*  and  to  make  no  disposition  of  it  until  directed  by  the 
court,  from  which  alone  he  derives  his  authority,* 

He  is  a  ministerial  officer  of  the  court,'  and  his  term  of  office 
continues  only  during  the  pendency  of  the  suit,  unless  it  is 
otherwise  directed  by  the  order  appointing  him.'  He  is  the 
mere  hand  of  the  court  in  the  management  of  the  property 
or  the  fund.'  His  appointment  is  on  behalf  of  all  the  parties 
to  the  action,'  and  not  of  the  plaintiff  or  the  defendant  only  ;'" 


Dickson,  76  Ind.  440  (1881) ;  Myers 
V.  Estell,  48  Miss.  373  (1873). 

'  Wliere  a  court  ordered  money 
raised  by  attachment  to  be  deposited 
with  a  designated  banker,  upon  con- 
dition that  he  pay  seven  per  centum 
interest  thereon  while  in  his  hands, 
it  was  held  that  such  banker  was 
not  a  receiver.  Coleman  v.  Salis- 
bury, 52  Ga.  470  (1874). 

*  Chautauqua  County  Bank  v. 
White,  6  Barb.  (N.  Y.)  589,  597 
(1849) ;  Booth  v.  Clark,  58  U.  S.  (17 
How.)  323,  331  (1854);  bk.  15  L. 
ed.  164 ;  Edw.  on  Rec.  2 ;  Wyatfs 
Practice  Reg.  355;  Dan.  Ch.  Pr. 
1552;  2  Barb.  Ch.  Pr.  (2d  ed.)  658. 

^  Green  v.  Bostwick,  1  Sandf.  Ch. 
(N.  Y. )  185  ( 1843 )  ;  Beverley  v. 
Brooke,  4  Gratt.  (Va.)  187  (1847); 
Booth  V.  Clark,  58  U.  S.  (17  How.) 
323,  331  (1854) ;  bk.  15  L.  ed.  164. 

*  A  receiver  is  not  a  trustee  of  an 
express  trust.  Fichtenkamm  v. 
Games,  68  Mo.  289  (1878). 

*  Lottimer  v.  Lord,  4  E.  D. 
Smith  (N.  Y.)  183  (1855). 


«  Field  V.  Jones,  11  Ga.  418  (1852); 
Maguire  v.  Allen,  1  Ball  &  B.  75 
(1809);  Bryan  v.  Cormick,  1  Cox 
Ch.  422,  423  (1788) ;  Angel  v.  Smith. 

9  Ves.  335  (1804). 

'  Weems  v.  Lathrop,  43  Tex.  207 
(1875)  ;  j\Ieier  v.  Kansas  Pac.  Ry. 
Co.,  5  Dill.  C.  C.  476  (1878) ;  8.  c.  6 
Rep.  642. 

*  Richards  v.  Chesapeake  &  O.  R. 
R.  Co..  1  Hughes  C.  C.  28  (1877); 
VanRensselaer  v.  Emery,  9  How.  (N. 
Y.)  Pr.  135  (1854). 

'  But  he  represents  no  interest  of 
a  stranger  to  the  suit  in  which  he 
was  appointed.     Howell  v.  Ripley, 

10  Paige  Ch.  (N.  Y.)  43  (1843). 

'"  See  Davis  v.  Marlborough,  2 
Swans.  113,  125  (1818) ;  Hutchinson 
v.  Massareene,  2Ball  &  B.  55  (1811). 
Junior  mortgagees  may,  however, 
by  superior  diligence  in  having  a 
receiver  appointed,  acquire  a  senior 
right  to  the  rents  and  profits  col- 
lected. See  Post  V.  Dorr,  4  Edw. 
Ch.  (N.  Y.)  412  (1844);  Howell 
V.     Ripley,     10     Paige    Ch.     ( N. 


§  625.] 


OBJECT  OP  OFFICE   OF  EEOEIVEB, 


74:7 


and  for  the  benefit  of  all  who  may  establish  an  interest  in 
the  property.* 

§  625.  Object  of  office  of  receiver.  —  The  object  of 
obtaining  the  appointment  of  a  receiver  is  generally  to  gain 
a  priority  of  lien  on  the  rents  and  profits  of  the  premises,  so 
that  the  court  will  have  the  power  of  directing  their  appli- 
cation to  the  payment  of  the  plaintiff's  claim  ;'  a  receiver 
can  not  properly  be  appointed  where  the  court  does  not 
have  such  power.*  The  immediate  and  actual  cause  for  the 
appointment  of  a  receiver  in  a  foreclosure,  is  to  secure 
the  rents  and  profits  of  the  mortgaged  premises  in  advance 
of  the  final  judgment,  in  order  that  they  may  be  applied 
towards  any  deficiency  that  may  exist  between  the  amount 
of  the  incumbrances  and  the  amount  for  which  the  property 
may  sell  under  the  foreclosure.  Courts  have  no  authority 
to  interfere  with  the  mortgagor's  right  to  receive  the  rents 
and  profits  of  the  mortgaged  property,  unless  such  rents  and 
profits,  as  well  as  the  property,  have  been  pledged  as  security 
for  the  debt,*  or  unless  the  security  is  clearly  insufficient.* 


Y.)  43  (1843);  Miltenberger  v. 
Logansport  R.  R.  Co.,  106  U.  8. 
(16  Otto),  286  (1882) ;  bk.  37  L.  ed. 
117;  s.  c.  1  Sup.  Ct.  Rep.  140; 
Thomas  v.  Brigstocke,  4  Russ.  Ch. 
64  (1827). 

>  Porter  v.  Wimams,  9  N.  Y.  142 
(1853) ;  s.  c.  59  Am.  Dec.  519.  See 
Curtis  V.  Leavitt,  15  N.  Y.  9  (1857) ; 
GUlet  V.  Moody,  3  N.  Y.  479  (1857); 
Booth  V.  Clark,  58  U.  S.  (17  How.) 
823,  331  (1854) ;  bk.  15  L.  ed.  164 ; 
Davis  V.  Marlborough,  2  Swans. 
113,  125  (1818). 

*  Evans  v.  Coventry,  3  Drew.  80 
(1854);  Tullett  v.  Armstrong,  1 
Keen,  428  (1836) ;  Owen  v.  Homan, 
4  H.  L.  1032  (1858). 

»  Howell  V.  Ripley,  10  Paige  Ch. 
(N.  Y.)  43  (1843);  Evans  v.  Coventry, 
8  Drew.  80  (1854);  Wright  v.  Vernon, 
8  Drew.  121  (1855).  Yet  a  receiver  is 
sometimes  appointed  to  take  charge 


of  property  in  which  a  stranger  has  an 
interest.  Vincent  v.  Parker,  7  Paige 
Ch.  (N.  Y.)  65  (1838).  In  such  a 
case  the  court  will,  from  time  to 
time,  make  such  orders  as  will  pro- 
tect the  rights  of  the  third  party. 
Vincent  v.  Parker,  7  Paige  Ch.  (N. 
Y.)  65  (1838). 

*  See  Syracuse  City  Bank  v.  Tall- 
man,  31  Barb.  (K  Y. )  201,  208 
(1857) ;  Zeiter  v.  Bowman,  6  Barb. 
(K  Y.)  133.  139  (1849) ;  Ensign  v. 
Colbum,  11  Paige  Ch.  (N.  Y.)  503 
(1845) ;  Howell  v.  Ripley,  10  Paige 
Ch.  (N.  Y.)  43  (1843) ;  Bank  of 
Ogdensburg  v.  Arnold,  5  Paige  Ch. 
(N.  Y.)  38,  41  (1835). 

*  Shotwell  V.  Smith,  3  Edw.  Ch. 
(N.  Y.)  588  (1842) ;  Bank  of  Ogdens- 
burg  V.  Arnold,  5  Paige  Ch.  (N.  Y.) 
38  (1835)  ;  Quincy  v.  Cheeseman,  4 
Sandf.  Ch.  (N.  Y.)  405  (1846). 


748  APPOLNTMENT    OF    RECEIVER.     [§§  626-627. 

A  receiver  stands  indifferent  between  the  parties.'  and  is 
in  no  sense  accountable  or  subject  to  the  control  of  any 
party  to  the  suit ;'  he  is  to  be  guided  only  by  the  order 
appointing  him,  and  by  the  rules  and  practice  of  the  court.* 
As  he  represents  all  the  parties,  it  is  his  duty  to  act  in  all 
things  with  a  view  to  the  equitable  rights  of  all  parties  inter- 
ested, and  to  protect  the  property  and  funds  in  his  hands  to 
the  best  of  his  ability.* 

§626.  Appointment  of  receiver.  —  The  plaintiff  in  a 
foreclosure  is  entitled  to  the  appointment  of  a  receiver  of 
the  rents  and  profits  of  the  mortgaged  premises  pending  the 
suit,*  where  it  is  highly  probable  that  the  premises  will  not, 
upon  a  sale  thereof  under  a  decree  of  foreclosure,  bring  a 
sufficient  sum  to  pay  the  debt  and  the  costs  of  the  suit,  and 
the  mortgagor,  or  other  party  who  is  personally  liable  for  the 
debt,  is  insolvent.* 

A  receiver  will  be  appointed  only  on  the  application  of  a 
person  who  has  an  acknowledged  interest  in  the  suit ;' 
his  appointment  will  continue  during  the  pendency  of  the 
suit,  unless  his  term  of  ofifice  is  limited  by  the  order  appoint- 
ing him.* 

§  627.  When  receiver  will  be  appointed — Prima  facie 
case. — To  entitle  a  mortgagee  to  the  appointment  of  a 
receiver,  it  must  appear  that  the  mortgaged  premises  are  an 


>  Vermont  &  C.  R.  R.  Co.  v.  Ver-  *  Iddings  v.  Bruen,  4  Sandf.  Ch. 

mont    Cent.   R.   R.   Co.   34  Vt.    1  (N.    Y.)    417    (1846) ;   Lottimer    v. 

(1861).  Lord,  4  E.   D.   Smith  (N.  Y.)  183 

"Libby   v.    Rosekrans,   55  Barb.  (1855). 

(N.   Y.)  203  (1869);    Musgrove  v.  ^  In   California  the   plaintiff  for- 

Nash,  3  Edw.  Ch.  (N.  Y.)  172  (1837);  merly  had  no  right  to  have  a  receiver 

Lottimer  v.   Lord,  4  E.    D.  Smith  of  the  rents  and  profits  of  the  land 

(N.  Y.)  183  (1855);  Baker  V.  Backus,  appointed    pending    a    foreclosure. 

32  111.  79  (1863)  ;  Booth  v.  Clark,  58  Guy  v.  Ide,  6  Cal.  79  (1856) ;  8.  c.  65 

TJ.  S.  (17  How.)  323,  331  (1854) ;  bk.  Am.  Dec.  490. 

15  L.  ed.  164.  e  j^^^^y  y  Turner,  2  Barb.  (N.  Y.) 

«  Musgrove  v.  Nash,  3  Edw.  Ch.  444  (1848) ;  s.  c.  3  How.  (N.  Y.)  Pr. 

(N.    Y.)   172  (1837).     See  Broad  v.  225  ;  Sea  Ins.Co.v.  Stebbins,  8  Paige 

Wickham,  M.    S.    S.    Case,    (1831),  Ch.  (N.  Y.)  585  (1841) ;  3  Barb.  Ch. 

cited  in  1  Smith's  Ch.  Pr.  500;   1  Pr.  (2d  ed.)  293.     See  ante  %  623. 

VanSant  Eq.  Pr.  375.  '  Chases  Case,  1  Bland.  Ch.  (Md.) 


§  627.] 


WHEN   EECEIVEB   APPOINTED. 


749 


insufficient  security  for  the  debt,  and  that  the  mortgagor,  or 
other  party  personally  liable  for  the  debt,  is  insolvent.*  A 
receiver  should  be  appointed  only  where  there  is  a  real 
necessity  for  it.'  In  an  action  by  a  mortgagor  to  redeem,  a 
receiver  will  not  be  appointed  as  against  the  mortgagee  in 
possession,  as  long  as  there  is  a  balance  due  him  on  the 
mortgage  debt,  unless  he  is  mismanaging  the  property.* 

Receivers  in  mortgage  foreclosures  are  appointed  with 
great  caution,*  and  it  is  only  in  clear  cases  that  they  will  be 
appointed  at  all,*  as  where  the  rights  of  a  suitor  are  appar- 
ently well  established  and  can  be  preserved,  pending  the 
suit,  only  by  a  receiver.* 

The  right  to  the  relief  does  not  grow  out  of  the  legal 
relations  of  the  parties,  nor  out  of  the  stipulations  in  the 
mortgage,  but  out  of  equitable  considerations  alone.  The 
appointment  of  a  receiver  in  a  mortgage  foreclosure  is  not  a 


213(1826);  s.  C.  17  Am.  Dec.  277; 
Williams  v.  Wilson,  1  Bland.  Ch. 
(Md.)  421  (1826). 

•  Weemes  v.  Lathrop,  42  Tex,  207 
(1875).     See  ante  %  624. 

'  Burlingame  v.  Parce,  12  Hun 
(N.  Y.)  148  (1877) ;  Frelinghuysen 
V.  Golden,  4  Paige  Ch.  (N.  Y.)  204 
(1833).  Under  the  Michigan  statute, 
Comp.  L.  §§  62,  63,  a  mortgagee  is 
excluded  from  possession  until  he 
acquires  an  absolute  title.  Whether 
or  not  a  clause  in  the  mortgage,  giv- 
ing him  possession  in  case  of  default, 
can  be  carried  into  effect  in  view  of 
this  provision,  by  appointing  a  re- 
ceiver on  foreclosure,  it  certainly 
can  not  be  done  until  after  default, 
and  it  would  even  then  be  a  matter  of 
discretion.  Beecher  v.  Marq.  &  Pac. 
Rolling  Mill  Co.,  40  Mich.  307 
(1879). 

*  Quincy  v.  Cheeseman,  4  Sandf. 
Ch.  (N.  Y.)  405  (1846) ;  McLean  v. 
Presley,  56  Ala.  211  (1876) ;  First 
Nat.  Bank  v.  Gage,  79  111.  207 
(1875) ;  Callahan  v.  Shaw,  19  Iowa. 


188  (1865);  Oldham  v.  First  Nat. 
Bank,  84  N.  C.  304  (1881) ;  Mor- 
rison V.  Buckner,  Hempst.  C.  C. 
442  (1843). 

*  Patten  v.  Accessory  Transit  Co., 
4  Abb.  (N.  Y.)  Pr.  237  (1857)  ;  Bol- 
les  V.  Dufi,  35  How.  (N.  Y.)  Pr.  481 
(1867);  Boston,  &c.,  R.  R.  Co.  v. 
New  York,  «&c.,  R.  R.  Co.,  12  R.  I. 
220  (1878) ;  Rowe  v.  Wood,  2  Jac. 
&  W.  553  (1822)  ;  Berney  v.  Sewell, 
1  Jac.  &  W.  647  (1820) ;  QuarreU  v. 
Beckford,  13  Ves.  377  (1807). 

*  Warner  v.  Gouverneur,  1  Barb. 
(N.  Y.)  36  (1847);  Shotwell  v.  Smith, 
3  Edw.  Ch.  (N.  Y.)  588  (1842) ;  Sea 
Ins.  Co.  V.  Stebbins,  8  Paige  Ch. 
(N.  Y.)  565  (1841) ;  Jenkins  v.  Hln- 
man,  5  Paige  Ch.  (N.  Y.)  309  (1835); 
Frelinghuyssn  v.  Golden,  4  Paige 
Ch.  (N.  Y.)  204  (1833). 

*Hand  v.  Dexter,  41  Ga.  454 
(1871).  See  Sales  v.  Lusk,  60  Wis. 
490  (1«84). 

^  Overton  v.  Memphis  &  L.  R.  R. 
Co..  3  McCr.  C.  C.  436  (1882)  ;  8.  c. 
10  Fed.  Rep.  866. 


750 


"WHEN  KECEIVER  ArrOINTED. 


[§  r,28. 


matter  of  strict  or  absolute  right,  but  is  purely  an  equitable 
one,  and  is  always  addressed  to  the  sound  discretion  of  the 
court,'  to  be  governed  by  all  the  circumstances  of  the 
case.*  The  plaintiff  must  always  set  forth  a  prima  /arte 
case,*  and  a  probable  right  to  the  property  which  is  the 
subject  matter  of  the  litigation  or  foreclosure.* 

§  628.  Rules  for  the  appointment  of  a  receiver. — No 
positive  and  unvarying  rule  can  be  laid  down  as  to  when  a 
court  will  or  will  not  interfere  by  this  kind  of  interim  pro- 
tection of  the  property.*  Where  the  evidence  on  which  the 
court  is  to  act,  is  very  clearly  in  favor  of  the  plaintiff,  there 
should  be  no  hesitancy  about  interfering  ;  but  where  the 
evidence  is  weak  there  will,  of  course,  be  more  difficulty. 
The  question  is  one  of  degree,  and  it  is,  therefore,  impossible 
to  state  any  precise  and  unvarying  rules.' 

A  receiver  should  not  be  appointed  in  any  instance  unless 
the  plaintiff  makes  out  2i  prima  facie  case,  and  unless  it  also 
appears  that  the  property  is  in  danger  of  being  lost  or 
materially  injured  before  the  final  judgment  is  entered  in  the 
action.'     In   some    cases,    the    propriety    of    appointing    a 


'  See  Rider  v.  Bagley,  84  N.  Y.  461 
(1881) ;  Syracuse  Bank  v.  Tallman, 
31  Barb.  (N.  Y.)  201  (1857)  ;  The 
Orphan  Asylum  v.  McCartce, 
Hopk.  Ch.  (]S.'Y.  )  429  (182.5); 
"Verplank  v.  Caines,  1  Johns.  Ch. 
(N.  Y.)  57  (1814)  ;  Pullau  v.  Cincin- 
nati &  C.  A.  L.  R.  R.  Co.,  4  Biss. 
C.  C.  35  (1865) :  Crane  v.  McCoy,  1 
Bond  C.  C.  422  (1860);  Vose  v. 
Reed,  1  'Wood  C.  C.  647  (1871).  See 
Copper  Hill  Mining  Co.  v.  Spencer, 
25  Cal.  11,  13  (1864)  ;  West  v.  Chas- 
ten. 12  Fhi.  315,  332  (186S) ;  Ben- 
neson  v.  Bill,  62  Til.  408(1872);  Con- 
nelly V.  Dickson,  76  Ind.  440  (1881); 
Jacobs  V.  Gibson,  9  Neb.  380(1879); 
Oakley  v.  Patterson  Bank,  2  N.  J. 
Eq.  (1 H.  W.  Green),  181  (1839);  Sloan 
V.  Moore,  37  Pa.  St.  217  (1860);  Cone 
V.  Paute,  12  Heisk.  ( Tenn.  )  506 
(1873)  ;  Sales  v.  Lusk,  60  Wis.  490 


(1884) ;  ilihvavikee  &  M.  R.  R.  Co. 
V.  Soulter.  69  U.  S.  (2  AVall.)  510 
(1864) ;  bk.  17  L.  ed.  900 ;  Owen  v. 
Ilonian,  3  Mac.  &  G.  378  (1851) ; 
Skip  V.  liar  wood,  3  Atk.  564  (1747). 

*  Proof  of  the  in^^olvency  of  the 
party  personally  liable  for  the  pa^'- 
nient  of  the  mortgage  debt  is  not 
always  required.  Ponder  v.  Tate, 
96  Ind.  330  (1884). 

*  Copper  Ilill  Alining  Co.  v.  Spen- 
cer, 25  Cal.  16  (18G4);  Owen  v. 
Hnman,  3  Mac.  &  G.  378  (1851). 

■»  Saylor  v.  Mockbie,  9  Iowa,  209 
(1859).' 

*  Kerr  on  Rec.  4. 

*  Owen  V.  Homan,  4  II.  L.  1033 
(1853);  Gray  v.  Chaplin,  2  Russ. 
145  (1826). 

'  Hamilton  v.  The  Accessory  Tran- 
sit Co.,  3  Abb.  (N.  Y.)  Pr.  255 
(1856)  ;  8.  c.  13  How.  (N.  Y.)  Pr.  108. 


§  628.]  EULES    FOR    APPODHTN'G    EECEIYEE.  Tol 

receiver  can  not  be  determined  until  the  trial.'  As  a  general 
rule,  a  receiver  will  be  appointed  in  every  case  where  the 
interests  of  the  parties  seem  to  require  it." 

In  no  case  of  a  mortgage  foreclosure  should  a  receiver  be 
appointed,  if  it  is  clear  that  on  a  forced  sale  of  the  mort- 
gaged property,  it  will  bring  an  amount  sufficient  to  pay  the 
debt,  costs  and  expenses  of  the  suit  ;'  nor  in  general,  if 
the  mortgagor,  or  other  party  personally  liable  for  the 
payment  of  the  debt,  is  solvent/  But  an  application  should 
be  denied  on  the  merits  only,  and  not  on  merely  technical 
grounds.* 

The  appointment  of  a  receiver  must  in  all  cases  be  dis- 
pensed with,  if  the  defendant,  who  is  in  possession  of  the 
premises,  gives  security  to  account  for  the  rents  and  profits, 
in  case  there  is  a  deficiency  upon  the  sale  under  the  decree 
of  foreclosure.* 

In  determining  whether  a  receiver  of  the  rents  and  profits 
of  mortgaged  premises  shall  be  appointed,  the  court  must 
deal  with  the  cause  as  it  appears  from  the  pleadings  and 
evidence  and  stands  upon  the  record.^  If  the  court  is  satisfied 
from  the  evidence  before  it,  that  it  is  necessary  or  expedient 
to  preserve  the  property  and  to  accumulate  the  rents,  issues 
and  profits  thereof  until  the  trial,  a  case  will  be  made  out  for 
the  appointment  of  a  receiver.* 


>  Verplank  v.  Caines,  1  Johns.  Ch.  *  Sea  Ins.  Co.  v.  Stebbins,  8  Paige 

(N.  Y.)  57  (1814).  Ch.   (N.  Y. )  565  ( 1841 ) ;  Bank  of 

*  Crane  v.  McCoy,  1  Bond  C.  C.  Ogdensburg  v.  Arnold,  5  Paige 
422(1860).  Ch.  (N.  Y.)  38  (1835) ;   Frelinghuy- 

»  Shotwell  V.  Smith,  8  Edw.  Ch.  sen  v.  Colden,  4  Paige  Ch.  (N.  Y.) 

(N.  Y.)  588  (1842) ;  Burlingame  v.  204  (1833). 

Parce,  12  Hun  (N.  Y.)  144  (1877) ;  '  Silver  v.  Nonvich,  3  Swans.  112 

Pullan  V.  Cincinnati  &  C.  A.  L.  R.  n  (1816) ;  Skinner's  Society  v.  Irish 

R.  Co.,  4  Biss.  C.  C.  35  (1865).  Society,  1  M.  &  C.  164(1836);  Evans 

*  Syracuse  City  Bank  y.  Tallman,  v.  Coventry,  5  DeG.  M.  &  G.  911, 
31  Barb.  (N.  Y.)  201  (1857) ;  Jen-  918  (1854) ;  8.  c.  31  Eng.  L.  &  Eq. 
kins  v.  ffinman,  5  Paige  Ch.  (N.  Y.)  436. 

809  (1835).  *  Hugonin  v.  Basely,  13  Ves.  107 

*  Patten  v.  Accessory  Transit  Co.,  (1806) ;  Davis  v.  JIarlborough,  3 
4  Abb.  (N.  Y.)  Pr.  235  (1857) ;  Svrans.  138  (1819);  Owen  v.  Homan, 
Evans  v.  Coventry,  5  DeG.  M.  &  G.  3  Mac.  «&  G.  412  (1851) ;  s.  c.  4  H. 
911  (1854);  8.  c.  31  Eng.  L.  &Eq.  436.  L.  1033;  Whitworth  v.  "Whyddon,  3 


752  APPOINTTNG   EECEIVEr..  [§§  629-630. 

§  629.  Modes  of  appointment. — The  appointment  of  a 
receiver  may  be  made  in  either  of  three  ways:  (i)  He 
may  be  appointed  by  an  order  made  directly  by  the  court 
on  a  motion  for  a  receiver,  by  naming  the  person  to  be 
receiver,  prescribing  the  amount  of  his  bond  and  the  number 
of  his  sureties,  and  stating  his  duties  in  general  terms  ;  or, 
if  the  decision  of  the  court  is  reserved  on  the  argument  of 
the  motion,  and  is  filed  subsequently,  then,  by  giving  a  brief 
general  direction  in  the  decision  as  to  the  form  of  the  order, 
naming  the  receiver  in  blank,  to  be  filled  in  by  the  judge 
himself,  if  the  parties  do  not  agree  upon  a  receiver  on  notice 
of  settlement ;'  (2)  the  appointment  of  a  receiver  may  also 
be  made  on  the  confirmation  of  the  report  of  a  referee* 
appointed  by  the  court  to  hear  the  application  and  to  report 
a  proper  person  ;'  (3)  it  may  be  made  by  a  referee  authorized 
by  the  court  to  appoint  a  receiver.*  The  latter  was  formerly 
the  more  usual  course  and  practice.* 

§  630.  Jurisdiction  of  the  court  to  appoint  a  receiver. 
— A  court  has  no  jurisdiction  to  appoint  a  receiver  except 
in  an  action  which  is  pending,'  unless,  perhaps,  in  a  case 
where  the  defendant  designedly  avoids  service  of  the  pro- 
cess.'' A  judge  has  no  power  in  vacation  to  appoint  a 
receiver  ;*  neither  has  a  clerk  of  the  court  power  to  approve 


Mac.  &  G.  55  (1850) ;  Clegg  v.  Fish-  «  3  Wait  Pr.  230. 

wick,  1  Mac.  &  G.  299  (1849).  «  Hardy  v.   McClellan,   53   Miss. 

>  1  VanSant.  Eq.  Pr.  405.  507(1876);  Anon.,  1  Atk.  489(1738); 

'  The   referee  is  a  substitute  in  Wyatt's  Prac.  Reg.  356. 

New  York  for  the  former  master  in  '  Sandford  v.  Sinclair,  3  Edw.  Ch. 

chancery.     Wetter  v.   Schlieper,  7  (N.  Y.)  393  (1840) ;  Quinn  v.  Gunn, 

Abb.  (N.  Y.)  Pr.  92  (1854).  1  Hogan.  75  (1817). 

»  Attorney  -  General  v.    Bank    of  *  Newman  v.  Hammond,  46  Ind. 

Columbia,  1  Paige  Ch.  (N.  Y.)  511  119    (1874).      It  was  said  by  the 

(1829) ;  2  Barb.  Ch.  Pr.  (2d  ed.)  311,  supreme  court  of  the  United  States 

812.  in  the  case  of  Hammock  v.  Loan  & 

*  The  selection  and  appointment  of  Trust  Co.,  105  U.  S.  (15  Otto),  77 

a  receiver,  and  the  taking  of  security  (1881);   bk.  26  L.  ed.  1111,  that  a 

from  him,  are  proper  matters  of  refer-  judge  of  a  circuit  court  of  Blinoia 

ence  under  the  Code,  as  they  were  can  not  appomt  a  receiver  in  vaca- 

under  the  former  practice  in  chan-  tion. 
eery.     Wetter  v.  Schlieper,  7  Abb. 
(N.  Y.)  Pr.  92  (1854). 


§  630.]         JURISDICTION^    OF    COUKT   TO    APPOINT.  753 

a  receiver's  bond  in  vacation.*  A  court  commissioner  has  no 
jurisdiction  to  appoint  a  receiver."  Neither  should  a  receiver 
be  appointed  by  a  judge  in  chambers.  The  appointment 
must,  in  all  cases,  be  made  by  the  court.* 

Where  property  has  been  lawfully  placed  under  the  cus- 
tody and  control  of  a  receiver  by  a  court  having  authority 
to  appoint  him,  no  other  court  will  have  any  right  to  inter- 
fere with  such  receiver,  unless  it  is  some  court  which  has  a 
direct  supervisory  control  over  the  court  under  whose  pro- 
cess the  receiver  first  took  possession,  or  which  has  a 
superior  jurisdiction  in  the  premises.*  Where  a  state 
court,  with  full  jurisdiction,  has  properly  appointed  a 
receiver  and  he  is  in  possession  of  the  property,  a  federal 
court  will  have  no  such  superior  jurisdiction  or  supervisory 
power  as  to  warrant  its  interference  with  such  receiver's 
custody  and  control  of  the  property;'  and,  consequently, 
a  United  $tates  court  will  not  appoint  a  receiver  to  take 
possession  of  property  already  ordered  to  be  delivered  to  a 
receiver  appointed  by  a  state  court.' 

A  receiver  appointed  by  a  state  court  over  mortgaged 
premises  in  an  action  for  foreclosure,  can  not  be  dispossessed 
or  interfered  with  by  an  assignee  in  bankruptcy,  subsequently 
appointed  in  a  federal  court  over  the  mortgagor's  estate/ 


'  Newman  v.  Hammond,  46  Ind.  U.  S.  (8  How.)  107,  112  (1850);  bk. 

(1874).  12  L.  ed.  1007  ;  Peck  v.  Jenness,  48 

*  Quiggle  V.  Trumbo,  56  Cal.  626  U.  S.  (7  How.)  612,  625  (1849) ;  bk. 
(1880).  12  L.  ed.  841  ;  In  re  Clark,  4  Ben. 

» Ireland  v.  Nichols,  7  Robt.  (N.  D.  C.  88,  97-98  (1870). 

Y.)476  (1868) ;  s.  c.  37  How.  (N.  Y.)  »  Davis  v.  Alabama  &  F.  R.  R. 

Pr.  22.  Co.,  1  Woods  C.  C.  661  (1873) ;  In 

*  Buck  V.  Colbath,  70  U.  S.  (3  re  Clark,  4  Ben.  D.  C.  88  (1870) ; 
Wall.)  334  (1865);  bk.  18  L.  ed.  257.  Alden  v.  Boston  H.  &  E.  R.  R.  Co., 
See  Freeman  v.  Howe,  65  U.  S.  (24  5  Bankr.  Reg.  230  (1871).  But  see 
How.)  450  (1860) ;  bk  16  L,  ed.  749  ;  contra,  In  re  Merchants'  Ins.  Co.,  3 
Taylor  v.  Carryl,  61  U.  S.  (20  How.)  Biss.  C.  C.  162  (1870). 

583,  594-597  (1857) ;  bk.  15  L.  ed.  « Blake  v.  Alabama  &  C.  R.  R. 

1028  :  Peale  v.  Phipps,  55  U.  S.  (14  Co.,  6  Bankr.  Reg.  331  (1872). 

How.)  368,  374  (1852) ;  bk.  14  L.  ed.  '  Davis  v.  Alabama  &  F.  R.  R. 

459  ;  Wiswall  v.  Sampson,  55  U.  S.  Co.,  1  Woods  C.  C.  661  (1873). 
(14  How.)  52,  66  (1852) ;  bk.  14  L. 
«d,  322;  Williams  v.  Benedict,  43 

m 


754  JURISDICTION YAFJOUS    STATES.     [§§631-632. 

without   first   liquidating   the   debt,  the    possession    of   the 
receiver  being  regarded  as  the  possession  of  the  mortgagee.' 

§  631.  Doctrine  in  various  states.  —  In  California,  a 
receiver  may  be  appointed  by  the  court  in  which  the  action 
is  pending,  or  by  a  judge  thereof ;"  but  a  county  judge  can 
not  appoint  a  receiver  in  a  case  pending  in  a  district  court.* 
It  is  said  that  under  the  Connecticut  Act  of  1867,  the  judge 
should  first  make  an  express  finding,  that  it  is  just  and 
reasonable  that  a  receiver  should  be  appointed.*  Under  the 
constitution  and  laws  of  Florida,  a  receiver  can  not  be 
appointed  by  the  judge  of  one  circuit  to  take  possession  of 
property  in  another  circuit.*  The  powers  of  the  courts 
of  Indiana  in  appointing  receivers,  are  the  same  under  the 
Code  as  under  the  general  rules  of  equity,  and  the  power  will 
be  exercised  for  the  same  purposes  and  in  the  same  emer- 
gencies.' 

In  Kentucky,  in  cases  specified  in  the  Code  of  Practice,  a 
receiver  may  be  appointed  by  the  court. ^  In  Michigan, 
a  court  of  equity  can  not  appoint  a  receiver  except  in  cases 
where  such  appointment  is  allowed  by  the  compiled  laws  of 
the  state  ;*  there  is  no  statute  authorizing  such  a  court  to 
make  an  ex  parte  order  appointing  a  receiver  to  take  posses- 
sion of  real  estate  under  a  foreclosure,  even  though  the  parties 
themselves  agree  upon  a  receiver  under  the  terms  of  the 
mortgage.*  Under  the  Mississippi  Code  of  1880,  a  circuit 
judge  has  no  power  to  appoint  a  receiver  in  a  case  pending 
in  the  chancery  court,  either  in  vacation  or  during  a  term.'* 

§  632.  Appointment  of  receiver  by  federal  court. — A 
state  court  has  no  jurisdiction  to  appoint  a  receiver  in  an  ac- 
tion to  foreclose  a  mortgage,  where  the  premises  were,  at  the 


'  Marshall  v.  Knox,  83  U.  S.  (16  •  Bitting  v.  TenEyck,  85  Ind.  357 

WaU.)  551  (1872)  ;  bk  21  L.  ed.  481.  (1882). 

»  Cal.  Prac.  Act,  §  651.  '  Kentucky  Civil  Code,  §  328. 

»  RuthraufE  v.  Kresz,  13  Cal.  639  •  Mich.  Comp.  L.  §  5070. 

(1859).  »  Hazeltine  v.  Granger,  44  Mich. 

*  Bostwick  V.  Isbell,  41  Conn.  805  503  (1880). 

(1874).  JO  Alexander  v.  Manning,  58  Miss. 

»  State  V.  Jacksonville,  P.  &  M.  684  (1881). 
R.  R.  Co.,  15  Fla.  201  (1875). 


§633.]  EECEIYER    U^s^DEE,    FEDERAL    COURT.  755 

time  of  the  commencement  of  the  action,  in  the  hands  of  a 
receiver  appointed  by  a  federal  court  having  jurisdiction  to 
make  such  appointment ;  and  the  fact  that  the  lien  which  the 
receiver  was  appointed  to  enforce,  is  prior  or  subsequent  to 
the  one  sought  to  be  enforced  in  the  state  court,  will  not  in 
any  way  affect  the  rule.' 

A  court  of  chancery  should  not  appoint  a  receiver  pend- 
ing a  demurrer  to  its  jurisdiction  ;'  nor  if  the  foreclosure 
is  being  defended  on  probable  grounds.'  But  in  order  to  guard 
against  the  abuse  of  dilatory  pleas,  or  any  irreparable  mis- 
chief, the  court  may  order  an  immediate  trial  of  the  action.* 

§  633.  Manner  of  appointing:  receiver —  Motion  or 
petition. — In  an  action  to  foreclose  a  mortgage  a  receiver  may 
be  appointed  on  either  a  motion  or  a  petition,  The  appli- 
cation may  be  heard  on  affidavits  or  on  oral  testimony,  and 
the  appointment  will  be  very  much  in  the  discretion  of  the 
court.'  The  court  may  also  appoint  a  receiver  upon  its  own 
motion  in  a  case  requiring  it.* 

The  motion  for  the  appointment  of  a  receiver  may  be 
made  on  petition,  if  there  should  be  occasion  for  such 
appointment  before  the  complaint  is  actually  served  ;' 
the  hearing  on  such  petition  may  be  held  in  chambers.* 
Under  the  New  York  practice,  the  motion  for  a  receiver 
must  be  made  at  a  special  term  of  the  court,"  and  by  a  plain- 
tiff in  the  action,  a  motion  by  a  defendant  being  irregular," 
except,  perhaps,  where  a  cross-complaint  is  filed  and  made 
the  basis  of  the  motion." 

The  duty  of  the  court  upon  a  motion  for  a  receiver  in  a 
mortgage  foreclosure,  is  merely  to  protect  the  property  and 


>  Milwaukee  &  St.  P.  E.  R.  Co.  v.  «  O'Mahoney  v.  Belmont,  62  N.  Y. 

Milwaukee  «&  M.  R.  R.  Co.,  20  Wis.  133  (1875). 

165  (1865).  ■•  VanSant.  Eq.  Pr.  403. 

»  Ewing  V.  Blight,  3  WalL  Jr.  0.  •  Kilgore  v.  Hair,  19  S.  C.  486 

C.  139  (1855).  (1883). 

8  Shepherd  v.  Murdock,  2  Molloy,  »  2  Barb.  Oh.  Pr.  (2d  ed.)  309,  n  15. 

531  (1830) ;  Darcy  v.  Blake,  1  Mol-  »  Robinson  v.  Hadley,  11  Beav. 

Icy,  247  (1829).  614  (1849). 

*  Ewing  V.  Blight.  8  WalL  Jr.  C.  "  Waters  v.  Taylor,  15  Ves.   10 
C.  139  (1855).  (1807) ;  1  VanSant.  Eq.  Pr.  402. 

•  Hursh  V.  Hur8h,99Ind.  500(1884). 


750         RECEIVER  APPOINTED  BY  COURT.      [§  0o4, 

to  accumulate  the  rents,  issues  and  profits  until  the  deter- 
mination  of  the  suit.'  It  has  long  been  the  practice  on 
amotion  for  a  receiver  in  such  cases  not  tolook  at  junior  mort- 
gagees farther  than  to  see  that  their  rights  are  protected.'  The 
court  will  not,  on  such  a  motion,  encourage  any  attempt  to 
obtain  an  intimation  of  its  decision  on  questions  involved  in 
the  merits  of  the  action.*  The  court  is  bound  to  express  an 
opinion  only  so  far  as  may  be  necessary  to  show  the  grounds 
on  which  the  motion  for  a  receiver  is  decided  ;*  it  is  the 
duty  of  the  court  to  confine  itself  strictly  to  the  appoint- 
ment of  a  receiver,  and  not  to  go  into  the  merits  of  the  case.* 

§  634.    Appointment  of  receiver  by  the  court. —  The 

power  to  appoint  a  receiver  of  the  rents  and  profits  of  mort- 
gaged premises  accruing  pending  a  fioreclosure,  was  inherent 
in  the  court  of  chancery  before  the  adoption  of  the  New 
York  Code  of  Procedure.  It  was  continued  by  that  Code,' 
and  has  been  re-enacted  by  the  provisions  of  the  Code  of 
Civil  Procedure,^  defining  cases  in  which  receivers  may  be 
appointed.* 

Courts  of  equity  have  power  to  appoint  receivers  in  mort- 
gage foreclosures  and  to  authorize  them  to  take  possession 
of  the  mortgaged  property,'  whether  it  is  in  the  personal 
possession  of  the  defendant  or  of  his  agents  or  tenants.'* 
The  appointment  of  a  receiver  is  an  ordinary  exercise  of 
appropriate  chancery  powers ;"  and  there  are  very  few  cases 


'  Blakeney  v.  Dufaur,  15  Beav.  *  See  Hollenbeck  v.  Donnell,  94 

42  (1851).  N.  Y.  342  (1884) ;  Latimer  v.  Moore, 

2  Norway  v.  Rowe.  19  Ves.  153  4  McL.  C.  C.  110  (1846). 

(1813);  Price  V.  Williams,  Coop.  Ch,  »  A  court  may  appoint  a  receiver 

31  (1806);  Brooks  v.  Greathed,  1  Jac.  on  its  own  motion  in  cases  requiring 

&  W.  176  (1820).  it.     O'Mahoney  v.  Belmont,  62  N. 

3  Bates  V.  Brothers,  2  Sm.  &  G.  T.  133  (1875). 

509  (1853).  "  Where   the  property  is  in  the 

*  Kerr  on  Rec.  6,  7.  possession  of  a  tenant  under  a  lease, 
'  Skinner's  Company  v.  Irish  So-  such  tenant  must  be  made  a  party  to 

ciety,    1   Myl.    &  Cr.    164  (1835);  the  action,  or  he  will  not  be  affected 

Evans  v.  Coventry,  5  D.  M.  &  G.  by  nor  be  subject  to  the  order  appoint- 

918  (1854)  ;  Blakeney  v.  Dufaur,  15  ing  the  receiver.     See  ante  §  157. 

Beav.  42  (1852).  i'  Courts  of  equity  have  power  to 

*  §  244.  appoint  receivers  for  the  purpose  of 
'  §  713  protecting  and  securing  the  property 


§§  635-636.]  APPLICATION   PAPERS.  757 

in  which  a  court  of  equity  will  not  have  power  to  interfere 
by  appointing  a  receiver.* 

This  jurisdiction  has  been  assumed  by  the  court  of 
chancery  for  the  advancement  of  justice,  and  is  founded  on 
the  inadequacy  of  the  remedies  afforded  by  courts  of  ordinary 
jurisdiction  ;*  and  on  the  showing  of  a  proper  case  the  court 
will  ex  debit 0  justitice  appoint  a  receiver.* 

§  635.  On  what  papers  application  for  receiver  made. 
— A  motion  for  the  appointment  of  a  receiver  is  generally 
made  on  the  complaint  of  the  plaintiff ;  but  it  may  be  made 
on  affidavits  before  the  complaint  is  served,  when  the  plain- 
tiff can  clearly  satisfy  the  court  that  he  has  an  equitable 
claim  to  the  property,  and  that  a  receiver  is  necessary  to 
preserve  it  from  loss.*  When  affidavits  are  used,  they 
should  show  such  facts  and  circumstances  as  may  be  neces- 
sary to  sustain  the  appointment  ;  copies  of  such  affidavits 
should  be  served  with  the  notice  of  motion.*  If  the  plaintiff 
uses  affidavits,  the  defendant  may  read  counter  depositions.* 

§  636.  Notice  of  application  for  receiver. — As  a  rule,  a 
court  of  equity  will  have  no  jurisdiction  of  a  motion  for  the 
appointment  of  a  receiver  in  a  mortgage  foreclosure,  unless 
notice  of  such  motion  has  been  served  upon  all  the  parties 
adversely  interested.''     Instead  of  a  notice  of  motion,  an 


which  is  the  subject  of  litigation.  <2Barb.  Ch.  Pr.  (2d  ed.)  309-310  ; 

Battle  V.  Davis,  66  N.  C.  252  (1874).  Metcalfe  v.  Pulvertoft,  1  Ves.  «fe  B. 

See  Bank  of  Mississippi  v.  Duncan,  182  (1812) ;  Duckworth  v.  Trafford, 

52  Miss.    740  (1876)  ;    The  Wharf  18  Ves.  283  (1810). 

Case,  3  Bland  Ch.  (Md.)  361  (1841);  «  Goodyear  v.  Betts,  7  How.  (N. 

Williamson  v.  Wilson,  1  Bland  Ch.  Y.)  Pr.  187  (1852) ;  Austin  v.  Chap- 

(Md.)  418,  421  (1826).  man,  11  N.  Y.  Leg.  Obs.  103  (1853); 

'  See  Bainbrigge  v.  Baddeley,  3  Edw.  on  Rec.  77  ;  1  VanSant.  Eq. 

Mac.  &  G.  419  (1853).  Pr.  402. 

»  Skip  V.  Harwood,   3  Atk,   564  *  Edw,  on  Rec.  66 ;  2  Barb.  Ch. 

(1747);  Stitwell  V.  Williams.  6  Madd.  Pr.  (2d  ed.)  310. 

49  ( 1821 ) ;  Davis  v.  Marlborough,  '  Whitehead  v.  Wooten,  43  Miss. 

2  Swanst.  165  (1819) ;  Mitf.  PI.  145.  523  (1870) ;  Vause  v.  Wood,  46  Miss. 

*  Hopkins   v.  Canal   Proprietors,  120  (1871).     Compare  Hardy  v.  Mc- 

L.  R.  6  Eq.  447  (1867).  See  William-  Clellan,   53  Miss.   507  (1876).     See 

eon  V.  Wilson,  1  Bland  Ch.(Md.)  420  Bostwick  v.    Isbell,   41   Conn.    305 

(1826);  Cupit  v.  Jackson,  13  Price  (1874).  It  is  said  in  Bostwick  v.  Isbell, 

721,  734  (1824).  that  the  powers  given  to  a  receiver 


758  NOTICE    OF    APPLICATION^    FOR    KECEIVEK.     [§  037. 

ex  parte  order  to  show  cause  may  be  obtained  ;  copies  of  the 
papers  intended  to  be  used  on  the  motion  and  of  the  order 
to  show  cause,  should  then  be  served  on  each  of  the  defen- 
dants.' Where  the  complaint  has  not  been  served,  and  it 
is  intended  to  base  the  motion  on  that  also,  a  copy  thereof 
should  be  served  with  the  notice  of  motion.* 

The  notice  of  motion  for  the  appointment  of  a  receiver 
must  be  served  like  any  other  notice  of  motion,'  by  deliver- 
\\'\<y  copies  thereof  to  all  the  necessary  and  interested 
parties/  The  notice  must  express  concisely,  but  clearly,  the 
object  of  the  application,  for,  as  a  general  rule,  the  court  will 
not  extend  the  order  beyond  the  scope  of  the  notice,* 

When  no  serious  injury  can  result  to  the  property  involved 
in  the  controversy  from  the  delay,  notice  of  motion  should 
always  be  given  to  adverse  parties  before  a  receiver  is 
appointed  ;"  yet  a  receiver  may  be  appointed  without  notice 
where  the  exigencies  of  the  case  require  it/  But  a  case  of 
great  urgency  must  be  shown  to  justify  an  appointment 
made  without  notice.* 

§  637.  Appointment  of  receiver  on  ex  parte  application. 
— It  is  the  settled  practice  of  the  supreme  court  of  New 
York,  as  it  was  of  the  late  court  of  chancery,  not  to  allow 
the  appointment  of  a  receiver  ex  parte,  except  in  those  cases 
where  the  defendant  is  without  the  jurisdiction  of  the 
court  or  can  not  be  found,  having  fraudulently  hidden  him- 
self for  the  purpose  of  avoiding  a  personal  service  of  the 
summons,'  or  where,  for  some  reason,  it  becomes  absolutely 


by  the  Connecticut  Act  of  1867,  are  '  Edw.  on  Rec.  77. 

so  great  that,  if  the  act  is  to  be  con-  *  State  v.  Jacksonville,  P.  &  M. 

strued  as  intending  to  authorize  the  R.  R.  Co.,  15  Fla.  201  (1875). 

appointment  without  notice,  it  should  '  Hardy  v.  McClellan,  53  Miss.  507 

be  held  to  be  void  and  contrary  to  (1876). 

the  principles  of  natural  justice,  *  State  v.  Jacksonville,  P.  &  M.  R. 

'  1  YauSant.  Eq.  Pr.  403.  R.  Co.,  15  Fla.  201  (1875). 

'^  1  YanSant.  Eq.  Pr.  403.  »  Sandford  v.  Sinclair,  8  Paige  Ch. 

*  2  Barb.  Ch.  Pr.  (2d  ed.)  310.  (N.  Y.)  373  (1840),  affg  3  Edw.  Ch. 

*  See  Baring  v.  Moore,  5  Paige  (N.  Y.)  393  ;  Gibson  v.  Martin,  8 
Ch.  (N.  Y.)  48,  521  (1835) ;  Buxton  Paige  Ch.  (N.  Y.)  481  (1840) ;  Ver- 
V.  Monkliouse,  Coop.  Ch.  41  (1810);  plank  v.  Mercantile  Ins.  Co.,  2  Paige 
2  Bavb.  Ch.  Pr.  (2ded.)  310.  Ch.  (N.  Y.)  438  (1831);   People  v. 


§  638.]   EX  PARTE  APPLICATION  FOE  RECEIVER.     759 

necessary  for  the  court  to  interfere  before  there  is  time  to 
give  notice  to  the  adverse  party,  in  order  to  prevent  the 
destruction  of,  or  a  serious  injury  to  the  property,*  in  which 
cases  a  receiver  may  be  appointed  ex  parted  Where  it  is 
proper  to  appoint  a  receiver  ex  parte,  the  particular  circum- 
stances which  render  such  a  summary  proceeding  necessary, 
should  be  distinctly  stated  in  the  affidavits  or  in  the  petition 
on  which  the  application  is  made.* 

§  638.  What  the  application  must  show.— To  authorize 
the  appointment  of  a  receiver,  the  complaint  or  affidavits 
must  show  a  cause  for  it  by  stating  the  facts  which  make 
such  appointment  necessary.*  In  the  complaint,  or  in  the 
petition  for  the  appointment  of  a  receiver  in  a  mortgage 
foreclosure,  the  plaintiff  must  show  that  the  premises  are  not 
of  sufficient  value  to  satisfy  his  debt  and  the  costs  of  the 
suit,  and  that  the  mortgagor,  or  other  party  who  is  person- 
ally liable  for  the  payment  of  the  mortgage  debt,  is  irrespon- 
sible and  unable  to  pay  an  expected  deficiency."*  If  danger  to 
the  property  is  not  alleged  in  the  complaint,  and  no  facts 
appear  in  the  affidavits,  showing  the  necessity  or  expediency 
of  appointing  a  receiver,  the  application  will  be  denied.* 
The  facts  essential  to  the  appointment  of  a  receiver  need  not 
be  pleaded  in  the  complaint,  but  may  be  shown  by  affidavits.' 

Norton    1  Paige  Ch.  (K  Y. )  17  Albany  &  S.  R.  R.  Co.,  38  Ho^.  (N. 

Q829)  '  Y.)  Pr.  228  (1869) ;  s.  c.  57  Barb. 

'People  V.  Albany  «&  S.  R.  R.  Co.,  (N.  Y.)  204  ;  1  Lans.  (N.  Y.)  308 ;  7 

38  How.  (N.  Y.)  Pr.  228  (1869);  B.  C.  Abb.  (N.  Y.)  Pr.  N.  S.  265. 

57Barb.  (N.Y.)  204;  1  Lans.  (KY.)  *  Tomlinson  v.   Ward,  2    Conn. 

308  ;  7  Abb.  (N.  Y.)  Pr.  N.  S.  265.  896  (1818). 

»  Gibson  v.  Martin,  8  Paige  Cb.  »  Sea  Ins.  Co.  v.  Stebbins,  8  Paige 

CN.  Y.)  481  (1840);    Sandford  v.  Cli.  (N.  Y.)  565  (1841). 

Sinclair,  8  Paige  Ch.  (N,  Y.)  873  •  Baker  v.  Backus,  32  HI.  79,  95 

(1840) ;  2  Barb.  Cb.  Pr.  (2ded.)311.  (1863) ;  Whitworth  v.  Wbyddon,  2 

Some  courts  hold  that  a  judge  in  Mac.  &  G.  55  (1850) ;   Wright  v. 

chambers,  upon  an  ex  parte  appli-  Vernon,  3  Drew  121  (1855);  Mickle- 

cation,  may  appoint  a  receiver.    See  thwait  v.  ]Micklethwait,  1  D.  &  J. 

Real  Estate  Associates  v.  San  Fran-  630  (1875) ;   Bowker  v.  Henry,  6  L. 

Cisco  Superior  Court,  60  Cal.   223  T.  N.  S.  43  (1862). 

(1382).  '  Commercial  Sav.  Bank  v.  Cor^ 

»  Verplank  v.  Mercantile  Ins.  Co.,  belt,  5  ISawy.  C.  C.  172  (18T8). 
2  Paige  Ch.  438  (1831);  People  v. 


760  WHAT    APrLICATlUN    .ML  ST    SHOW.  [§  038. 

A  receiver  will  not  be  appointed  on  a  mere  allegation  that 
the  mortgaged  premises  are  not  sufficient  security  for  all 
"just  incumbrances  thereon."  '  Neither  will  one  be  appointed 
on  a  general  allegation  that  loss  will  ensue  if  a  receiver  is 
not  appointed,  unless  a  full  statement  of  the  facts  is  made' 
A  mere  allegation  of  danger  to  the  property  will  not  of 
itself  be  sufficient,  if  the  court  is  satisfied  that  a  loss  is  not 
probable.* 

An  application  for  a  receiver  pending  an  action  for  fore- 
closure, must  show  an  actual  interest  in  the  property  and 
that  such  interest  is  in  danger  of  being  lost,  or  other  facts 
which  would  warrant  the  interference  of  the  court.*  An 
order  appointing  a  receiver  will  not  be  granted  where  the 
party  applying  for  it  does  not  establish  an  apparent  right 
to  the  property  in  litigation,  and  where  it  is  neither  alleged 
nor  shown  by  the  evidence  that  there  is  danger  of  waste  or 
injury  to  the  property,  or  loss  of  the  rents  and  profits  by 
reason  of  theMnsolvency  of  the  adverse  party  in  possession.* 
The  application  must  also  show  who  is  in  possession,  as  a 
receiver  can  not  be  appointed  unless  the  person  in  posses- 
sion of  the  mortgaged  premises  is  a  party  to  the  suit.*  A 
demand  in  the  complaint  for  the  appointment  of  a  receiver 
is  not  necessary.^ 

The  proceedings  should  be  in  such  a  state  as  to  enable 
the  judge  to  determine  who  is  to  receive  the  fund  which  the 
receiver  may  bring  into  court."  But  if  the  court  sees  that 
there  is  z.  prima  facie  case  upon  the  record  for  the  appoint- 
ment of  a  receiver,  the  fact  that  the  record  is  not  perfect  in 


»  Warner  v.  Gouverneur's  Ex'rs,  4  Abb.  (N.  Y.)  Pr.  235  (1857) ;  s.  c. 

1  Barb.  (N.  Y.)  36  (1847).    See  Shot-  13  ilow.  (N.  Y.)  Pr.  502  ;  Hamilton 

well  V.  Smith,  3  Edw.Ch.(N.Y.)  588  v.  Access.  Trans.  Co.,  3  Abb.  (N. 

(1842).  Y.)  Pr.  255  (1856) ;  s.   c.   13  How. 

» Hanna  v.  Hanna,  89  N.  C.  68  (N.  Y.)  Pr.  108. 

^^^)-  »Twitty  V.  Logan,  80  N.   G.  C9 

»  Whitworth  v.  Whyddon,  2  M.  «fc  (1879). 

G.  55  (1850).  6  gea  lag   Co.  v.  Stebblns,  8  Paige 

"  Goodyear  v.  Betts,  7  How.   (N.  Ch.  (N.  Y.)  565  (1841). 

Y.)  Pr.   187  (1852).     See  McCarthy  7  Commercial  Sav.   Bank  v.   Cor- 

V.   Peiike,  9  Abb.   (N.  Y.)  Pr.   164  bett,  5  Sawy.  C.  C.  172  (1878) 

(1859)  ;   8.  c.  18  How.   (N.  Y.)  Pr.  «  Gray  v.    Chaplin.   2  Russ.    147 

138;  Patten  v.  Access.  Trans.  Co.,  (1826). 


§§  639-640.]      OBJECTIONS  to  eeceivee.  761 

detail,  and  is  not  in  the  shape  it  should  be,  to  enable  the 
court  to  administer  complete  justice,  will  not  of  itself  defeat 
the  appointment,  especially  if  the  objection  is  merely  a  formal 
one  that  may  be  remedied  by  amendment.'  Where  the 
mortgage,  by  its  terms,  pledges  the  income,  rents  and  profits 
of  the  mortgaged  premises  to  the  payment  of  the  debt,  the 
mortgagee  need  not  conclusively  establish  a  right  to  recover 
before  he  is  entitled  to  ask  for  the  appointment  of  a  receiver. 
If  he  shows  a  probable  right  to  recover,  and  that  the  debtor 
is  insolvent,  the  appointment  of  a  receiver  will  follow  as  a 
matter  of  course.' 

§  639.  Objections  to  appointment  of  receiver. —  The 
objection  that  other  persons  are  necessary  parties  to  the 
suit  is  no  bar  to  the  appointment  of  a  receiver.  If  such  parties 
are  necessary,  they  can  be  brought  in  afterwards.*  Objec- 
tions because  of  the  misjoinder  of  parties  or  of  the  multi- 
fariousness of  causes  of  action,  are  no  answer  to  an  appli- 
cation for  a  receiver,  if  sufficient  grounds  for  the  appointment 
of  one  are  shown.* 

A  mortgagor  who  has  sold  and  conveyed  the  mortgaged 
premises  subject  to  his  mortgage,  is  not  in  a  position  to 
oppose  the  appointment  of  a  receiver.*  Where  the  parties 
stipulate  in  a  mortgage  that  a  receiver  may  be  appointed, 
an  answer  not  positively  sworn  to  will  not  constitute  a  suffi- 
cient objection  to  an  appointment.'  It  was  held  in  Thomp- 
son V.  Selby,'  that  where  the  original  bill  had  been  answered, 
the  pendency  of  a  plea  to  the  amended  bill  was  not  a  bar  to 
a  motion  for  the  appointment  of  a  receiver. 

§  640.    Appointment  of  receiver  by  referee  or  master. 

— The  selection  and  appointment,  or  proposal  for  appoint- 
ment, of  a  receiver  and  the  taking  of  security  from  him,  are 


>  Kerr  on  Rec.  11.  R.  1  Ch.  App.  325  (1866) ;  Major  v. 

•  DesMoines  Gas  Co.  v.  West,  44  Major,  8  Jur.  797  (1844). 

Iowa,  23  (1876).  *  The  Wall  Street  Fire  Ins.  Co.  v. 

»  Barclay  V.    Quicksilver   Mining  Loud,  20  How.  (N.Y.)  Pr.  95(1860). 

Co.,  9  Abb.  (N.  Y.)  Pr.  N.  S.  283  «  Knickerbocker  Life  Ins.  Co.  v. 

(1870).  HUl,  2  Hun  (N.  Y.)  680  (1874). 

*  Evans  v.  Coventry,  5  D.  M.  &  '  12  Sim.  100  (1841). 
G.  918  (1854);  Steele  v.  Cobhain,  L. 


7o2    APPOINTMENT  OF  RECEIVER  BY  REFEREE.  [§  G41. 

proper  matters  for  a  reference  under  the  New  York  Code  of 
Civil  Procedure,  as  they  were  under  the  fornner  practice  in 
chancery.'  In  general  practice  the  reference  is  usually  made 
to  a  person  residing  in  the  same  county  as  the  defendant, 
in  order  to  relieve  him  of  unnecessary  expenses  in  travelin?^  ;' 
but  in  mortgage  foreclosures,  the  referee  should  reside  in  the 
county  where  the  land,  or  a  portion  of  it,  is  situated,  and 
where  the  action  is  pending. 

Whether  the  receiver  is  appointed  directly  by  the  court, 
or  through  the  medium  of  a  referee,  it  is  the  duty  of  the 
court  to  follow  the  rules  and  practice  of  the  court  of  chan- 
cery in  like  cases,  so  far  as  they  are  consistent  with  the 
present  course  of  procedure  ;*  an  appointment  by  a  referee 
under  the  old  practice  will  be  valid.*  The  order  of  reference 
should  require  the  usual  notice  of  hearing  to  be  given  to 
the  adverse  parties.  If  no  notice  is  given,  and  the  opposing 
parties  voluntarily  appear  before  the  referee,  such  appearance 
will  be  a  waiver  of  all  irregularities,  and  no  objection  can  be 
taken  to  the  proceedings.' 

§  641.  Report  of  referee  or  master. — The  referee  or 
master  having  made  the  appointment,  or  selected  a  proper 
person  to  be  recommended  to  the  court  for  appointment  as 
receiver,  according  to  the  terms  of  the  order  of  reference, 
should  report  the  facts  to  the  court.'  The  report  of  the 
referee  or  master  on  the  appointment  of  a  receiver  can  not 
be  excepted  to  and  need  not  be  confirmed.^  The  appoint- 
ment of  a  receiver,  being  within  the  discretion  of  the  referee 
or  master,'  to  support  an  objection  thereto  and  to  induce  the 
court  to  interfere  with  his  appointment,  substantial  reasons 


>  Wetter  v.  Schlieper,  7  Abb.  (N.  •  2  Barb.  Ch.  Pr.  (2d  ed.)  317. 

Y.)  Pr.  92  (1854).  '  In  re  Eagle  Iron  "Works,  8  Paige 

2  Bank  of   Monroe   v.  Keeler,  9  Ch.  (N.  T.)  385  (1840) ;  Thomas  v. 

Paige  Ch.  (N.  Y.)  249  (1841).  Dawkin,  1  Ves.  Jr.  453  (1798)  ;  s.  c. 

8  2  Barb.  Ch.  Pr.  (2d  ed.)  311,  n  3  Bro.  C.  C.  507 ;  Wilkina  v.  Wil- 

19.  liams,  3  Ves.  588  (1798). 

*  "Wetter  v.  Schlieper,  7  Abb.  (N.  *  Thomas  v.  Dawkin,  1  Ves.  Jr. 

Y.)  Pr.  92  (1854).  452  (1792) ;  s.  c.  3  Bro.  C.  C.  507. 

'  "Wetter  v.  Schlieper,  7  Abb.  (N.  See  Benneson  v.  Bill,   62  111.   403 

Y.)  Pr.  92  (1854).  (1867). 


§  642.]    eeferee's  eepoet  ois"  receiver.      703 

for  such  objection  must  be  presented,*  for  the  court  will  not 
order  the  referee  to  review  his  decision  except  on  special 
grounds.* 

It  is  a  well  settled  rule  in  New  York,  that  a  court  will  not 
disturb  or  set  aside  the  appointment  of  a  receiver  by  a 
referee,  unless  the  person  selected  is  legally  disqualified,  or 
his  situation  is  such  as  to  induce  the  court  to  believe  that  he 
will  not  properly  attend  to  the  interests  of  the  parties.*  The 
court  will  not  disturb  the  referee's  or  master's  decision  merely 
because  an  interested  party  may  think  that  a  better  selection 
could  have  been  made  from  the  several  persons  proposed.* 
If,  however,  the  court  should  order  the  referee  or  master  to 
review  his  decision,  the  parties  may  proceed  de  novo  by  pro- 
posing other  persons  for  the  receivership.' 

§  642.  Order  of  appointment  on  report  of  referee 
recommending  proper  person. — Where,  upon  an  application 
to  the  court  for  the  appointment  of  a  receiver,  a  referee  or 
master  is  ordered  to  report  a  suitable  person  to  be  appointed 
and  to  approve  of  the  sureties  to  be  offered  by  him,  the 
appointment  will  not  be  complete  until  it  is  confirmed  by  a 
special  order  of  the  court.*  The  party  procuring  such  an 
order  of  reference  should  give  the  adverse  parties  the  usual 
notice  to  attend  before  the  referee.^  A  voluntary  appear- 
ance before  the  referee  will,  however,  waive  all  irregularities 
in  the  notice.* 


•  Thomas  v.  Dawkin,  1  Ves.  Jr.  parties  to  the  action  is  not  of  itself  a 
452  (1793) ;  s.  c.  3  Bro.  C.  C.  507  ;  sufficient  ground  for  the  removal  of 
Tharpe  v.  Tharpe,  12  Yea.  317  a  receiver ;  at  most,  it  is  but  a  cir- 
(1806).  cumstance  to  be  taken  into  consider- 

•  In  re  Eagle  Iron  Works,  8  Paige  ation  at  the  time  of  making  the 
Ch.  (N.  Y.)  385  (1840) ;  Wetter  v.  appointment.  Wetter  v.  Schlieper, 
Schlieper,  7  Abb.  (N.  Y.)  Pr.  92  7  Abb.  (N.  Y.)  Pr.  93,  93  (1854). 
(1854) ;  Wynne  v.  Newborough,  15  *  In  re  Eagle  Iron  Works,  8  Paige 
Ves.  283  ( 1808 ) ;  Bowersbank  v.  Ch.  (N.  Y.)  385  (1840). 
CoUasseau,  3  Ves.  164  (1796);  » Smith  on  Rec.  11;  2  Barb.  Ch. 
Thomas  v.  Dawkin,  1  Ves.  Jr.  452  Pr.  (2d  ed.)  318. 

(1790) ;    8.   c.   3  Bro.    C.   C.    507  ;  *Inre  Eagle  Iron  Works,  8  Paige 

Tharpe  v.  Tharpe,  12  Ves.  317  (1806).  Ch.  (N.  Y.)  385  (1840). 

» In  re  Eagle  Iron  Works,  8  Paige  '  Wetter  v.  Schlieper,  7  Abb.  (N. 

Ch.  (K  Y.)  385  (1840).  Y.)  Pr.  92  (1854). 

Mere  relationship  to  one  of  the  *  Welter  v.  Schlieper,  7  Abb.  (N. 


764  OEDER  OF  REFEREE  APPOINTING  RECEIVER.   [§  G4o. 


If  the  party  summoned  fails  to  appear,  the  referee  may 
proceed  ex  parte,  and  the  proceedings  will  not  be  open  to 
review,  unless  proper  cause  is  shown  and  the  costs  of  the 
proceedings  are  paid.' 

§  643.  Order  of  appointment  by  referee.— Where  the 
order  appointing  a  referee  empowers  him  to  appoint  a 
receiver  and  to  approve  the  requisite  bond  for  him,  tiic 
amount  of  which  he  has  authority  to  fix,  an  order  for  the  cf)n- 
firmation  of  the  report  will  not  be  necessary.*  In  such  cases 
the  referee,  after  appointing  the  receiver  and  approving  the 
sureties  to  be  given  by  him,  should  file  the  required  bonil,* 
together  with  his  report  of  the  appointment,  with  the  clerk 
of  the  court,  stating  in  his  report  that  he  has  approved  and 
filed  such  bond."  Upon  the  filing  of  such  report,  the 
appointment  of  the  receiver  will  be  complete,  and  he  may 
immediately  enter  upon  his  duties.* 

A  receiver  takes  title  to  the  property  from  the  time  of  his 
appointment.*  As  between  the  parties  to  the  suit,  he  is  to 
be  considered  appointed  from  the  date  of  the  order  of  refer- 
ence.^ Either  party  may  have  the  appointment  of  a  receiver 
by  a  referee  reviewed  on  presenting  a  petition  to  the  court, 
on  notice  to  all  the  parties  interested,'  setting   forth   the 


Y.)  Pr.  92  (1854).  See  Brasher  v.  Van 
Courtlandt,  2  Johns.  Ch.  (N.Y.)  242 
(1816);  Nichols  v.  Nichols,  10  Wend. 
500(1833);  Parker  v.  Williams,  4 
Paige  Ch.  (N.  Y.)  439  (1834) ;  Hart 
V.  Small.  4  Paige  Ch.  (N.  Y.)  288 
(1834) ;  Robinson  v.  Nash,  1  Anst. 
76  (1792). 

'  Edw.  on  Rec.  70 ;  1  VanSant. 
Eq.  Pr.  408. 

^  In  re  Eagle  Iron  Works,  8  Paige 
Ch.  (N.  Y.)  385  (1840) ;  Bowersbank 
V.  Collasseau,  3  Ves.  164  (1796) ;  1 
VanSant.  Eq.  Pr.  407 ;  2  Wait.  Pr. 
235. 

3  1  VanSant.  Eq.  Pr.  407. 

«  2  Wait.  Pr.  235. 

*  In  re  Eagle  Iron  Works,  8  Paige 
Ch.  (N.  Y.)  385  (1840^ ;  Wetter  v. 


Schlieper,  7  Abb.  (N.  Y.)  Pr.  93 
(1854)  ;  Lottimer  v.  Lord,  4  E.  D. 
Smith  (N.  Y.)  183,  191  (1855);  2 
Wait.  Pr.  235. 

«  Wilson  V.  Allen,  6  Barb.  (N.  Y.) 
543  (1849) ;  Lottimer  v.  Lord,  4  E. 
D.  Smith  (N.  Y.)  183.  191  (1855); 
Rutter  V.  Tallis,  5  Sandf.  (N.  Y.) 
610  (1852). 

^  Fairfield  v.  Weaton,  2  Sim.  &  S. 
98  (1824). 

*  Objection  to  the  referee's  or 
master's  report  can  not  be  made  by 
exceptions.  Tyler  v.  Simmons,  6 
Paige  Ch.  (N.Y.)  127(1836);  Thomas 
V.  Dawkin,  1  Ves.  Jr.  452  (1792);  s.  c. 
3  Bro.  C.  C.  507  ;  Wilking  v.  Wil- 
liams, 3  Ves.  588  (1798> 


§  G44.]     APrOINT.MENT  BY  COUET APPEALS.       765 

grounds  of  objection  and  praying  that  the  referee  be  directed 
to  review  his  report.'  The  appHcation  to  review  the  appoint- 
ment of  a  referee  may  also  be  made  by  motion  supported  by 
affidavits. 

The  appointment  of  a  receiver  being  within  the  discretion 
of  the  referee  or  master,'  there  must  be  a  well-founded 
objection  to  support  an  exception  thereto,'  for  the  court  will 
not  order  the  referee  to  review  his  decision  except  for  special 
reasons,*  and  the  court  will  not  interfere  with  the  appoint- 
ment of  a  receiver  by  a  referee  unless  a  case  is  presented 
showing  that  the  person  appointed  is  disqualified,'  or  that 
his  position  is  such  as  to  induce  a  belief  that  he  will  not 
properly  attend  to  the  interests  of  the  parties.' 

§  644.  Order  of  appointment  by  court  —  Appeals.  — 
When  the  appointment  of  a  receiver  is  made  by  the  court, 
the  penalty  of  the  bond  should  be  fixed  and  the  general  terms 
of  the  order  prescribed  at  the  time  it  is  granted.^  The  form 
and  contents  of  the  order  appointing  a  receiver  must  be  deter- 
mined by  the  court.'  The  judge  may  himself  draw  the  order, 
prescribing  all  of  its  details,  or  he  may  allow  the  form  of  order 
submitted  by  the  moving  party.*  When  the  order  contains 
special  provisions,  it  is  customary  for  the  attorney  of  the 


>  Jti  r«  Eagle  Iron  Works,  8  Paige  Works,   8  Paige  Ch.   (N.   Y.)  385 

Ch.  (N.  Y.)  385  (1840).  (1840)  ;  Wynne  v.  Newborough,  15 

»  Thomas  v,  Dawkin,  1  Ves.  Jr.  Ves.  283,  (1808). 

452  (1792) ;  s.  c.  3  Bro.  C.  C.  507.  *  Wetter  v.  Schlieper,  7  Abb.  (N. 

See  Benneson  v.  Bill,   62   111.   408  Y.)  Pr.  92  (1854) ;  In  re  Eagle  Iron 

(1872).  Works,  8   Paige   Ch.   (N.  Y.)  385 

» Thomas  v.  Dawkin,  1  Ves.  Jr.  (1840) ;  Wynne  v.  Newborough,  15 

452  (1792) ;  s.  c.  3  Bro.  C.  C.  507 ;  Ves.  283  (1808) ;    1  Barb.  Ch.  Pr. 

Tharpe    v.    Tharpe,    12   Ves.    317  674. 

(1806).  '  2  Wait.  Pr.  230. 

*  Wetter  v.  Schlieper,  7  Abb.  (N.  »  It  is  said  to  be  the  duty  of  the 

Y.)  Pr.  92  (1854) ;  In  re  Eagle  Iron  attorney,  and  not  of  the  judge,  to 

Works,   8  Paige  Ch.    (N.   Y.)   385  see  that  the  order  is  proper.  LaFarge 

(1840) ;  Wynne  v.  Newborough,  15  v.  VanWagenen,  14  How.  (N.  Y.) 

Ves.  283  (1808) ;  Tharpe  v.  Tharpe,  Pr.  54,  57  (1857).     An  order  deny- 

12  Ves.  317  (1806) ;    Bowersbank  v.  ing  the  appointment  of  a  receiver  in  a 

Colasseau,  3  Ves.  164  (1796);  Thomas  foreclosure  is  not  final.     Beecher  v. 

V.  Dawkin,  1   Ves.  Jr.  452  (1792).  Marquette  &Pac.  Rolling  Mill  Co.,40 

6  Wetter  v.  Schlieper,  7  Abb.  (N.  Mich.  307  (1879). 

Y.)  Pr,  92  (1854) ;  In  re  Eagle  Iron  '  1  VanSant.  Eq.  Pr.  406 


766 


APPOINTMENT   BY    COURT APPEALS. 


[§  644. 


moving  party  to  submit  a  copy  of  the  proposed  order  to 
the  attorney  for  the  adverse  party,  and  if  any  of  its  pro- 
visions are  objectionable,  to  make  an  application  to  the 
judge  in  court  or  at  chambers  for  a  settlement  of  the  terms 
of  the  order.'  The  attorney  opposing  the  order  may  propose 
amendments  to  be  submitted  to  the  judge  with  the  original 
form  for  settlement,'  when  the  parties  can  not  otherwise 
agree.' 

The  order,*  as  settled,  should  then  be  entered  by  the 
moving  party,*  who  is  entitled  to  file  it  with  the  clerk 
of  the  court  ;*  copies  of  the  order  should  then  be  served 
on  all  the  parties  interested,^  because  such  parties  may  have 
a  right  to  appeal,  and  the  duration  of  such  right  will  be  limited 
only  from  the  time  of  the  service  of  a  copy  of  the  order  with 
a  notice  of  the  entry  thereof.'  If  the  defendant  has  appeared, 
the  service  should  be  made  upon  him  personally,  unless 
his  appearance  was  by  an  attorney,  when  the  service  may  be 
made    upon    such    attorney.*      It   was   held    in    Farley   v. 


>  If  the  terms  of  the  order  are 
settled  out  of  court,  and  the  order  is 
allowed  by  the  judge's  indorsing  his 
allocatur  upon  it,  it  must  then  be 
filed  and  entered.  1  VanSant.  Eq. 
Pr.  406. 

*  Not  to  the  clerk  as  formerly. 
Whitney  v.  Belden,  4  Paige  Ch.  (N. 
Y.)  140  (1833) ;  1  VanSant.  Eq.  Pr. 
406. 

3  1  VanSant.  Eq.  Pr.  406  ;  2  Wait. 
Pr.  280,  §  5. 

*  Orders  granted  by  a  justice  ex 
parte  in  chambers,  imder  the  New 
York  Code,  need  not  be  entered  with 
the  clerk.  Savage  v.  Relyea,  3  How. 
(N.  Y.)  Pr.  276  (1848) ;  s.  c.  1  Code 
(N.  Y.)  Rep.  42. 

*  The  order  must  be  entered  by  the 
prevailing  party  with  the  clerk  of 
the  court  where  the  papers  are  filed. 
Savage  v.  Relyea,  3  How.  (N.  Y.)  Pr. 
276(1848);  b.  c.  1  N.Y.  Code  Rep.  43. 
Should  the  successful  party  fail  to 
enter  the  order  within  twenty-four 


hours  after  it  is  granted,  the 
unsuccessful  party  may  enter  it ; 
or  any  party  affected  by  such  order, 
is  entitled  to  do  so  under  the  New 
York  Code.  Neither  party  can  have 
any  benefit  from  a  decision  of  the 
court,  until  the  order  on  such  deci  siou 
is  drawn  and  entered.  Whitney  v. 
Belden,  4  Paige  Ch.  (N.  Y.)  140 
(1833);  Peet  v.  Cowenhoven,  14  Abb. 
(N.  Y.)  Pr.  56  (1861). 

«  Edw.  on  Rec.  66. 

'  Whitney  v.  Belden,  4  Paige  Ch. 
(N.  Y.)  140  (1833). 

«  Rankin  v.  Pine,  4  Abb.  (N.  Y.) 
Pr.  309  (1857) ;  People  ex  rel.  Backus 
V.  Spalding,  9  Paige  Ch.  607  (1842) ; 
Farley  v.  Farley,  7  Paige  (;h.  (N. 
Y.)  40  (1837) ;  Tyler  v.  Simmons,  6 
Paige  Ch.  (N.  Y.)  127  (1836) ;  Jen- 
kins v.  Wilde,  14  Wend.  (N.  Y.)  539 
(1835). 

•  N.  Y.  Code  Civ.  Proc.  §  717. 


§  645.]  CONTENTS    OF   ORDER   APPOINTING.  767 

Farley,*  that  the  moving  party  is  not  entitled  to  notice  from 
the  adverse  party  of  the  entering  of  such  order,  in  order  to 
limit  his  right  of  appeal  therefrom  ;  but  it  was  decided  in  the 
more  recent  case  of  Rankin  v.  Pine,'  that  the  service  of  a 
written  notice  is  necessary,  even  when  the  appeal  is  taken 
from  a  judgment  entered  by  the  appellant  himself. 

An  appeal  must  be  taken  within  thirty  days  after  the 
written  notice  of  the  entry  of  the  order  has  been  given  to 
the  party  appealing.*  The  order  will  be  considered  as 
entered  from  the  time  of  its  delivery  to  the  clerk  for  that 
purpose.*  A  notice  of  the  entry  of  the  order  will  not  avail  to 
limit  the  time  of  appeal,  unless  it  is  in  writing,*  and  is  such 
as  to  apprise  the  adverse  party  fully  of  the  whole  substance, 
if  not  of  the  very  details  of  the  order.* 

§  645.  Contents  of  order  appointing  receiver— Powers 
defined — Property  described. — Where  the  application  for 
a  receiver  has  been  made  and  allowed,  care  should  be  taken 
in  drawing  the  order  for  his  appointment  that  it  fully 
defines  his  powers.*  It  should  state  distinctly  on  the 
face  of  it,  over  what  property  he  is  appointed,*  or  refer  to 
the  pleadings  or  some  paper  in  the  proceedings  which 
describes  the  property,  so  that  a  party  may  know  what  the 
officer  of  the  court  is  in  possession  of  ;*  otherwise,  he  can 
not  hold  possession  of  the  property." 

It  sometimes  happens  that  the  court,  although  of  the 
opinion  that  the  moving  party  is  entitled  to  a  receiver,  will 


>  7  Paige  Ch.  (N.  T.)  40  (1837).  gregational  Church,  42  Barb.  (N.T.) 

«  4  Abb.  (N.  Y.)  Pr.  309  (1857).  441  (1864). 

»  N.  Y.  Code  Civ.  Proc,  §  1351.  '  Edw.  on  Rec.  66. 

♦Farley  v.  Farley,  7  Paige  Ch.  » Crow  v.  Wood,  13  Beav.  271 

(N.  Y.)  40,  42  (1837).  (1850) ;  High  on  Rec.  (2d  ed.)  76, 

*  People  ex  rd.  Backus  v.  Spalding,  §  87. 

9  Paige  Ch.  (N.  Y.)  607  (1842) ;  Fry  »  O'Mahoney  v.  Belmont,  62  N.' 

V.  Bennett,  7  Abb.  (N.  Y.)  Pr.  352  Y.  133  (1875) ;  Crow  v.  Wood,  13 

(1858) ;   s.  0.  16  How.  (N.  Y.)  Pr.  Beav.  271  (1850);  2  Barb.  Ch.  Pr.  (N. 

402,  406  ;  2  Bosw.  (N.  Y.)  684.  Y.)  312  ;  1  VanSant.  Eq.  Pr.  405  : 

•  Fry  V.  Bennett,  7  Abb.  (N.  Y.)  High  on  Rec.  (2d  ed.)  76,  §  87. 

Pr.  352  (1858) ;  s.  c.  16  How.  (N.  "  O'Mahoney  .v.  Belmont,  62  N. 

Y.)  Pr.  402,  406 ;  2  Bosw.  (N.  Y.)  Y.  133  (1875). 
684 ;  Champion  v.  Plymouth  Con- 


768  CONTENTS    OF    ORDER   APPOINTING.  [§646. 

not  make  such  an  appointment  directly,  but  in  the  alternative, 
requiring  that  the  demand  of  the  moving  party  be  satisfied, 
or  that  a  receiver  be  appointed.*  The  order  for  a  receiver 
usually  directs  him  to  state  his  accounts  from  time  to  time, 
and  to  pay  the  balance  found  due  from  him  into  court  to 
the  credit  of  the  action,  to  be  there  invested  and  accumu- 
lated, or  otherwise  disposed  of,  as  the  court  may  think 
proper.' 

If  a  receiver  is  appointed  on  behalf  of  several  incum- 
brancers, the  order  generally  contains  a  recital  that  the 
appointment  is  to  be  without  prejudice  to  the  rights  of 
the  prior  incumbrancers  of  the  estate,  who  may  think  proper 
to  take  possession  of  the  premises  by  virtue  of  their  respec- 
tive claims.  The  order  usually  directs  that  the  receiver, 
out  of  the  rents  and  profits  to  be  collected  by  him,  shall  keep 
down  the  interest  on  such  incumbrances,  according  to  their 
priorities,  and  be  allowed  the  same  in  passing  his  accounts.' 
If  the  mortgagor  is  in  possession  of  the  premises,  the  order 
should  direct  him  to  deliver  the  possession  thereof  to  the 
receiver.* 

§  646.  Proposal  of  names  for  receiver. — The  referee 
or  master  upon  a  reference  to  appoint  a  receiver  should 
designate  that  person  whom  he  deems,  all  things  considered, 
best  qualified  for  the  ofifice,  without  regard  to  the  fact  that 
he  was  proposed  by  one  or  the  other  of  the  parties;*  under 
equal  circumstances,  the  party  obtaining  the  order  for  a 
receiver  has,  prima  facte,  a  right  to  nominate  the  receiver.* 


•  Curling  v.  Townsend,  19  Ves.  *  Lespinasse  v.  Bell,  2  Jac.  &  W. 
628  (1816) ;  High  on  Rec.  (2d  ed.)  436  (1821).  The  appointment  of  a 
82,  §  102.  receiver  is  usually  a  matter  of  dis- 

'  2  Dan.  Ch.  Pr.  1573.  cretion,  but  tliere  are  persons  who 

»  Smith  V.  Effingham,  2  Beav.  232  are  not  competent  to  act  owing  to 

(1839) ;  Lewis  v.  Zouche,  2  Sim.  388  their  peculiar  relation  to  the  parties 

(182^)-  Benneson  v.  Bill,  62  111.  408  (1872). 

*  Griffith  V.  Thapwel,  2  Ves.  Sr.  See  Thomas  v.  Dawkin,  1  Ves.  Jr. 
401  (1751) ;  Everett  v.  Belding,  22  452  (1702)  ;  s.  c.  3  Bro.  C.  C.  508. 
L.  J.  Ch.  75  (1852)  As  to  the  form  e  q^^q,  q^  Rec.  8;  2Barh.  Ch.  Pr. 
of  the  order,  see  Davis  v.  Duke  of  (od  ed.)  316  ;  1  VanSant.  Eq.  Pr. 
Marlborough,    2    Swans.    113,    116  4Q7 

(1818) ;    Baylies  v.  Baylies,  1  Coll. 
548  (1844). 


§  647.]  PiiOPOSLNG    NAJVIES   FOE    RECEIVER.  769 

In  proceedings  upon  a  reference  for  the  appointment  of  a 
receiver,  the  party  who  has  obtained  the  order  should  pre- 
sent to  the  referee  a  written  proposal  containing  the  names 
of  the  desired  receiver  and  his  sureties.  If  the  person  thus 
nominated  is  objectionable,  however,  another  person  may 
be  nominated  by  any  interested  party  by  a  counter-proposal.' 

§  647.     Ineligibility    to    be    appointed    a    receiver. — 

Although  as  a  general  rule  the  court  will  appoint  as  receiver 
a  disinterested  person  and  not  a  party  to  the  foreclosure, 
yet  a  party  to  the  action  is  not  absolutely  disqualified  from 
acting  as  receiver.  Indeed,  there  are  cases  in  which  a  party 
to  the  suit,  if  otherwise  unobjectionable,  should  be  appointed 
in  preference  to  any  one  else,*  A  non-resident  should  not 
be  appointed  a  receiver.*  A  master  in  chancery,  whose  duty 
it  is  to  pass  upon  the  accounts  and  to  control  the  conduct 
of  a  receiver,  is  also  disqualified  from  acting.* 

The  New  York  Code  of  Civil  Procedure'  prohibits  the 
appointment  in  New  York  and  Kings  counties  of  any  person 
who  holds  the  office  of  clerk,  deputy  clerk,  special  deputy 
clerk  or  assistant  in  the  clerk's  office,  of  a  court  of  record  or 
of  the  surrogate's  court.  And  it  has  been  held  that  usually 
a  party  to  the  suit  is  not  competent  to  act  as  receiver,  unless 
by  the  consent  of  all  parties.'     In  Kansas'  and  Ohio'  no 


■  A  person  not  having  an  interest  ^  Hubbard  v.  Guild,  1  Duer.  (N. 

in  the  action  can  not  propose  a  re-  Y.)  682  (1853)  ;  1  VanSaut.  Eq.  Pr. 

ceiver,  and  it  is  contrary  to  the  order-  400.     But  see  Benneson  v.  Bill,  62 

]y  proceedings  of  a  court  of  justice  to  111.  408  (1872). 

allow  a  stranger  to  participate  in  ^  See  Meier  v.   Kansas  Pac.   Ry. 

the  nominations  for  such  an  appoint-  Co.,  5  Dill.  C.  C.  476  (iSlS);  s.  c.  G 

nient.     O'Mahoney  v.  Belmont,  62  Rep.  642. 

N.Y.  133(1875);  Attorney-General  V.  "Benneson    v.    Bill,   62    111.   408 

Day,  2  Madd.  246  (1817) ;  Edw.  on  (1872)  ;  Kilgore  v.  Hair,  19  S.  C.  (N. 

Rec.  22;    2  Barb.  Ch.  Pr.  (2d  ed.)  S.)  486  (1883)  ;  Ex  parte  Fletcher,  6 

316.     Where  the  matter  is  referred  Ves.  427  (1801). 

to  a  referee  with  power  to  appoint  *  N.  Y.  Code  Civ.  Proc.  g  90. 

a  receiver,  the  appointment  will  be  ®  Benneson    v.  Bill,   62    111.    408 

entirely  within  his  discretion,  and  he  (1872).     But  see  Hubbard  v.  Guild, 

need  not  give  any  reasons  for  his  1  Duer  (N.  Y.)  663  (1853). 

selection.     Benneson  v.  Bill,  62  111.  '  Kansas  Code,  ^  263. 

408  (1872);  Thomas  v.  Dawkiu,  1  Ves.  «  2  Ohio  Rev.  Stat.,  §  5588. 
Jr.  452  (1792) ;  s.  c.  3  Bro.  C.  C.  508. 

(49) 


770  rNELIGIBILITY   FOR    KECEIVEE.  [§  648. 

party,  or  attorney,  or  person  interested  in  an  action  can  be 
appointed  a  receiver  therein ;  and  in  Kentucky'  there  is  the 
same  prohibition  with  an  exception  in  favor  of  executors, 
administrators,  curators,  guardians  and  committees  of  per- 
sons of  unsound  mind.  Generally,  a  trustee  to  let  and 
manage  an  estate  should  not  be  appointed  a  receiver  of  the 
same,  whether  he  is  sole  trustee  or  acts  jointly  with  others  ;* 
he  should  be  appointed  only  when  he  will  act  without  com- 
pensation. Neither  is  the  next  of  kin  of  an  infant  complain- 
ant a  proper  party  to  be  appointed  a  receiver  ;*  nor  one  who 
is  a  stranger  to  the  court,  if  objected  to  by  either  party  ;* 
nor  any  person  who,  by  his  own  act  or  position,  stands  in  an 
interested  relation  to  the  cause.  The  law  partner  of  the 
solicitor  for  the  plaintiff  in  a  foreclosure,  can  not,  even  by 
consent,  be  appointed  receiver.* 

§  648.  From  what  time  a  receiver  considered  as 
appointed. — An  order  for  a  receiver  vests  the  possession  in 
him  from  the  date  of  his  appointment,*  without  reference  to 
the  time  of  his  giving  bonds.'^  And  upon  the  appointment 
of  a  receiver,  the  title  to  the  property,  of  which  he  is 
made  receiver,  vests  in  him  in  trust,  though  further 
proceedings  may  be  necessary  to  acquire  the  actual 
possession  of  it.*  But  a  court  can  not  take  property 
out  of  the  hands  of  a  creditor  until  his  claim  is  satisfied.* 


»  Ky.  Civil  Code,  §  330.  Ch.  (N.   Y.)  592  (1846).      See  Por- 

«  Sutton   V.   Jones,   15   Ves.  584  ter  v.  Williams,  9  N.  Y.  142  (1853) ; 

(1809) ;  Sykes  v,  Hastings,  11  Ves.  B.  c.  59   Am.  Dec.  519  ;   sub  nam. 

363  (1805) ;  3  Barb.  Ch.  (N.  Y.)  Pr.  Porter  v.  Clark,  12  How.  (N.  Y.)  Pr. 

(2d.  ed.)  305.  107;    West   v.    Eraser,    5    Sandf. 

« Stone  V.   Wishart,  2  Madd.  64  (N.   Y.)  653  (1852) ;    Albany   City 

(1817).  Bank  v.  Schermerhorn,  Clarke  Ch. 

*  Smith  V.  New  York  Consolidated  (N.  Y.)  297,  300  (1840);  VanWyek  v. 
Stage  Co.,  28  How.  (N.  Y.)  Pr.  208  Bradley,  3  N.  Y.  Code  Rep.  157 
(1865);  8.  c.  18  Abb.  (N.  Y.)  Pr.  (1851). 

419.  1  Maynard  v.  Bond,  67  Mo.  315 

"Merchants'  and   Manufacturers'  (1878). 

Bank   v.   Kent,  Circuit  Judge,  43  »  Olney  v.  Tanner,  19  Bankr.  Reg. 

Mich.  292  (1880).  178  (1880). 

•  Wilson  V.  Allen,  6  Barb.  (N.  Y.)  •  Benedict  v.  Maynard,  5  McL.  C. 
542  (1849);  Wilson  v. Wilson,  1  Barb.  C.  262  (1851). 


§  649.] 


BOND    OF    RECEIVER. 


When  an  order  of  reference  is  made  for  the  appointment 
of  a  receiver,  his  title  vests  in  and  attaches  to  the  property 
by  relation,  from  the  date  of  the  order  of  reference,  with  the 
same  effect  as  if  the  order  had  named  the  receiver.'  Such 
an  order  is  per  se  a  sequestration  of  the  property  and  gives 
all  the  necessary  means  for  enforcing  the  receiver's  rights.* 

Where  the  court  directs  a  reference  to  select  a  proper 
person  to  be  appointed  receiver,  the  appointment  will  not 
be  complete  until  it  is  confirmed  by  a  special  order  of  the 
court ;'  but  where  the  referee  or  master  is  directed  to  appoint 
a  receiver  and  to  take  the  requisite  security  from  him,  an 
order  confirming  the  appointment  will  not  be  necessary.* 

§649.  Bond  of  receiver. — Except  in  those  cases  where 
the  sheriff  of  the  county  is  appointed  to  act  as  receiver  in 
a  mortgage  foreclosure,  the  receiver  should  be  required  to 
give  proper  bonds  for  the  faithful  performance  of  his  duties.* 
The  bond  must  be  properly  executed,  approved"  and  filed 


1  Rutter  V.  Tallis,  5  Sandf.  (N.  T.) 
610  (1852).  See  Deming  v.  New  York 
Marble  Co.,  12  Abb.  (N.  Y.)  Pr.  66 
(1860) ;  In  re  North  American  Gutta 
Percha  Co.,  17  How.  (N.  Y.)Pr.  549 
(1859) ;  s.  c.  9  Abb.  (N.  Y.)  Pr.  79  ; 
Lottimer  v.  Lord,  4  E.  D.  Smith 
(N.  Y.)  183  (1855). 

«  See  Porter  v.  Williams,  9  N.  Y. 
142  (1853). 

*  In  re  Eagle  Iron  Works,  8  Paige 
Ch.  (N.  Y.)  385  (1840). 

*  2  Barb.  Ch.  Pr.  (3d  ed.)  317. 

*  Grantham  v.  Lucas,  15  W.  Va.  425, 
432  (1879).  See  Willis  v.  Corlies,  2 
Edw.Ch.(N.Y.)281  (1834);  Verplank 
V.  Caines,  1  Johns.  Ch.  (N.  Y.)  57 
(1814)  ;  Sea  Ins.  Co.  v.  Stebbins,  8 
Paige  Ch.  (N.Y.) 565  (1841);  Quincy 
V.  Cheeseman,  4  Sandf.  Ch.  (N.  Y.) 
405  (1846);  Smith  v.  Butcher,  28 
Gratt.  (Va.)  144  (1875).  By  the  pro- 
visions of  the  Kentucky  Civil  Code, 
§  331,  and  the  Ohio  Rev.  St.  g  5589, 
u  receiver,  before  entering  upon  tho 


discliarge  of  his  duties,  must  be 
sworn  to  perform  them  faithfully, 
and,  with  one  or  more  sureties  to  be 
approved  by  the  court,  execute  a 
bond  to  sucli  person,  and  in  such 
sum  as  the  court  shall  direct,  condi- 
tioned that  he  will  faithfully  dis- 
charge the  duties  of  receiver  in  the 
action  and  obey  the  orders  of  the 
court  therein. 

«The  Maryland  Statute,  2  Md. 
Code  Pub.  L.  28,  29,  requiring  the 
bond  of  a  receiver  to  be  approved  by 
the  court,  but  not  making  such  ap- 
proval a  condition  precedent,  is  di- 
rectory only  ;  an  approval  nunc  pro 
tunc  will  be  valid.  Gephart  v.  Star- 
rett,  47  Md.  396  (1877).  A  court  com- 
missioner has  no  jurisdiction  to  ap- 
point a  receiver,  and  a  bond  given 
by  a  receiver  so  appointed  and  ap- 
proved by  such  commissioner,  is 
void.  Quiggle  v.  Trumbo,  56  Cal. 
626  (1880)." 


772  EFFECT    OF    APPOINTING    RECEIVER.  [§  650. 

with  the  clerk  of  the  court  which  appointed  the  receiver.' 
After  executing  and  filing  his  bond  he  may  immediately 
enter  upon  the  discharge  of  his  duties.' 

The  sureties  of  the  receiver  must  reside  within  the  juris- 
diction of  the  court,'  and  be  real  and  substantial  persons 
capable  of  contracting.*  If  the  sureties  proposed  are  not 
satisfactory  to  the  court,  the  receiver  can  present  the  names 
of  other  sureties  in  an  amended  proposal,  stating  them  to  be 
in  place  of  those  formerly  proposed.*  Should  the  court  at 
any  time  regard  the  sureties  of  a  receiver  as  insufficient,  it 
may  require  him  to  show  cause  why  he  should  not  give 
additional  sureties  upon  his  bond ;  upon  his  failure  to  show 
cause,  he  may  be  removed.  And  it  must  plainly  appear 
that  the  court  erred  in  so  removing  a  receiver  before  an 
appellate  court  will  reverse  its  action.* 

§  650.  Effect  of  appointment  of  receiver. — The  appoint- 
ment of  a  receiver  determines  no  rights.*  A  court  will 
not,  on  a  motion  to  appoint  a  receiver,  prejudge  the  case,* 
or  give  any  intimation  what  its  decision  will  be  at  the 
trial.'  While  the  appointment  of  a  receiver  operates,  to 
a  certain  extent,  as  an  injunction,"  yet  the  effect  of  the 
appointment  of  a  receiver  is  very  different  from  that  of 
granting  an  injunction." 

The  effect  of  the  appointment  of  a  receiver  is  to  remove 
the  property  from  the  possession  of  the  person  occupying  or 
holding  it."     Where  a  receiver  has  been  appointed  and  an 


'  Where  a  bond  given  by  a  receiver  »  2  Barb.   Ch.   Pr.   (2d  ed.)  316  ; 

upon  his  appointment  is  not  filed  Edw.  on  Rec.  74. 

•with  the  proper  oflScer,  the  court  •  Shackelford  v.  Shackelford,  32 

may  direct  it  to  be  filed  nunc  pro  Gratt.  (Va.)  481  (1879). 

tunc.     Whiteside  v.  Prendergast,  2  "^  In  re  Colvin,  3  Md.  Ch.   Dec. 

Barb.  Ch.  (N.Y.)  471  (1847);  Carper  278,302(1851):    Chase's    Case,   1 

V.  Hawkins,  8  W.  Va.  29  (1875).  Bland  Ch.    (Md.)    206,  213  (1826)  ; 

*  See  In  re  Eagle  Iron  Works,  8  Beverley  v.  Brooke,  4  Qratt.  (Va.) 
Paige  Ch.  (N.  Y.)  885  (1840).  187,  208  (1847). 

=  Cockburn  v.  Raphall,  2  Sim.  &  »  Hugonin  v.  Basley,  13  Ves.  107 

S.  453  (1825).  (1806). 

*  Smith  V.  Scandrett,  1  W.  Bl.  444  »  Tripp  v.  Chard  Ry.  Co.,  11  Hare, 
(1778) ;    Breadmore    v.    Phillips,   4  264  (1853). 

Waule.  &  Sel.  173  (1815).  '"  Evans  v.  Coventry,  3  Drew.  83 


§  651.]  JURISDICTION    OF   EECEIVER.  773 

order  is  made  for  the  delivery  of  the  property  to  him,  a 
demand  therefor  must  be  made  by  the  receiver  personally, 
for  the  party  in  possession  is  not  bound  to  deliver  the  prop- 
erty to  any  one  except  the  receiver.  The  plaintiff's  attorney 
can  not  act,  in  this  respect,  for  the  receiver  or  as  his 
attorney.' 

The  appointment  of  a  receiver  has  no  retroactive  effect  to 
divest  the  accrued  rights  of  third  persons.'  The  rights  of 
a  receiver  extend  only  to  the  possession  of  the  land,  to  col- 
lecting the  rents  and  profits,  to  making  leases  and  to  exer- 
cising other  acts  of  control  over  the  property,  the  legal  title 
remaining  in  every  respect  as  it  was  prior  to  the  appointment 
of  such  receiver.*  A  receiver  can  not  be  placed  in  possession 
of  demised  premises  on  the  application  of  a  party  who  not 
only  is  not  entitled  to  the  possession  thereof,  but  who  has  no 
interest  whatever  in  the  property  in  question.* 

§  651.  Jurisdiction  of  receiver. — A  receiver  has  no  rights 
or  powers  except  such  as  are  conferred  upon  him  by  the 
order  appointing  him  and  by  the  practice  of  the  courts  ;* 
and  he  can  not  act  in  his  official  capacity  beyond  the  juris- 
diction of  the  court  by  which  he  was  appointed.* 


(1854).    An  injunction  is  embodied  *  Chatauqua  County  Bank  v.White^ 

more  or   less   in   every  order   ap-  6Barb.  (N.Y.)  589  (1849).  See  Booth 

pointing  a  receiver.  v.    Clark,   58  U.  S.  (17  How.)  322, 

"  See  Boyd  v.  Murray,  3  Johns.  331  (1854) ;  bk.  15  L.  ed.  164  ;  In  ra 

Ch.  (N.  Y.)  48  (1817).  Eagle  Iron  Works.  8  Paige  Ch.  (N. 

"  Payne  v.  Baxter,  2  Tenn.   Ch.  Y.)  385  (1840) ;    Verplank  v.  The 

517  (1876).  Mercantile  Ins.  Co.,  2  Paige  Ch.  (N. 

>  Panton  v.  Zebley,  19  How.  (N.  Y.)  438,   452  (1831) ;    Lottimer  v. 

Y )  Pr.  394  (1860).  Lord,  4  E.  D.  Smith  (K  Y.)  183 

«  Favorite  v.  Deardorff,  84  Ind.  (1855) ;  Bowersbank  v.  Colasseau,  3 

655  (1882).  Ves.  164  (1796) ;  1  Barb.  Ch.  Pr.  (2d 

»  Foster  v.   Townshend,   2  Abb.  ed.)  669  ;  2  Id.  522. 

(N.  Y. )    N.    C.    29,    34   (1877);  •  Moseby  v.  Burrow,  52  Tex.  396 

Attorney-General  v.  Coventry,  1  P.  (1880).    But  it  has  been  held,  that 

Wm.  307  (1716) ;  Hyde  v.  Greenhill,  where    a    mortgage    of    property 

1  Dick.  106  (1745) ;  Sutton  v.  Stone,  situated  in  one  state  is  executed  to  a 

1  Dick.  107  (1745).     See  Neale  v.  receiver  appointed  in  another  state, 

Bealing,  3  Swan.  304  n.  c.  (1744) ;  such  receiver,  or  his  successor  in 

Jeremy  Eq.  Jurisd.  252,  253.  office,  may  maintain  an  action  in  his 

*  Huerstel   v.   Lorillard,  6  Robt.  own  name  to  foreclose  the  mortgage 

(N.  Y.)  260  (1867).  in  the  state  where  the  premises  ara 


774  NATUKE   OF   EECEIVER's   POSSESSION.         [§  652 

An  order  appointing  a  receiver  is  per  se  a  sequestration 
of  the  property,  and  gives  all  the  necessary  means  of  enforcing 
the  receiver's  rights ;'  but  if  the  person  appointed  receiver 
fails  to  qualify  under  the  order,  he  will  acquire  no  interest 
in  or  right  to  the  property.' 

§  652.  Nature  of  receiver's  possession.— It  has  been 
said,  where  a  receiver  is  appointed  on  the  application  of  the 
mortgagee  in  a  mortgage  foreclosure,  to  take  charge  of 
the  property  and  to  collect  the  rents  and  profits,  that  such 
receiver  is  in  law  an  agent  of  the  mortgagor,  the  owner  of 
the  legal  estate  ;*  but  the  better  doctrine  seems  to  be  that 
he  is  an  officer  of  the  court,  appointed  on  behalf  of  all  who 
may  establish  an  interest  in  the  property,*  and  not,  in  any 
sense,  a  representative  of  the  party  securing  his  appoint- 
ment." The  property  in  his  hands  is  in  custodia  legis ;' 
his  possession  is  the  possession  of  the  court  and  is  entitled 
to  its  protection.'  The  possession  of  a  receiver  is  valid  aa 
against  attaching  creditors,  even  when  the  property  is 
situated  in  another  state.' 

Where  a  court,  having  jurisdiction  of  the  case,  has  appointed 
a  receiver  for  the  property  which  is  the  subject  of  the 
suit,  and   the  receiver  is  in  possession,   no  other  court  of 


situated.     Iglehart  v.  Bierce.  36  III.  58  U.  S.  (17  How.)  322  (1854) ;  bk. 

133    (1864).     See    Dixon    v.   Buell.  15  L.  ed.   164  ;  Angel  v.  Smith.  9 

Adm'r,  21  111.  203(1859);  Townsend  Ves.  336  (1804);   Jeremy  Eq.  Jur. 

V.  Carpenter,  11  Ohio,  21  (1841).  248,  249  ;  2  Dan.  Ch.  Pr.  1406. 

>  Porter  v.  Williams,  9  N.  Y.  142  «  Ross    v.    Williams,    11    Heisk. 

(1853)  ;  8.  c.  59  Am.  Dec.  519.  (Tenn.)  410  (1872). 

2  Cook  V.  Citizens'  Bank,  73  Ind.  •"  King  v.  Ohio  &  M.  R'y  Co..  7 

256  (1881).  Biss.    C.    C.    529  (1877)  ;    Field    v. 

»  See  Chinuery  v.  Evans,  11  H.  L.  Jones,  11  Ga.  413  (1852) ;  Hutchin- 

Cas.  134  (1864).  son   v.    Hampton,    1   Mon.    T.    39 

*  Iddings  V.  Bruen,  4  Sandf.  Ch.  (1868) ;  People  v.  Brooks,  40  Mich. 

(N.  Y.)  417  (1846) ;  Booth  v.  Clark,  333  (1879) ;   8.  c.  29  Am.  Rep.  534 ; 

58  U.  S.  (17  How.)  322,  331  (1854j  ;  Battle   v.    Davis,    66    N.    C.    252 

bk.  15  L.  ed.  164  ;  Skip  v.  Harwood,  (1872). 

3  Atk.  564  (1747).  »  Chicago,  M.  &  St.  P.  R.  Co.  v. 

'"  Lottimer  v.  Lord,  4  E.  D.  Smith  Keokuk  Northern  Line  Packet  Co., 

(N.  Y)  183  (1855);  Tillinghast   v.  108111.317(1884);  s.  C,  48  Am.  Rep. 

Champlin,  4  R.  L  173  (1856) ;  s.  c.  557. 
67  Am.  Dec.  510  ;  Booth  v.  Clark, 


§  658.]         EIGHTS    AND    POWERS    OF    RECEIVERS.  775 

co-ordinate  jurisdiction  can  interfere  with  the  property,  or 
entertain  complaints  against  the  receiver,  or  remove  him,* 
or  in  any  way  interfere  with  his  possession,  without  leave  of 
the  court  which  made  the  appointment.* 

§  653.  Rights  and  powers  of  receivers. — Until  his 
appointment  is  complete,  a  receiver  has  no  right  to  the  rents 
and  profits  of  the  mortgaged  premises,  and  then  only  to 
such  as  remain  unpaid  ;  because  it  is  only  by  virtue  of  the 
receiver's  appointment  that  the  mortgagee  acquires  an 
equitable  lien  on  the  unpaid  rents.*  A  receiver  appointed 
in  a  mortgage  foreclosure  has  no  powers  except  those  con- 
ferred upon  him  by  the  order  appointing  him  and  by  the 
practice  of  the  court.*  And  the  powers  thus  conferred,  do 
not  extend  beyond  the  jurisdiction  of  the  court  making 
the  appointment.'  Such  a  receiver  has  no  authority,  without 
an  order  of  the  court,  to  disburse  money  to  any  person,'  or 
in  any  manner  to  lessen  the  funds  in  his  hands,  as  by 
expenditures  for  repairs.' 

Where,  pending  the  foreclosure  of  a  mortgage  on  a  farm, 
a  receiver  is  appointed  on  the  written  assent  of  all  the  solici- 
tors of  all  the  parties  in  interest,  with  power  to  let  the 


'  Bruce  v.  Manchester  &  K.  R.  R.  *  Verplank    v.     Mercantile     Ins. 

Co..  19 Fed.  Rep.  342(1884);  Young  Co.,  2  Paige  Ch.  (N.  Y.)  438,  452 

V.  Montgomery  &  E.  R.  R.  Co.,  2  (1831);   Booth  v.  Clark,   58  U.   S. 

Woods  C.  C.  606  (1875) ;  Kennedy  (17  How.)  323,  331  (1854)  ;  bk.  15  L. 

V.  Indianapolis,  C.  &  L.  R.  Co.,  2  ed.  164.     See  Lottimer  v.  Lord,  4 

Flipp.  C.  C.  704  (1880) ;  s.  c.  3  Fed.  E.  D.  Smith  (N.  Y.)  188  (1855) ;   In 

Rep.  97  ;  11  Cent.  L.  J.  89  ;  26  Int.  re  Eagle  Iron  Works.  8  Paige  Ch. 

Rev.  Rec.  390  ;  10  Rep.  359.  (N.  Y.)  385  (1840)  ;  Bowersbank  v. 

»  See    Foster    v.    Townshend,    2  Colasseau,  3  Ves.  164  (1796). 

Abb.  (N.Y.)N.C.  29,36(1877);  Sea  »  Booth    v.   Clark.   58   U.   S.   (17 

Ins.  Co.  V.   Stebbius,  8  Paige  Ch.  How.)  322,  331  (1854) ;  bk.  15  L.  ed. 

(N.  Y.)  565  (1841) ;  Angel  v.  Smith,  164. 

9  Ves.  336.  338  (1804) ;  Pelham  v.  «  Duffy  v.  Casey,  7  Robt.  (N.  Y.) 

Duchess  of  New  Castle,   3  Swan.  79  (1868).     Counsel  in  a  case  can 

289,  293  n.  (1819) ;  1  Story  Eq.  Jur.  not  compel  a  receiver  to  pay  them 

(11th  ed.)  833a.  moneys  to  which  they  think  them- 

'  Rider  v.  Vrooman,  12  Hun  (N.  selves    entitled,    under    penalty   of 

Y.)  299  (1877).  See  Bank  of  Ogdens-  removal.     See  Hospes  v.  Almstedt, 

burg  V.  Arnold,   5  Paige  Ch.   (N.  13  Mo.  App.  270  (1885). 

Y.)  38  ( 1835 ) ;   Favorite  v.    Dear-  '  Wyckoff  v.  Scofield,  103  N.  Y. 

dorff,  84  Ind.  555  (1882).  630  (1886).     It  seems  that  the  court 


7V6  DUTIES   OF   KECETSTEB.  [§  654. 

premises,  he  may  let  the  farm  for  a  year  without  a  special 
order  of  the  court,  that  being  the  usual  term  for  such  a  lease ; 
and  such  a  lease  will  neither  be  limited  nor  terminated  by  the 
duration  of  the  suit.  If  the  mortgagee  is  appointed  receiver, 
he  must  obtain  as  large  a  rent  as  possible,  although  it  may 
exceed  the  amount  due  on  his  mortgage.' 

A  receiver  authorized  as  such  to  execute  formal  satis- 
factions and  discharges  of  mortgages  in  his  hands  upon 
payment,  has  also  authority  to  receive  payment  of  the 
amounts  secured  by  such  mortgages,  although  the  same  may 
not  be  due  at  the  time.'  A  receiver  appointed  in  a  mortgage 
foreclosure  has  the  same  powers  and  is  governed  by  the 
same  rules  in  respect  to  the  bringing  and  the  defending  of 
suits  as  receivers  in  other  actions.* 

§  654.  Rights  and  duties  of  receivers. — A  receiver  in  a 
mortgage  foreclosure,  being  an  officer  of  the  court,  is 
entitled  to  receive  the  guidance  and  protection  of  such 
court,*  and  to  be  instructed  as  to  his  duties,*  the  same  as 
receivers  in  other  cases.     In  cases  of  doubt,  and  particularly 


may  direct   such    expenditures,    if  *  See  Phelps  v.  Cole,  3  N.  Y.  Code 

they  are  necessary  for  the  preserva-  Rep.  157  (1850);  Smith  v.  Woodruff, 

tion  of  the  property.     Wyckoff  v.  6  Abb.  (N.  Y.)  Pr.  65  (1858) ;  Mer- 

Scofield,  103  N.  Y.  630  (1886).  ritt  v.  Lyon,  16  Wend.  (N.  Y.)  410 

1  BollesT.  Duff,  37  How.  (N.  Y.)  (1836) ;  Field  v.  Jones,  11  Ga.  413, 

Pr.  162(1869).    The  receiver  can  not  417  (1852);  Gadsden  v.  Whaley,  14 

become  his  own  tenant,    unless  by  S.  C.  210  (1880);  Booth  v.  Clark,  58 

consent  of  the  parties.      Alven  v.  U.  S.  (17  How.)  322,  331  (1854) ;  bk. 

Bond,  3  Irish  Eq.  372  (1841) ;  Stan-  15  L.  ed.  164. 

nusv.  French,  13  Irish  Eq.  161(1840).  ■•  Cammack  v.  Johnson,  2  N.  J. 

Under  the  English  rule,  the  practice  Eq.  (1  H.  W.  Green)  163  (1839).     See 

required  the  receiver  to  obtain  an  in  r«  Receivers  of  Globe  Ins.  Co..  6 

order  of  the  court  before  letting  the  Paige  Ch.  (N.  Y.)  102  (1836);  Hooper 

lands.  Nealev.Bealing,  3Swanst.304  v.  Winston,  24  111.  353  (1860). 

(1744) ;  Morris  v.  Elme,  1  Ves.  Jr.  »  See  Smith  v.  New  York  Cent. 

139    (1790);    Swaby  v.   Dickon,   5  Stage  Co.,  18  Abb.  (N.  Y.)  Pr.  419 

Sim.  631  (1833) ;  Robertson  v.  Arm-  (1865);  s.  c.  28  How.  (N.Y.)  Pr.  208  ; 

Btrong,  2  MoUoy,  352  (1824),  or  its  Jure  VanAllen,  37  Barb.  (N.  Y.)225 

approbation  of  the  matter;  Duffieldv.  (1861);  Curtis  v.  Leavitt,   10  How, 

Elwes,  11  Beav.  590  (1849);  Wynne  v.  (N.  Y.)  Pr,  481  (1855) ;  8.  C.  1  Abb. 

ISTewborough,  1  Ves.  Jr.  164  (1790),  (N,  Y.)  Pr.  274. 

•  Heermans  v.  Clarkson,  64  N.  Y. 
171  (1876). 


§  655.]  DUTIES   OF   RECEIVEES.  TT7 

in  cases  where  there  are  conflicting  interests  or  claims,  the 
receiver  should  apply  to  the  court  for  instruction.' 

It  is  the  duty  of  a  receiver  to  obey  the  orders  of  the  court 
which  appointed  him,'  and  to  act  in  all  things  with  a  view 
to  the  equitable  rights  of  the  parties  in  interest.'  Where 
a  mortgagee  in  possession  is  appointed  receiver  of  the  prop- 
erty, his  individual  interests  must  not  be  permitted  to  inter- 
fere with  his  duties  as  receiver.*  A  receiver  must  pay  into 
court  all  the  rents  collected  by  him  prior  to  the  conveyance 
of  the  mortgaged  premises  pursuant  to  the  terms  of  the 
judgment  of  foreclosure  and  sale,' 

§  655.  Rents  bound  from  date  of  appointment  of 
receiver. — A  mortgagee  has  no  claim,  as  mortgagee,  to  the 
rents  and  profits  of  the  mortgaged  premises,  and  can  become 
entitled  to  receive  them  only  by  commencing  proceedings  for 
the  foreclosure  of  his  mortgage  and  procuring  the  appoint- 
ment of  a  receiver;'  and  even  then  he  will  be  confined  to 
the  rents  and  profits  accruing  during  the  pendency  of  the 
suit/     He  will  also  have  authority  to  collect  such  rents  and 


'  Lottimer  v.  Lord,  4  E.  D.  Smith  his  appointment  or  that  of  his  legal 

(N.  Y.)  183  (1855).     It  is  said,  how-  advisers.   Lottimer  v.  Lord,  4  E.  D. 

ever,  that  a  receiver  should  not,  of  Smith  (N.  Y.)  183  (1855). 

his  own  motion,  make  an  application  *  Bolles  v.  Duff,  54  Barb.  (X.  Y.) 

to  the  court ;   but  that,  if  he  finds  215  (1869) ;   s.   c.   37  How.  (N.  Y.) 

himself  in  circumstances  of  difficulty,  Pr.  162. 

he  should  request  the  plaintiff  to  '  Nichols  v.  Foster,  9  IST.  Y.  Wk. 

make  the  necessary  application,  and  Dig.  468  (1880). 

that  on  his  default,  the  receiver  may  ^  Wyckoff  v.   Scofield,  98  N.  Y. 

properly  apply.     Edw.  on  Rec.  158  ;  475  (1885).     See  Rider  v.  Bagley,  84 

2  Barb.  Ch.  Pr.  (2d  ed.)  287.  N.  Y.  461  (1881) ;  Argall  v.  Pitts,  78 

»  Corey  v.  Long,  12  Abb.  (N.  Y.)  N.  Y.  239  (1879).  It  was  held  ia 
Pr.  X.  S.  427  (1872) ;  s.  c.  43  How.  the  case  of  Rider  v.  Bagley,  supra, 
(N.  Y.)  Pr.  492.  In  case  of  the  thatby  the  appointment  of  a  receiver 
refusal  of  a  receiver  to  obey  the  in-  in  a  foreclosure  suit,  the  plaintiff  ob- 
structions of  the  court,  the  court  can  tains  an  equitable  lien  only  upon  the 
and  ought  to  remove  him.  Guar-  unpaid  rents,  and  that  until  such 
dians'  Savings  Institution  v.  Bowl-  appointment,  the  owner  of  the  equity 
ing  Green  Savings  Bank,  65  Barb.  of  redemption  has  a  right  to  receive 
(N.  Y.)  275  (1873).  the  rents  and  can  not  be  compelled 

*  It  has  been  said  that  the  receiver  to  account  for  them, 

should  follow  the  directions  of  the  '  Argall   v.    Pitts,   78  N.  Y.    239 

particular    plaintiff    who   procured  (1881) ;    Nealis  v.  Bussing,  9  Daly 


778  WHEN   RENTS   BOimi>.  [§655. 

profits  as  have  theretofore  accrued,  but  have  not  yet  come 
into  the  hands  of  the  owner  of  the  equity  of  redemption, 
and  apply  them  to  the  payment  of  the  mortgage  debt :'  but 
the  court  has  no  power  to  order  rents  which  have  already 
been  collected  and  are  in  the  possession  of  the  owner,  to  be 
paid  over  to  the  receiver.'  Neither  will  a  receiver  be  entitled 
to  rents  and  profits  collected  during  the  pendency  of  the 
motion  for  his  appointment.' 

A  mortgagee  has  no  right,  as  mortgagee,  to  the  rents  of 
the  mortgaged  premises  which  have  been  paid  into  court  by 
a  receiver  appointed  in  a  suit  by  legatees  for  the  adminis- 
tration of  the  estate  of  the  mortgagor,  although  the  mort- 
gagee may  have  obtained  a  decree  for  the  foreclosure  of  his 
mortgage  in  the  same  court  and  may  have  sold  the  mortgaged 
premises,  and  part  of  the  debt  remains  unsatisfied.  He 
should  have  applied  to  the  court  to  discharge  the  receiver 
in  the  suit  for  administration,  and  either  entered  into 
possession  himself  or  applied  for  a  receiver  in  his  action  for 
foreclosure.*     The    receiver    should    compel    tenants    not 


(N.  T.)  305  (1880);  Leeds  v.  Gifford,  for  rent  subsequently  accruing  and 

41  N.  J.  Eq.  (14  Stew.)  464  (1886) ;  remaining  unpaid. 

Conover  v.  Grover,  31  N.  J.  Eq.  (4  »  Wyckoff  v.  Scofleld,  98  N.  Y. 

Stew.)  539  (1879).     See  Stillman  v.  475  (1885);  Codrington  v.  Johnston, 

VanBeuren,   100  N.  Y.  439  (1885).  1  Beav.  524  (1838). 

In  Nealis  v.  Bussing,  supra,  it  was  *  Wyckoff  v.  Scofield,  98  N.  Y. 

held,  where  a  receiver  of  the  rents,  475  (1885). 

issues  and  profits  of  mortgaged  *  Rider  v.  Bagley,  84  N.  Y.  46 
premises  had  been  appointed  in  an  (1881).  Where  another  party  than 
actionfor  the  foreclosure  of  the  mort-  the  mortgagee  has  acquired  a  legal 
gage,  and  notice  of  his  appoint-  or  equitable  interest  in,  or  title  to, 
ment  had  been  given  to  a  lessee  of  the  rents  or  profits,  prior  to  the 
the  premises  under  a  lease  from  appointment  of  a  receiver  as  provi- 
the  mortgagor,  and  the  lessee  had  ded  in  section  299  of  the  Civil  Code, 
paid  rent  falling  due  to  the  receiver,  the  mortgagee's  claim  to  such  rents 
that  the  mortgagor  had  no  authority  or  profits  wUl  be  postponed  to  that 
to  accept  a  surrender  from  the  les-  of  the  intervening  claim.  Wool- 
see,  or  to  execute  a  new  lease  of  ti-  ley  v.  Holt,  14  Bush  (Ky .)  788 
premises  during  the  continuance  oi  (1879). 

the  receivership,  and  that  such  sur-  *  Coddington  v.  Bispham,  36  N. 

render  and  acceptance  and  new  lease  J.  Eq.  (9  Stew.)  574  (1883). 
constituted  no  defence  to  an  action 
by  the  receiver  against  the  lessee 


§  656.]  LIABILITT    OF    EECEIVERS.  779 

parties,  to  attorn  to  him,  or  he  will  not  be  permitted  to 
proceed  against  them  by  summary  proceedings.' 

§  656.  Personal  liability  of  receivers. — The  Hability  of 
a  receiver  under  a  mortgage  foreclosure  is  the  same  as  that 
of  a  receiver  appointed  in  any  other  case.  Thus,  a  receiver 
will  be  personally  liable  for  loss  through  neglect  or  a  breach 
of  duty,'  or  if  he  exceeds  his  authority.'  If  a  receiver 
departs  from  the  line  of  his  duty,  as  marked  out  by  the 
decree,  and  a  loss  ensues,  he  will  be  obliged  to  bear  it, 
although  he  may  have  acted  under  the  advice  of  counsel. 
But  property  lost  while  in  the  hands  of  a  receiver,  being  in 
custodia  legis,  can  not  be  considered  as  lost  by  conversion,  so 
as  to  render  the  obligors  on  a  bond  for  its  return,  liable 
therefor.* 

Where  a  receiver,  appointed  upon  the  application  of 
the  mortgagee,  embezzles  or  otherwise  wastes  the  rents 
and  profits,  the  loss  will  fall  on  the  mortgagor,  or  on  his 
estate.*  Yet  it  is  said  that  a  person,  at  whose  instance  a 
receiver  is  appointed,  should  see  that  he  performs  his  duties, 
and  that  any  loss  which  he  might  have  prevented  by  proper 
diligence,  must,  as  between  him  and  the  other  litigants,  be 
borne  by  him.* 


'  Bowery      Savings      Bank      v.  Stanton    v.    Alabama    R.    Co.,     2 

Richards,  3  Hun  (K  Y.)  366  (1875).  Woods  C.  C.  506  (1875). 

'  As  where  loss  is  sustained  by  a  *  Wall  v.  Pulliam,  SHeisk.  (Tenn.) 

tenant  quitting  possession  and  the  365  (1871). 

receiver  neglects  to  apply  promptly  *  Rigge  v.    Bowater,  3  Bro.  Ch. 

to  the  court  for  authority  to  re-let.  365  (1791)  ;     Hutchinson    v.    Lord 

Wilkins  v.    Lynch,  2   Molloy,  499  Massareene,  2  Ball  &  B.  (Ir.  Ch.)  55 

(1823) ;  Edw.  on  Rec.  573.  (1811). 

«  Hills  V.  Parker,  111  Mass.  508  «  Downs  v.  Allen,  10  Lea  (Tenn.) 

(1873);    8.    c.    15    Am.    Rep.    63;  652(1882), 


CHAPTER    XXXI. 


RECEIVER— WHEN  WILL  BE    APPOINTED. 


CAUSES  FOK  APPOINTMENT-INADEQUACY  OF  SECURITY-INSOLVENCY 

OF  MORTGAGOR— PART  ONLY  OF  DEBT  DUE— WHEN  RECEIVER 

DENIED— MORTGAGEE   IN   POSSESSION  -  ACCOUNTING    BY 

RECEIVER-DISCHARGE. 


g  657.  Causes  for  appomting  a  re- 
ceiver— Generally. 

658.  Inadequacy  of  security  and 

insolvency  of  mortgagor. 

659.  Receivership  in  Nevp  Jersey. 

660.  Lien  of  mortgagee  on  rents 

and  profits. 

661.  Receiver  of  deceased  mort- 

gagor's estate. 

662.  Imminent  danger  of  loss  or 

injury. 

663.  Accumulation  of  taxes  and 

interest,  ground  for  appoint- 
ing a  receiver. 

664.  Waste  and  fraud,  causes  for 

appointing  a  receiver. 

665.  Injunction    restraining  sale, 

cause  for  appointing  a  re- 
ceiver. 

666.  When  a  receiver  will  not  be 

appointed — Mortgagor  giv- 
ing security. 

667.  Where  part  only  of  debt  due, 

or  premises  can  be  sold  in 
parcels. 

668.  Where  mortgagee  guilty  of 

laches — Validity    of    mort- 
gage denied. 

669.  Where  property  in  possession 

of    stranger    to    the    fore- 
closure. 

670.  Where  a  bill  is  filed  to  redeem. 

671.  When  rents  can  not  be  appiied 

under  a  receiver. 

672.  When  receiver  applied  for  by 

defendant. 

673.  Receiver  not  appointed  dur- 

ing the  time    allowed   for 
redemption. 

674.  Receivers  as  between  differ- 

ent mortgagees. 


§  675.  Appointment  of  second   re- 
ceiver. 

676.  No  receiver  where  mortgagee 

holds  legal  title. 

677.  No  receiver  where  mortgagee 

in  possession. 

678.  Subsequent     mortgagee    re- 

deeming from  prior  mort- 
gagee in  possession. 

679.  Other    causes    for    receiver 

where  mortgagee  in  posses- 
sion. 

680.  When    a    receiver    will    be 

appointed  against  a  mort- 
gagee in  possession. 

681.  Receiver  where    first    mort- 

gagee out  of  possession. 

682.  Receiver  appointed  upon  the 

application  of  junior  mort- 
gagee. 
688.  Receiver  when  junior  mort- 
gagee in  possession. 

684.  General  practice  in  appoint- 

ing receiver. 

685.  Time  of  appointing  receiver. 

686.  Appointment  of  receiver  be- 

fore answer. 

687.  Appointment  of  receiver  after 

granting  decree. 

688.  Appointment  of  receiver  after 

sale. 

689.  Interference  with    receiver's 

possession. 

690.  Remedy  of  parties  claiming 

title  paramount  to  receiver. 

691.  Appeal — Continuance  of  re- 

ceivership. 

692.  Accounting  of  receivers. 

693.  Compensation  of  receivers. 

694.  Removal  of  receivers. 
6'95.  Discharge  of  receivers. 


:90 


§  657.]  CAUSES   FOE  APPOINTrN-G   EECEIVER.  781 

§  657.  Causes  for  appointing  a  receiver— Generally. — 
In  an  action  for  the  foreclosure  of  a  mortgage,  the  plaintiff 
is  entitled  to  the  appointment  of  a  receiver  to  take  charge 
of  the  property  and  to  collect  the  rents  and  profits  thereof, 
when  it  is  made  to  appear,  that  the  premises  will  probably 
be  insufficient  to  pay  the  mortgage  debt,'  that  the  party 
who  is  liable  for  any  deficiency  in  the  security  is  insolvent," 
and  that  the  plaintiff  has  prima  facie  an  equitable  right  to 
the  property  in  controversy.  A  receiver  will  also  be 
appointed  if  circumstances  of  fraud  or  bad  faith  on  the  part 
of  the  mortgagor  are  shown,*  or  if  there  are  other  facts 
involved  in  the  case  which  would  render  the  denial  of  a 
receiver  inequitable  or  unjust.*  A  receiver  will  always  be 
appointed  when  it  is  shown  that  the  rents  and  profits  have 
been  expressly  pledged  by  the  terms  of  the  mortgage  for 
the  payment  of  the  debt.* 

The  appointment  of  a  receiver  is  always  a  matter  resting 
in  the  sound  discretion  of  the  court ;  and  unless  it  is  made 
clearly  to  appear  that  such  discretionary  power  has  been 


>  MacKellar  v.  Rogers,  52  N.  T.  (1876);  Kerchner  v.  Fairley,  80  N. 

8upr.  Ct.  (20  J.  &  S.)  360  (1885) ;  C.  24  (1879) ;  Henshaw  v.  Wells,  9 

HoUenbeck    v.    Donell,   94    N.  Y.  Humph.  (Tenn.)  568  (1848) ;  Schrie- 

842(1883);   Main  v.   Ginthert,   93  ber  v.  Carey,  48  Wis.  208  (1879). 

Ind.  180  (1883) ;  Jacobs  v.  Gibson,  '  Haas  v.   Chicago  Building  So- 

9  Neb.  380  (1879).     See  Barnett  v.  ciety,  89  Dl.  498  (1878). 

Nelson,  54  Iowa,  41  (1880) ;  Myton  <  Haas  v.  Chicago  Building  So- 

▼.  Davenport,  51  Iowa,  583  (1879).  ciety,  89  111.  498  (1878).     See  Blood- 

«  See  Mitchell  v.  Bartlett,  51  N.  Y.  good  v.  Clark,  4  Paige  Ch.  (N.  Y.) 

447  (1873) ;  Astor  v.  Turner,  2  Barb.  577   (1834).     These    facts    may  be 

(N.  Y.)  444  (1848) ;  HoUenbeck  v.  made  to  appear  by  affidavits.     See 

Donell,  29  Hun  (N.  Y.)  94  (1883) ;  Vann  v.  Barnet,  2  Bro.    Ch.    157 

reversed   in    94   N.    Y.    342  ;    Sea  (1788) ;    Metcalfe  v.   Pulvertoft,   1 

Ins.  Co.  V.  Stebbins,  8  Paige  Ch.  Ves.  &  B.  180  (1813). 

(N.  Y.)  565,  568  (1841) ;   Price  v.  »  Shotwell  v.  Smith,  3  Edw.  Ch. 

Dowdy,  34  Ark.  285  (1879);  Main  v.  (N.   Y.)  588  (1842) ;    Verplank  v. 

Ginthert,92Ind.  180(1883);  White  V.  Caines,   1   Johns.   Ch.   (N.   Y.)  57 

Griggs,  54  Iowa,  650  (1880) ;  Myton  (1814) ;  Tysen  v.  Wabash  R.  Co.,  8 

V.  Davenport,  51  Iowa,  583  (1879) ;  Biss.  C.C.  247(1878).  See  Morrison  v. 

Douglass  V.  Cline,  12  Bush.  (Ky.)  Buckner,  Hempst.  C.  C.  442  (1843) ; 

608  (1876) ;   Chase's  Case,  1  Bland  Lloyd  v.  Passingham,  16  Ves.  59 

Ch.  (Md.)  206    (1826) ;    Brown    v.  (1809).    See  Warner  v.  Gouverneur's 

Chase,  Walk.  Ch.  (Mich.)  43  (1842) ;  Ex.,  1  Barb.  (N.Y.)  36  (1847);  Edw. 

Phillips   V.  Eiland,   52    Miss.    721  on  Rec.  356  ei  seq. 


782  CAUSES   FOR   APPOENTING   RECEIVER.  [§658. 

abused  to  the  injury  of  the  party  complairring,  it  will  not  be 
interfered  with.*  Where  the  rents  and  profits  are  not 
pledged  by  the  terms  of  the  mortgage,  the  court  must  be 
satisfied  that  the  premises  are  insufficient  to  pay  the  debt 
and  that  there  are  other  circumstances  which  justify  the 
appointment ;'  but  where  the  rents  and  profits  are  expressly 
pledged  for  the  payment  of  the  debt,  the  mortgagee 
or  his  assignee  need  not  conclusively  establish  a  right 
to  recover  on  the  mortgage.  If,  in  such  a  case,  he  makes 
out  a  probable  right  to  recover  and  shows  the  insolvency  of 
the  debtor,  he  will  be  entitled  to  the  appointment  of  a 
receiver.* 

In  Indiana,*  the  appointment  of  a  receiver  in  a  suit  to 
foreclose  a  mortgage  may  be  made  without  reference  to  the 
solvency  of  the  mortgagor,  when  it  appears  that  the  mort- 
gaged property  is  not  sufficient  to  satisfy  the  debt ;  and  the 
mortgagee  is  authorized  to  take  possession  of  the  land  and 
the  crops  growing  thereon,  although  the  mortgagor  may 
be  in  possession  at  the  time.* 

§  658.  Inadequacy  of  security  and  insolvency  of  mort- 
gagor.— In  an  action  for  the  foreclosure  of  a  mortgage  the 
court  has  power  to  appoint  a  receiver  of  the  rents  and 
profits  of  the  mortgaged  premises,  where  the  whole  amount 
of  the  mortgage  is  due,"  and  it  is  made  to  appear,  that  the 
proceeds  of  the  sale  will  probably  be  insufficient  to  satisfy 
the  debt  secured,*  that  the  property  is  rapidly  depreciating 
in  value,*  and  that  the  mortgagor,  or  other  party  personally 
liable  for  the  mortgage  debt,  is  insolvent.* 


'Jacobs  V.   Gibson,  9  Neb.   380  » Hursh  v.  Hursh,  99  Ind.    500 

(1879).  (1884). 

*  Shotwell  V.  Smith,  3  Edw.  Ch.  •  Bank  of  Ogdensburg  v.  Arnold, 
(N.  Y.)  588  (1843) ;  Whitehead  v.  5  Paige  Ch.  (N.  Y.)  88  (1835). 
Wooten,  43  Miss.  533  ( 1870 )  ;  1  Jacobs  v.  Gibson,  9  Neb.  380 
Frisbie  v.  Bateman,  24  N.  J.  Eq.  (1879).  See  Haas  v.  Chicago  Build- 
(9  C.  E.  Gr.)  28  (1873) ;  Cortleyeu  ing  Society,  89  111.  498  (1878) ;  New- 
V.  Hathaway,  11  N.  J.  Eq.  (3  Stockt.)  port&  Cinn.  Bridge  Co.  v.  Douglass, 
89  (1855)  ;   s.  c.  64  Am.  Dec.  478.  12  Bush  (Ky.)  673  (1877). 

»  DesMoines  Gas  Co.  v.  West,  44  «  Smith  v.  Kelley,  31  Hun  (N.  T.) 

Iowa,  23  (1876).  387(1884). 

*  Ind.  Rev.  Stat.  (1881),  §  1222.  »  Hollenbeck  v.  Donnell,  94  N.  Y, 


§  658.]  INADEQUACY    OF   SECURITT.  7S3 

Where  a  corporation  is  the  defendant  owner  in  a  mortgage 
foreclosure,  a  receiver  will  be  appointed  only  when  the 
mortgage  debt,  or  the  interest  thereon,  has  remained  unpaid 
for  at  least  thirty  days  after  it  became  due,  and  has  been 
demanded  of  the  proper  ofificer  of  such  corporation  ;  and 
he  will  be  appointed  then,  only  when  the  rents  of  such  prop- 
erty have  been  specifically  pledged  in»  the  mortgage,  or  the 
property  itself  will  probably  be  insufficient  to  pay  the  amount 
of  the  mortgage  debt.' 

To  entitle  a  mortgagee  to  a  receiver  he  must  show  clearly 
that  the  mortgaged  premises  are  an  inadequate  security  for 
the  debt  and  that  the  mortgagor,  or  other  party  personally 
liable  for  the  debt,  is  insolvent.*  Some  of  the  cases  hold  that 
the  mortgagor  must  be  shown  to  be  hopelessly  insolvent  f 
others,  however,  hold  that  in  order  to  justify  the  appoint- 
ment of  a  receiver  in  a  foreclosure,  it  need  not  appear  that 
the  mortgagor  is  insolvent,  if  it  is  shown  that  the  mortgaged 
property  is  of  insufficient  value  to  pay  the  debt.* 

In  no  case  will  a  receiver  be  appointed,  if  it  is  clear  that 
on  a  sale  under  the  decree  of  foreclosure,  the  mortgaged 


342  (1884),  reversing  29  Hun  (N.  442  (1843);    Lloyd  v.  Passingham, 

Y.)  94;   Warner    v,    Gouverneur's  16  Ves.  59  (1809). 

Ex.,   1   Barb.    (N.   Y.)    36    (1847);  'Laws  of  New  York  for   1870, 

Shotwell  V.  Smith,  8  Edw.  Ch.  (N.  chap.  151,  §3. 

Y.)  588  (1842) ;  Verplank  v.  Caines,  *  Syracuse  Bank  v.  Tallman,  31 

1   Johns.    Ch.    (N.    Y.)  58  (1814) ;  Barb.  (N.  Y.)  201  (1857) ;    Tyler  v. 

Astor  V.  Turner,  11  Paige  Ch.  (N.  Poppe,4Edw.  Ch.  (N.Y.)430(1844); 

Y.)  436  (1845) ;  s.  c.  43  Am.   Dec.  Shotwell  v.  Smith,  3  Edw.  Ch.  (N. 

766;    Howell  v.   Ripley,   10  Paige  Y.)  588  (1842);    Willis   v.    Corliss, 

Ch.  (N.  Y.)  45  (1843) ;  Sea  Insurance  2  Edw.  Ch.  (N.  Y.)  281,  287  (1834)  ; 

Co.  V.  Stebbins,  8  Paige  Ch.  (N.  Y.)  Haggarty  v.  Pittman,  1  Paige  Ch. 

565  (1841) ;  Bank  of  Ogdensburg  v.  (N.  Y.)  298  (1828) ;    s.  c.   19  Am. 

Arnold,  5  Paige    Ch.   (N.   Y.)    88  Dec.  434 ;  Wooding  v.  Maloue,  30 

(1835) ;    Quincy    v.    Cheeseman,    4  Ga.  979  (1860) ;  Edie  v.  Applegate, 

Sandf.    Ch.    (N.    Y.)    405    (1846);  14    Iowa,    273    (1862);    Cofer    v. 

Hughes  V.    Hatchett,   55  Ala.   631  Echerson,    6    Iowa,     502    (1858); 

(1876);  Price  v.  Dowdy,  34  Ark.  285  Blondheim  v.  Moore,   11  Md.  365, 

(1879) ;    Jacobs  v.  Gibson,  9  Neb.  374  (1857) ;  Clark  v.  Ridgely,  1  Md. 

380  (1879) ;    Tysen  v.  Wabash  R.  Ch.  Dec.  70  (1847). 

Co.,  8  Biss.  C.  C.  247  (1878);  Hunter  »  Cone  v.  Coombs,  5  MoCr.  C.  C. 

V.  Hays,   7  Biss.  C.  C.  362  (1877) ;  651  (1884) ;  s.  c.  18  Fed.  Rep.  576. 

3Iorrison  v.  Buckner,  Hempst.  C.  C.  *  Hursh  v.  IIursh,99  Ind.  500  (1884^ 


784  KECEivER  IN  NEW  j:ersey.    [§§  659-660. 

property  will  sell  for  enough  to  pay  the  debt,  interest  and 
costs.'  It  is  said  to  be  erroneous  to  appoint  a  receiver 
in  a  foreclosure,  where  neither  waste,  nor  failure  to  pay 
taxes,  nor  diminution  of  the  value  of  the  security,  nor 
increase  of  the  mortgage  debt  is  shown,  and  where  it  does 
not  appear  that  the  party  personally  liable  for  the  debt 
Is  not  responsible  for  any  probable  deficiency.* 

§  659.  Receivership  in  New  Jersey. — It  seems  that  the 
rule  in  New  York  and  in  other  states,  allowing  a  receiver 
where  the  premises  are  an  inadequate  security  for  the  debt, 
and  the  mortgagor,  or  other  party  personally  liable  therefor, 
is  insolvent,  has  never  been  adopted  in  New  Jersey,  where  a 
distinction  is  made  between  a  first  and  a  subsequent  mort- 
gagee, their  rights  being  essentially  different  in  that  state. 

The  first  mortgagee  has  a  legal  right  to  the  rents  and 
profits,  and  has  his  remedy  at  law  by  ejectment.  A  subse- 
quent mortgagee  is  better  entitled  to  the  remedy  of  a 
receiver,  because  he  has  no  right  at  law  to  the  possession 
of  the  premises  as  against  a  prior  mortgagee.*  But  where 
it  appears  that  the  mortgagor  is  insolvent  and  has  removed 
from  the  premises  and  given  the  possession  thereof  to  a 
party  who  occupies  them  for  his  own  use  without  paying 
rent,  and  it  also  appears  that  the  mortgagor  is  committing 
waste  and  that  the  premises  are  an  insufificient  security  for 
the  debt,  a  court  of  equity  will  appoint  a  receiver  to  take 
charge  of  the  property  while  the  prior  mortgagee  is  prose- 
cuting his  ejectment  at  law  to  obtain  possession  of  the  mort- 
gaged premises.* 

§660.    Lien  of  mortgagee  on  rents  and  profits.— On 

a  condition  broken,  by  which  a  mortgagee  is  authorized  to 
commence  a  foreclosure,  he  will  have  an  equitable  lien  upon 
the  rents  and  profits  of  the  mortgaged  property,  if  it  is  an 
inadequate  security  for  the  debt,  which  lien  may  be  enforced 


'  Shotwell  V.  Smith,  3  Edw.  Ch.  »  Cortleyeu  v.  Hathaway,  11  N.  J. 

(N.  Y.)  588  (1842) ;  PuUan  v.  Cin-  Eq.  (3  Stockt.)  40,  42  (1855). 

cinnati  &  C.  R.  R.  Co.,  4  Biss.  C.  C.  *  Brasted  v.  Sutton,  30  K  J.  Eq. 

35  (1865).  (3  Stew.)  462  (1879). 

-  Morris  v.  Branchaud,  52  Wis. 
187  (1881). 


§  661.]  LIEN    OF   MORTGAGEE   ON   RENTS.  785 

by  proper  proceedings ;'  but  if  he  makes  no  demand  for  the 
rents,  and  takes  no  steps  to  have  them  appHed  to  his  debt, 
the  mortgagor  can  continue  to  collect  them,"  because  until  the 
mortgagee  takes  possession  of  the  premises  or  files  a  bill 
for  foreclosure  and  procures  the  appointment  of  a  receiver, 
the  mortgagor  is  "owner  to  all  the  world,"  and  is  entitled  to 
all  the  profits  made.* 

Where  an  assignee  in  bankruptcy  is  collecting  the  rents 
and  profits,  if  the  mortgagee  desires  them  to  be  applied 
specifically  to  his  lien,  he  must  not  only  show  the  insuffi- 
ciency of  the  security,  without  the  pernancy  of  the  rents 
and  profits,  but  he  must  also  intercept  them  before  they 
reach  the  assignee.*  Where,  however,  only  one-sixth  of  the 
mortgage  debt  is  due,  and  the  premises  are  so  divided  that  a 
part  can  be  sold,  a  receiver  should  not  be  appointed  for  the 
whole  of  the  mortgaged  premises,  but  only  for  a  proportionate 
part  thereof,  sufficient  protection  being  afforded  thereby.* 

Notwithstanding  the  changes  in  the  practice  of  foreclosing 
mortgages,  the  remedy  by  a  receiver  remains  the  same  under 
the  New  York  Code  of  Civil  Procedure  as  under  the  old 
chancery  practice,'  and  the  mortgagee  may  obtain  a  specific 
lien  upon  the  rents  and  profits  of  the  premises,  though  not 
pledged  in  the  mortgage  for  the  payment  of  the  debt,  by 
diligently  obtaining  the  appointment  of  a  receiver;  a  subse- 
quent mortgagee  may  thus  gain  an  advantage  over  a  prior 
mortgagee  as  to  the  rents  and  profits.^ 

§  66i.  Receiver  of  deceased  mortgagor's  estate. — In 
the  appointment  of  receivers  in  mortgage  foreclosures,  no 
exception  is  made  in  favor  of  the  executors  or  administrators 


>  Jacobs  V.    Gibson,   9  Neb.  380  «  Hollenbeck  v.  Donnell,  94  N.  Y. 

(1879) ;  Hunter  v.  Hays,  7  Biss.  C.  342  (1884),  reversing  29    Hun    (N. 

C.  362  (1877).  Y.)  94. 

2  Hunter  v.  Hays,  7  Biss.  C.  C.  *  Hollenbeck  v.  Donnell,  94  N.  Y. 


362  (1877).  342,  345  (1884).     See  Post  v.  Dorr,  4 

8  American  Bridge  Co.  v.  Heidel-  Edw.  Ch.  (N.  Y.)  412  (1844). 

bach,  94  U.  S.  (4  Otlo),  798,  800  '  Post  v.  Dorr,  4  Edw.  Ch.  (N. 

(1876) ;  8.  c.  bk.  24  L.  ed.  322  ;  15  Y.)  412  (1844) ;  Howell  v.  Ripley,  10 

Alb.  L.  J.,  294.  Paige    Ch.    (N.    Y. )    43    (1843); 

*  Foster    v.    Rhodes,    10    Bankr.  Thomas  v.  Brigstooke,  4  Russ.  Gi 

Keg.  523  (1874).  (1827). 

(50) 


786         EECEIVEE  AGAINST   DECEASED  MORTGAGOR.    [§  661. 

of  deceased  mortgagors.*  No  matter  who  the  defendants 
may  be,  if  the  mortgaged  property  will  probably  be  insuffi- 
cient to  discharge  the  mortgage  debt,  the  plaintiff  is  in 
a  position  to  demand  that  his  security  be  augmented  by 
enough  of  the  rents  and  profits  to  make  it  good.  There  is 
no  good  reason  for  making  an  exception  in  favor  of  the  repre- 
sentative of  a  deceased  mortgagor ;  nor  can  a  court,  in  justice 
to  the  mortgagee,  do  so,  for  it  is  very  clear  that  rents  col- 
lected by  the  administrator  or  executor  would  not  be  subject 
to  the  lien  of  the  mortgage,  but  would  belong  to  the  general 
assets  of  the  estate  and  be  distributed  accordingly  among 
all  its  creditors.' 

When  a  receiver  is  sought  against  an  executor,  adminis- 
trator or  other  trustee,  to  collect  rents  and  to  manage  the 
estate,  it  must  be  established  by  suitable  proof  that  there 
has  been  some  positive  loss,  or  that  there  is  danger  of  loss 
of  the  funds,  as  by  waste,  or  misapplication,  or  apprehended 
insolvency,*  or  personal  fraud,*  or  misconduct,  or  negligence 
on  the  part  of  such  trustee.  The  mere  poverty  of  the  trustee 
is  not  a  sufficient  cause  ;*  unfitness,*  or  an  abuse  of  the  trust, 
or  danger  of  insolvency,  or  some  other  sufficient  cause,  must 
be  shown.* 

»  Jacobs  V.  Gibson,   9  Neb    380  §  266,  2d  subd.  provides  that,  "  in 

(1879).     In  Kerchner  v.  Fairley,  80  an  action  for  the  foreclosure  of  a 

N.  C.  24  (1879),  the  plaintiff  mort-  mortgage,     when    the    mortgaged 

gagee  was  administrator  of  one  of  property  is  in  danger  of  being  lost, 

two  mortgagors, whose  heirs  and  the  removed  or  materially  injured,  or  is 

other  mortgagor  were  defendants  in  probably    insufficient  to    discharge 

an  action  to  foreclose  the  mortgage ;  the  mortgage  debt,"  a  receiver  may 

the  property  mortgaged  was  inade-  be  appointed. 

quate  to  pay  the  debt,  and  the  mort-  '  Middletown  v.  Dodswell,  13  Ves. 

gagor  in  possession  was  insolvent ;  266  (1806). 

the  plaintiff  denied  an  alleged  pay-  *  See  Chautauqua  County  Bank  v. 

ment  of  the  debt  and  the  existence  White,   6  N.  Y,   236  ( 1832) ;    Mc- 

of  assets  in  his   hands   applicable  Elwain  v.  Willis,  9  Wend.  (N.  T.) 

thereto  ;  the  court  held  that,  in  such  548,  561  (1832) ;  Stileman  v.   Ash- 

acase,  it  was  not  error, on  application  down,  2  Atk.  477  (1742) ;  Edgell  v. 

of  the  plaintiff,  to  appoint  a  receiver  Haywood,  3  Atk,  357  (1746). 

to  secure  the  rents  and  profits  pend-  »  2  Story  Eq.  Jur.  (11th  ed.)  §  386. 

ing  the  litigation.  •  Anon.,  12  Ves.  4  (1806). 

« Jacobs  V.  Gibson,  9  Neb.  380,  '  Middleton  v.  Dodswell,  18  Ves. 

883  (1879).    The  Nebraska  Code  of  266  (1806). 
Civil   Procedure,    Gen.    Stat.   568, 


§  662.]  DANGER   OF   LOSS    OE    INJURY.  787 

§  662.  Imminent  danger  of  loss  or  injury.— After  an 
action  for  foreclosure  has  been  commenced  and  it  is  made  to 
appear  that  the  property  in  litigation,  or  the  rents  and 
profits  thereof,  are  in  danger  of  loss  or  injury,  a  receiver  may 
be  appointed  to  take  charge  of  such  rents  and  profits  in  the 
interest  of  the  litigants;'  but  the  rents  and  profits  of 
the  mortgagee's  security  must  be  in  actual  danger  to  warrant 
such  an  appointment.*  Thus,  if  the  mortgagor  of  an  estate, 
which  is  subject  to  a  rent  charge,  refuses  to  pay  the  rent,  a 
receiver  may  be  appointed.*  And  a  mortgagee  of  a  leasehold, 
who  has  made  advances  to  prevent  eviction  for  non-payment 
of  rent  by  the  mortgagor,  may  have  a  receiver  appointed, 
notwithstanding  the  fact  that  the  interest  on  the  mortgage 
may  have  been  regularly  and  promptly  paid.* 

If  it  appears  to  the  court  that  the  property  is  in  danger 
of  being  lost'  or  materially  injured,*  or  if  there  is  reason  to 
apprehend  that  the  mortgagee  will  be  in  a  worse  situation 
if  the  appointment  is  delayed,'  the  appointment  of  a  receiver 
will  be  granted  almost  as  a  matter  of  course.'  Thus,  it  is 
thought  that  the  court  may,  in  its  discretion,  appoint  a 
receiver  of  the  rents  and  profits  during  the  pendency  of  a 
foreclosure,  where  it  appears  that  the  premises  are  chiefly 
valuable  for  use  during  the  continuance  of  an  oil  business,, 


'  Newport  &  Cin.  Bridge  Co.  v.  *  Kelly  v.    Stanton,    1  Hog.    395 

Douglass,  12  Bush  (Ky.)  673  (1876).  (1820). 

See  Shotwell  v.  Smith,  3  Echv.  Ch.  *  Bloodgood  v.  Clark,  4  Paige  Ch. 

(N.Y.)588(1842);  Verplankv.Caines,  (N.  Y.)  577  (1834);  Evans  v.  Coven- 

1  Johns.    Ch.   (jSr.   Y.)    57    (1814);  try,  5  DeG.,  M.  &  G.  811,  918  (1854); 

Morrison  v.  Buckner,  Hempst.  C.  C.  Metcalfe  v.  Pulvertoft,  1  Ves.  «&  B. 

442  (1843);   Tysen  v.    Wabash   R.  180(1813). 

Co.,  8  Biss.  C.  C.  247  (1878) ;  Park-  « Williamson  v.  Wilson,  1  Bland 

hurst  V.  Kinsman,  2  Blatchf.  C.  C.  Ch.  (Md.)  421  (1826)  ;  Chase's  Case, 

78  (1848) ;  Lloyd  v.  Passiiigham,  16  1  Bland  Ch.  (Md.)  213  (1826);  Leven- 

Ves.    59  (1809) ;    N.   Y.   Code  Civ.  son  v.  Elson,  88  N.  C.  182  (18S3). 

Proc.  §  713.  ■"  Thom-HS  v.  Davies,  11  Bcav.  29 

»  Chase's  Case,  1  Bland  Ch.  (Md.)  (1847) ;    Metcalfe  v.    Pulvertoft,   1 

266  (1826) ;  s.  c.  17  Am.  Dec.  277.  Ves.  &  B.  180  (1818) ;  Aberdeen  v. 

«  Pritchard  v.  Fleetwood,  1  Meriv.  Chitty,  3  Y.  &  C.  870,  382  (1838). 

54  (1815) ;    Harris  v.  Shee,  1  J.  &  «  Oldfield  v.  Cobbett,  4  L.  J.  Ch. 

LaT.  92    (1846);    8.    c.   6  Ir.  Eq.  (N.    S.)  272  (1835);    Middleton    v. 

543.  Dodswell,  13  Ves.  266  (1806). 


788  ACCUMULATION    OF   TAXES.        [§§  663-664. 

and  that  they  are  rapidly  depreciating  in  value  by  reason  of 
the  fact  that  the  oil  business  is  rapidly  decreasing  at  that 
point.'  Reason  for  apprehending  that  the  rents  and  profits 
will  be  lost  and  the  security  thereby  impaired,  is  the  primary 
ground  for  appointing  a  receiver." 

§  663.  Accumulation  of  taxes  and  interest,  ground  for 
appointing  a  receiver. — In  proceedings  to  foreclose  a  mort- 
gage, a  receiver  should  be  appointed  on  the  application  of 
the  plaintiff  in  a  case  where  the  mortgaged  premises  are  an 
inadequate  security  for  the  debt,  or  where  he  has  no  per- 
sonal security  and  the  mortgagor  has  not  paid  the  interest 
or  the  taxes  on  the  premises,'  even  though  the  unpaid  taxes 
may  be  a  lien  subsequent  to  the  mortgage.*  Where  it  is 
shown  that  the  mortgaged  premises  are  about  to  be  sold  for 
taxes,  a  receiver  will  be  immediately  appointed.* 

§  664.  Waste  and  fraud,  causes  for  appointing  a 
receiver. — Where  waste  has  been  committed  by  a  person  in 
possession  of  the  property,  or  it  has  depreciated  in  value 
through  the  fault  and  negligence  of  the  mortgagor  in  posses- 
sion, or  where  he  is  misapplying  the  rents  and  profits,  the 


»  Smith  V.  Kelley,  31  Hun  (N.  Y.)  66    Cal.    606    ( 1885 ) ;     Buchanan 

387(1884).  V.   Berkshire  L.  Ins.   Co.,  96  Ind. 

2  Rollins  V.  Henry,  77  N.  C.  467  510  (1884) ;    Callanan  v.   Shaw,  19 

(1877).     Where  the  defendant  in  an  Iowa,  183  (1865);  Clagett  v.  Salmon, 

action  to  foreclose  a  trust  deed  on  a  S  Gill  &  J.  (Md.)  314  (1833) ;  Brown 

mill  property  suffered  it  to  be  idle,  v.    Chase,   Walk,    Ch.    (Mich.)    43 

and  the  plaintiffs  took  possession  of  (1843)  ;  Stockman  v.  Wallis,  30  N. 

and  managed  it,  the  court  held  that  J.  Eq.  (3  Stew.)  449  (1879);  Johnson 

neither  the  mill  nor  the  rents  were  v.  Tucker,  2  Tenn.  Ch.  398  (1875). 

in  such  "danger  of  being  lost  or  See  also  Haas  v.  Chicago  Building 

materially  injured "  as  entitled  the  Society,  89  111.  498  (1878) ;  Brasted 

plaintiffs  to  the  appointment  of  a  v.  Sutton,  30  N.  J.  Eq.  (3  Stew.)  462 

receiver.    Sleeper  v.  Iselin,  59  Iowa,  (1879);  Chetwood  v.  Coffin,  30  N.  J. 

379  (1882).  Eq.  (3  Stew.)  450  (1879)  ;  Oliver  v. 

»  Mahon  v.  Crothers,  28  N.  J.  Eq.  Decatur,  4  Cr.  C.  C.  458  (1834). 

(1   Stew.)    567    (1877);    Finch    v.  "  chetwood  v.   Coffin,   30  N.   J. 

Houghton,  19  Wis.  149  (1865).     See  Eq.  (3  Stew.)  450  (1879). 

Sidenberg  v.  Ely,   90    N.    Y.    257  *  Darusmont    v.    Patton,    4    Lea 

(1882);  Wall  Street  Ins.  Co.  V.  Loud,  (Tenn.)    597(1880).      See  Haas  v. 

20  How.  (N.  Y.)  Pr.  95  (1860) ;  Mc-  Chicago  Building  Society,   89  111. 

Lane  v.  Placerville  &  S.  V.  R.  Co.,  498  (1878). 


§  664.] 


WASTE    AND    FRAUD    CAUSES. 


789 


mortgagee  will  be  entitled  to  the  appointment  of  a  receiver.' 
Thus,  although  a  mortgagor  has  a  right  to  cut  timber,  yet 
where  he  has  become  insolvent  and  exercises  this  right  in 
bad  faith,  a  receiver  will  be  appointed  to  take  charge  of  the 
premises.' 

Pending  an  appeal  in  a  mortgage  foreclosure,  a  receiver 
may  be  appointed  to  preserve  the  rents  and  profits,  where 
such  rents  and  profits  are  being  wasted  by  an  heir  in  posses- 
sion.*   In  case  there  is  fraudulent  conduct  on  the  part  of  the 


>  "Wall  St.  Fire  Ins.  Co.  v.  Loud, 
20  How.  (N.  7.)  Pr.  95  (1860); 
"Worrill  v.  Coker,  56  Ga.  666  (1876); 
Haas  V.  Chicago  Building  Soc,  89 
111.  498  (1878) ;  Brasted  v.  Sutton,  30 
N.  J.  Eq.  (3  Stew.)  463  (1879); 
Chetwood  v.  Coffin,  30  N.  J.  Eq.  (3 
Stew.)  450  (1879);  Stockman  v. 
Wallis,  30  N.  J.  Eq.  (3  Stew.)  450 
(1879);  Mahon  v.  Crothers,  28  N. 
J.  Eq.  (1  Stew.)  567  (1877) ;  John- 
son V.  Tucker,  2  Tenn.  Ch.  398 
(1875) ;  Finch  v.  Houghton,  19  Wis. 
149  (1865) ;  Oliver  v.  Decatur,  4  Cr. 
C.  C.  458  (1834).  See  Chappell  v. 
Boyd,  56  Ga.  578  (1876) ;  Tufts  v. 
Little,  56  Ga.  189  (1876). 

•  Or  he  may  be  restrained  by  an  in- 
junction. Ensign  v.Colburn, 11  Paige 
Ch.  (N.  Y.)  503  (1844).  It  has  been 
said  that  the  mortgage  covers  the 
timber  standing  on  the  premises, and 
that  when  it  is  severed  from  the  free- 
hold without  the  con.sent  of  the  mort- 
gagee, he  has  a  right  to  hold  it  as  a 
part  of  his  security.  Ilutchins  v. 
King,  66  U.  S.  (1  Wall.)  53  (1863) ; 
bk.  17  L.  ed.  693.  But  the  general 
doctrine  seems  to  be  that  the  mort- 
gagee can  not  maintain  trover  for 
trees  cut  by  the  mortgagor.  John- 
son V.  White,  11  Barb.  (N.  Y.)  194 
(1851) ;  VanWyck  v.  Alliger,  6  Barb. 
(N.  Y.)  507  (1849);  Watson  v. 
Hunter,  5  Johns.  Ch.  (N.  Y.)  169 
(1821);    Winship  v.  Pitts,  3  Paige 


Ch.  (N.  Y.)  259  (1832) ;  People  v. 
Alberty,  11  Wend.  (K  Y.)  160 
(1834).  Yet  it  is  held  that  where  the 
mortgagor  is  insolvent,  the  mort- 
gagee may  maintain  an  action  for  an 
unauthorized  injury  to  the  mortgage 
security.  JMorgan  v.  Gilbert,  2 
Flip.  C.  C.  615  (1880) ;  s.  c.  2  Fed. 
Rep.  835  ;  Willard's  Eq.  Jur.  371. 
379.  After  the  timber  upon  the 
mortgaged  premises  has  been  severed 
from  the  freehold,  a  court  of  equity 
can  not  restrain  its  removal  ;  John- 
son V.  White,  11  Barb.  (N.  Y.)  194 
(1851) ;  VanWyck  v.  Alliger,  6  Barb. 
(N.  Y.)  507  (1849);  Watson  v. 
MeClay,  5  Johns.  Ch.  (N.  Y.)  169 
(18:21) ;  Hawley  v.  Clowes,  2  Johns. 
Ch.  (N.  Y.)  122  (1816) ;  Ensign  v. 
Colburn,  11  Paige  Ch.  (N.  Y.)  503 
(1845) ;  Winship  v.  Pitts,  3  Paige 
Ch.  (N.  Y.)  259  (1832) ;  People  v. 
Alberty,  11  Wend.  (K  Y.)  160 
(1834);  2  Story  Eq.  Jur.  (11th  ed.) 
giJlOie,  1017;  Willard's  Eq.  Jur. 
371,  379  ;  but  will  restrain  further 
waste,  W^eatherby  v.  Wood,  29  How. 
(N.  Y.)  Pr.  404  (1865),  and  decree  an 
accounting  for  the  timber  cut, 
Johnson  v.  White,  11  Barb.  (N.  Y.) 
197  (1851) ;  Spear  v.  Cutter,  5  Barb. 
(N.Y.)  486  (1849) ;  s.  c.  2  N. Y.  Code 
Rep.  100;  2  Story  Eq.  Jur.  (llih  ed.) 
§§  957,  1016,  1017. 

^  Brinkman  v.  Ritzingcr,  82  Ind. 
358  (1882). 


790  INJUNCTION    AGAINST    SALE.  [§665. 

mortgagor,  combined  with  danger  of  injury  to  the  mortgaged 
premises,  a  receiver  will  be  appointed  to  take  charge  of  the 
rents  and  profits  and  to  preserve  the  mortgaged  property;* 
but  in  such  a  case,  the  pleadings  should  contain  allegations 
of  specific  charges  of  fraud  or  of  imminent  danger  of  injury 
to  the  property." 

§  665.  Injunction  restraining  sale,  cause  for  appointing 
a  receiver. — In  a  case  where  the  mortgagor  has  obtained 
an  injunction  restraining  the  sale  of  the  mortgaged  premises, 
until  certain  counter-claims  can  be  passed  upon  and  the  sum 
really  due  on  the  mortgage  is  ascertained,  the  mortgagee 
will  be  entitled  to  have  a  receiver  appointed  to  take  charge 
of  the  property  and  to  secure  the  rents  and  profits  thereof, 
where  they  are  in  danger  of  being  lost.* 

In  Warwick  v.  Hammell,*  a  second  mortgagee  had  obtained 
an  order  of  sale  in  a  foreclosure,  and  a  stay  was  procured  by  a 
third  person,who  attacked  the  plaintiff's  title  to  the  mortgage 
in  a  court  of  equity.  The  mortgagor  in  possession  of  the 
premises  was  insolvent,  and  neither  the  taxes  nor  the  interest 
on  any  of  the  incumbrances  having  been  paid  for  three 
years,  the  second  mortgagee  was  held  to  be  entitled  to  a 
receiver  of  the  rents  and  profits  of  the  mortgaged  premises, 
pending  the  litigation  with  the  person  attacking  his  title  to 
the  mortgage. 


'  See  Orphan  Asylum  v.  McCar-  313  (1866) ;  Ladd  v.  Harvey,  21  N. 

tee,  Hopk.  Cli.  (N.  Y.)  429  (1825);  H.  (1  Fost.)  514  (1850);    Mordaunt 

Tomlinson  v.    Ward,  2  Conn.  396  v.    Hooper,    1    Amb.    311    (1756); 

(1818) ;  Powell  v.  Quiun,  49  Ga.  523  Lloyd  v.    Passingham,    16  Ves.  59 

(1873; ;  Crawford  v.  Ross,  39  Ga.  44  (1809) ;    Middleton  v.  Dodswell,  13 

(1869) ;  Jones  v.  Dougherty,  10  Ga.  Ves.  266(1806) ;  Hugonin  v.  Basley, 

273  (1851);   Voshell  v.  Hynson,  26  13  Ves.  105(1806);  Anon. ,  12  Ves.  4 

Md.  83  (1866) ;  Haight  v.'  Burr.  19  (1806). 

Md.  134  (1862) ;  State  v.  Northern  '^  Powell  v.    Quinn,   49    Ga.    523 

Cent.  R.  R.  Co.,  18  Md.  193  (1861)  ;  (1873). 

Blondlieim   v.    Moore,   11   Md.  365  ^  Oldham  v.   Wilmington   Bank, 

(1857) ;  Furlong  v.  Edwards,  3  Md.  84  K  C.  304  (1881). 

9y(18.>2):  Thompson  v.Diflfenderfer,  *  32    N.    J.    Eq.    (5    Stew.)    427 

1  Md.  Cb.  Dec.  489  (1S49);  Mays  (1880). 
V.  Rose.   1  Freem.  Ch.  (Miss.)  703 
()S43)  ;  Maynard  v.  Railey,  2  Nev. 


§  iS^6.^    MOETGAGOK  GIVING  ADDITIONAL  SECUEITY.  791 

§  666.  When  a  receiver  will  not  be  appointed — Mort- 
gagor giving  security. — Where  the  mortgaged  property  is 
of  such  value,  that  the  debt  can  be  paid  from  the  proceeds  of 
a  sale  of  the  premises  under  foreclosure,  a  receiver  will  not 
be  appointed  ;*  and  if  the  party  in  possession  of  the  prem- 
ises, as  owner  of  the  equity  of  redemption,  is  solvent,  there 
is  no  such  reasonable  cause  for  a  receiver  as  will  warrant  an 
appointment,  although  the  mortgagor  himself  may  be  insol- 
vent.* 

A  court  has  no  authority  to  interfere  with  a  mortgagor's 
right  to  collect  the  rents  and  profits  of  the  mortgaged 
premises,  unless  such  rents  and  profits,  as  well  as  the  prop- 
erty, have  been  pledged  as  security  for  the  payment  of  the 
debt,  or  unless  a  clear  want  of  sufficient  security,  or  waste, 
or  failure  to  pay  taxes,  or  diminution  of  the  value  of  the 
security,  or  mismanagement  of  the  property,  or  an  increase 
of  the  mortgage  debt  is  shown.'  A  receiver  will  not  be 
appointed,  in  the  absence  of  any  of  the  causes  above  set 
forth,  merely  because  the  mortgagee  wishes  to  turn  the  rents 
and  profits  to  his  own  use,  when  such  appointment  will  be 
to  the  injury  of  a  prior  mortgagee  ;*  nor  will  a  receiver 
be  appointed  on  the  application  of  one  defendant  as  against 
another.* 

Even  if  there  are  reasonable  grounds  for  believing  that 
the  mortgage  security  is  inadequate  to  satisfy  the  debt,  a 
receiver  will  not  be  allowed  on  the  application  of  the  plain- 
tiff, if  the  person  in  possession  of  the  mortgaged  premises, 
or  the  party  liable  for  the  deficiency,  gives  security  to  account 
for  the  rents  and  profits  as  the  court  shall  direct,  in  case 


,1  Williams  v.Noland.  2  Tenn.Ch.  man,    4    Sandf.    Ch.    (N.    Y.)  405 

151(1874).    See  Worrill  V.  Coker,  56  (1846);    Eslava    v.    Crampton,    61 

Ga.  666  (1876);  Pullan  v.  Cincinnati  Ala.   507  (1878)  ;  Sales  v.  Lusk,  60 

&  C.  O.  R.  Co.,  4  Biss.  C.  C.  35  Wis.  490  (1884) ;  s.  o.  18  Rep.  382  ; 

(1865).  Morris  v.  Branchaud,  52  Wis.  187 

'  Silverman  V.  North-western  Mut.  (1881);   Pullan  v.  Cincinnati,  &c., 

L.  Ins.  Co.,  5  111.  App.  124  (1880).  R.  Co.,  4  Biss.  C.  C.  35  (18G5). 

»  Shotwell  V.  Smith,  3  Edw.  Ch.  ■*  Sales  v.  Lusk,  60  Wis.  490  (1884>; 

<N.  Y.)  588  (1843);  Bank  of  Ogdens-  B.  c.  18  Rep.  382. 

burg  V.    Arnold,  5  Paige  Ch.  (N.  '  Robinson  v.  Hadley,  11   Beav. 

Y.)  38   (1835)  ;    Qnincy  v.   Cheese-  614  (1849). 


792  PART  ONLY  OF  DEBT  DUE.         [§  667. 

there  is  a  deficiency  upon  the  sale  of  the  premises  under  a 
decree  of  foreclosure.'  Where  the  rents  and  profits  of  the 
mortgaged  premises  have  been  already  applied  to  the  pay- 
ment of  the  mortgage  debt,  and  of  the  necessary  expenses 
incurred  in  the  management  and  care  of  the  property,  an 
appHcation  for  the  appointment  of  a  receiver  will  be  denied.'' 

§  667.  Where  part  only  of  debt  due,  or  premises  can  be 
sold  in  parcels. — In  those  cases  where  the  whole  debt  is  not 
due,  if  the  mortgagee  has  neglected  to  take  a  specific  pledge 
of  the  rents  and  profits  of  the  mortgaged  premises  as  security 
for  his  debt  before  it  becomes  due,  he  will  have  no  equitable 
right  to  the  rents  and  profits  in  the  meantime,'  and  a  receiver 
will  not  be  appointed  on  his  application,  except  possibly  in 
case  of  the  death  of  the  mortgagor.* 

Where  only  a  portion  of  the  mortgage  debt  is  due  and  no 
waste  or  failure  to  pay  taxes,  or  diminution  of  value  of  the 
security,  or  increase  of  the  mortgage  debt  is  shown,'  and 
the  mortgaged  premises  are  capable  of  being  divided 
and  sold  in  parcels  separately  without  injury  to  the  parties 
interested,  in  the  absence  of  any  pledge  or  specific  appro- 
priation, by  which  accruing  rents  of  that  portion  of  the 
premises  not  yet  liable  to  be  sold,  are  constituted  a  security 
to  the  mortgagee  for  the  portion  of  the  mortgap^e  not  yet 
due,  he  will  not  be  entitled  to  a  receivership,  for  the  pro- 
tection of  the  unmatured  portion  of  the  debt,  of  that 
portion  of  the  premises  for  the  sale  of  which  he  has  no 
accrued  right.* 


'  Sea  Ins.  Co.  V,  Stebbins,  8  Paige  way,  11  N.  J.    Eq.   (3  Stockt.)  39 

Ch.  (N.  Y.)565(1841).  See  Harper  v.  (1855) ;  s.  c.  64  Am.  Dec.  478. 

Grambling,  66  Ga.  236  (1880)  ;  Rich  »  Bank  of  Ogdensburg  v.  Arnold, 

V.  Colquitt,  65  Ga.  113  (1880);  Grant-  5  Paige  Cli.  (N.  Y.)  38  (1835).     See 

ham  V.  Lucas,  15  W.  Va.  425  (1879) ;  Astor  v.  Turner,  11  Paige  Ch.  (N. 

Talbot  V.  Hope  Scott,  4  Kay  &  J.  Y.)  436  (1845)  ;  s.  c.  43  Am.  Dec. 

141  (1858) ;  Pritchard  v.  Fleetwood,  766  ;     Howell   v.    Ripley,  10  Paige 

1  Meriv.  54  (1815);  Curling  v.  Town-  Ch.  (N.  Y.)  45  (1843). 

shend,  19  Ves.  633(1816).     Compare  *  Burrowes  v.   Malloy,   2  Jo.   & 

Clark  V.  Johnston,  15  W.  Va.  804  La  T.  521. 

(1879).  fi  Morris  v.  Branchaud,  52  Wis. 

*  Myton   V.  Davenport,   51  Iowa,  187  (1881). 

583  (1879).     See  Corlleyeu  v.  Hatha-  •  HoUenback  v.  Barnard,  94  N. Y. 


§§  668-669.]    MORTGAGEE  GUILTY  OF  LACHES.  79S 

§  668.  Where  mortgagee  guilty  of  laches— Validity  of 
mortgage  denied. — Where,  from  lapse  of  time  or  other 
circumstances,  a  mortgage  is  presumed  to  have  been  paid,  a 
receiver  will  not  be  allowed.'  Thus,  in  a  case  where  a  mort- 
jjagee  delayed  his  suit  for  foreclosure  and  permitted  the 
mortgagor  to  use  the  property  for  several  years,  and  after  a 
decree  was  rendered  and  a  sale  ordered,  neglected  to  enforce 
the  same,  a  motion  for  the  appointment  of  a  receiver  was 
denied,  the  court  saying:  "While  it  is  true  that  the  mort- 
gagee may  delay  his  suit  for  foreclosure  after  the  debt 
is  due  and  default  of  the  mortgagor  to  pay  it,  yet  if  he 
delays  his  remedy  and  permits  the  mortgagor  to  use  the 
property  for  several  years,  a  very  strong  case  of  probable 
injury  to  the  rights  of  the  mortgagee  must  be  made  out,  and 
there  must  be  a  pressing  necessity  for  the  interposition  of 
the  court ;  and  if,  as  in  this  case,  a  decree  has  been  rendered 
and  a  sale  ordered,  and  the  mortgagee  still  neglects  to  have 
it  enforced,  the  emergency  must  be  grave,  and  an  imperative 
necessity  for  the  relief  be  shown  to  exist,  before  a  court  will 
exercise  this  extraordinary  jurisdiction."' 

The  appointment  of  a  receiver  of  the  rents  and  profits  of 
mortgaged  premises  being  for  the  purpose  of  enforcing  the 
payment  of  the  debt  simply,  a  receiver  should  not  be 
appointed  to  take  charge  of  the  rents  and  profits  in  those 
cases  where  the  validity  of  the  mortgage  is  impeached  on 
probable  grounds.' 

§  669.  Where  property  in  possession  of  stranger  to 
the  foreclosure. — A  court  will  not  appoint  a  receiver  of  the 
rents  and  profits  of  property  in  the  possession  of  a  stranger 
to  the  suit  ;*  and  when  a  tenant,  who  is  not  a  party  to  the 


342  (1884).     See  Wyckoff  v.   Sco-         «  Cone  v.  Combs,  18  Fed.  Rep.  576 

field,  98  N.  Y.  475.  477  (1885);  Bank  (1883);  s.  c.  5  McCravy  C.  C.  651. 
of  Ogdensburg  v.  Arnold,  5  Paige  '  Leahy  v.  Arthur,    1   Hog.    92 , 

Ch.  (N.  T.)  38,  40  (1835) ;  Quincy  Shepherd    v.  Murdock,    2   Molloy, 

V.  Cheeseman.  4  Sandf.  Ch.  (N.  Y.)  531  (1824) ;  Darcy  v.  Blake,  1  Mol- 

405  (1846) ;  Morris  v.  Branchaud,  52  loy,  247  (1829). 
Wis.  187  (1881).  *  Searles  v.  Jacksonville,  P.  &  M. 

»  Shepherd  v.  Murdock,  2  Molloy,  R.  R.  Co.,  2  Woods  C.  C.  621  (1873). 

631  (1824) ;  Darcy  v.  Blake,  1  Mol-  See  Sea  Ins.  Co.  v.  Stebbins,  8  Paige 

loy,  247  (1829).  Ch.  (N.  Y.)  565"  (1841).     In  the  case 


794  PREMISES   IN    POSSESSION   OF    STRANGER.      [§670. 

action,  is  in  possession,  his  possession  will  not  be  disturbed 
by  the  appointment  of  a  receiver,  but  he  may  be  ordered  to 
attorn  to  the  receiver  and  to  pay  the  rent  to  him.' 

Where  a  tenant  goes  into  possession  pendente  lite,  the 
mortgagee  will  be  entitled  to  an  order  requiring  him  to  yield 
possession  of  the  premises  or  to  pay  the  rent  from  that  time 
to  the  receiver ;  but  he  will  have  no  right,  in  any  event,  to 
an  order,  especially  as  against  the  equitable  rights  of  others, 
which  will,  in  effect,  vest  in  him  the  possession  nunc  pro  tunc, 
as  of  a  time  prior  to  the  application.* 

§  670.  Where  a  bill  is  filed  to  redeem. — Upon  a  bill  to 
redeem,  where  the  plaintiff  is  in  possession  of  the  premises, 
and  they  are  ample  security  for  the  amount  admitted  by 
him  to  be  due,  the  court  will  not  appoint  a  receiver  of  the 
rents  and  profits  pending  the  litigation,  if  the  insolvency  of 
the  plaintiff  is  not  set  up,  or  if  it  is  alleged  and  denied.*  In 
no  case  can  a  receiver  be  allowed  on  a  bill  to  redeem,  unless 
the  person  in  possession  is  a  party  to  the  suit  or  a  tenant 
under  a  party.* 

The  fact  that  the  mortgagor  has  a  claim  against  the 
mortgagee  arising  out  of  a  different  transaction,  which  claim, 
if  valid,  is  a  set-off  against  the  sum  due  upon  the  mortgage, 
but  which  is  not  established  or  the  amount  thereof  adjusted, 
will  not  entitle  the  mortgagor  to  a  receiver  of  the  property 
in  the  hands  of  the  mortgagee.* 

It  is  thought  that  the  purchaser  at  a  foreclosure  sale  of 
the  equity  of  redemption  in  mortgaged  lands  has  no  right, 
upon  seeking  redemptig'  'yom  the  mortgagee,  to  compel  the 
application  of  person^  property  embraced  in  the  same 
mortgage  to  the  paymciit  of   the   mortgage  debt  to  the 


of  Whorton  v.  Webster,  56  Wis.  356  '  Zeiter  v.  Bowman,  6  Barb.  (N.' 

(1882),  this  question  was  raised,  but  Y.)  133  (1849). 

not  passed  upon.  '  Jenkins  v.  Hinman,  5  Paige  Ch. 

•  Sea  Ins.  Co.  v.  Stebbins,  8  Paige  (N.  Y.)  309  (1835). 

Ch.  (N.  Y.)  565  (1841).    See  Bank  of  *  Sea  Ins.  Co.  v.  Stebbins,  8  Paiga 

Ogdensburg  v.  Arnold,  5  Paige  Ch.  Ch.  (N.  Y.)  565  (1841). 

(N.  Y. )  38  (1835).     As  to  the  doc-  »  Bayaud  v.  Fellows,  28  Barb.  (N. 

trine  at  law  as  regards  a  tenant,  see  Y.)  451  (1858). 
Rogers  v.   Humphreys,  5   Nev.   & 
Mann.511  (1835);  s.c.  4  Ad.  &  El.  299. 


§  671.]         WUEN    RENTS    CAN    NOT    BE    APPLIED.  795 

exoneration  of  the  land ;  and  the  appointment  of  a  receiver  to 
take  charge  of  such  personal  property,  upon  a  bill  filed  by 
the  purchaser  to  redeem  the  mortgaged  lands,  and  an  order 
for  its  sale  and  the  application  of  the  proceeds  to  the  pay- 
ment of  the  mortgage  debt,  are  erroneous.' 

§  671.    When  rents  can  not  be  applied  under  a  receiver. 

— If  a  mortgage  or  deed  of  trust  does  not,  in  express  terms, 
create  a  specific  lien  upon  the  rents  and  profits  of  the  mort- 
gaged property,  a  receiver  thereof  should  not  be  appointed 
for  the  benefit  of  those  interested  in  the  proceeds  simply 
upon  an  averment  in  the  bill  that  the  mortgaged  estate  is  an 
inadequate  security  for  the  payment  of  the  debt,  and  that 
the  mortgagor  is  insolvent  ;*  because,  in  the  absence  of  a 
specific  clause  giving  such  a  lien,*  the  mortgagee  is  not  entitled 
to  and  has  no  lien  upon  the  rents  and  profits  prior  to  the 
foreclosure  sale,*  and  the  mortgagor,  though  insolvent,  may 
collect  or  assign  them,'  until  such  time  as  the  mortgagee 
becomes  authorized  to  proceed  by  an  action  against  the 
mortgagor  to  subject  the  property  to  the  payment  of  his 
debt." 

Where  a  mortgagee  wlio  has  neglected  to  take  a  specific 
pledge  of  the  rents  and  profits  of  the  premises,  obtains  an 
order  requiring  the  tenant  to  attorn  to  a  receiver  appointed 
in  a  foreclosure,  all  that  he  is  entitled  to  is  immediate  posses- 
sion of  the  premises  as  security  for  the  payment  of  his  debt.' 
A  mortgagee  becomes  entitled  to  the  rents  and  profits  only 


'  Lovelace  v.  "Webb,  62  Ala.  271  assignee  of  a  chattel  mortgage,  givea 

(1878).  by  the  tenant  to  the  mortgagor  to 

»Phcetix  Mut.  Life  Ins.  Co.  v.  secure   the  payment    of    the    rent. 

Grant,  3  McAr.  (D.  C.)  220  (1877).  Zeiter  v.  Bowman,  6  Barb.  (N.  Y.) 

«  Zeiter  v.  Bowman,  6  Barb.  (N.  133  (1849). 

Y.)  133  (1849);  Bank  of  Ogdensburg  s  See  Syracuse  Bank  v.  Tallman,  31 

V.  Arnold,  5  Paige  Ch.  (N.  Y.)  38  Barb.  (N.  Y.)  201  (1857) ;  Shotwell 

(1835).     See  Wyckoflf  v.   Scofield,  v.  Smith,  3  Edw.   Ch.  (N.  Y.)  588 

98  N.  Y.  475  (1885)  ;  Argall  v.  Pitts,  (1842)  ;  Hughes  v.  liatchett,  55  Ala. 

78  N.  Y.  239  (1879).  631  (1876). 

*  Where  a  mortgagee  has  neglected  «  gee  Jacobs  v.  Gibson.  9  Neb.  380 

to  take  a  specific  pledge  of  the  rents  (1879). 

aud  profits  of  the  premises  for  the  ■>  Zeiter  v.  Bowman,  6  'Barb.  (N. 

security  of  his  debt,  he  has  no  equit-  Y.)  133  i^lSiO). 
able  right  to  them  as  against  the 


796      WHEN  MORTGAGOR  MAY  HOLD  RENTS.   [§  672. 

by  commencing  a  suit  to  foreclose  and  by  procuring  the 
appointment  of  a  receiver,  and  he  will  then  be  confined  to 
the  rents  and  profits  accruing  during  the  pendency  of  the  suit.* 
He  does  not  thereby  acquire  a  lien  upon  rents  which  have 
already  accrued,  but  which  have  not  yet  come  into  the  hands 
of  the  owner  of  the  equity  of  redemption;'  nor  can  the  c6urt 
order  rents  already  collected  and  in  the  possession  of  the 
owner  to  be  paid  over  to  the  receiver  and  applied  upon 
the  mortgage  debt,'  because  the  equitable  lien  obtained  by 
his  appointment  extends  only  to  the  unpaid  rents.* 

Where  a  mortgagee  allows  the  mortgagor  to  remain  in 
possession  of  the  property  after  default,  the  mortgagor  may 
hold  the  rents  and  profits  to  his  own  use,  and  the  mort- 
gagee can  not  compel  him  to  account  for  them,*  though 
the  mortgaged  property  may  have  become  an  insufficient 
security. 

§  672.  When  receiver  applied  for  by  defendant. — A 
defendant  is  not  entitled,  as  a  matter  of  right,  to  the 
appointment  of  a  receiver,  even  where  the  plaintiff,  in  his 
complaint,  has  asked  for  a  receiver;  and  a  court  will  not 
appoint  a  receiver  on  a  defendant's  application,  if  it  is 
opposed  by  the  plaintiff ;°  neither  will  a  receiver  be  appointed 
on  the  application  of  one  defendant  as  against  another.^ 


>  Argall  V.   Pitts,   78  N.  T.  239  ">  Dow  v.  Memphis  &  L.  R.  R.  R. 

(1879).  Co.,  20  Fed.  Rep.  768  (1884). 

2  Wyckoff   V.  Scofield,  98  N.  Y.  «  Robinson  v.  Hadley,   11  Beav. 

475  (1885) ;  Hollenbeck  v.  Donnell,  C14  (1849).     No  costs  will  be  given 

94  N.  Y.  343  (1884).  to  the  plaintiff  under  such  circum- 

2  Wyckoff  V.  Scofield,  98  N.  Y.  stances. 

475  (1885) ;  Rider  v.  Bagley.  84  N.  •»  Robinson  v.    Hadley,  11  Beav. 

Y.  461  (1881) ;  Howell  v.  Ripley,  10  614  (1849).     In  this  case  the  court 

Paige  Ch.  (N.  Y.)  43  (1843).  refused  to  appoint  a  receiver  for  the 

*  Wyckoff  V.   Scofield,  98  IS".  Y.  property  in  the  hands  of  one  defen- 

475  (1885) ;  Rider  v.  Bagley,  84  K  dant  on  the  application  of  another 

Y.  461  (1881) ;    Argall  v.  Pitts,  78  defendant,  and  gave  as  a  reason  for 

K.  Y.  239  (1879) ;  Mitchell  v.  Bart-  such  refusal,  that  it  knew  no  in- 

lett,  51  N.  Y.  447  (1873) ;  Astor  v.  stance  of    a    receiver  having  been 

Turner,  11  Paige  Ch.  (N.  Y.)  436  appointed  upon  the  application  of 

(1845) ;  43  Am.   Dec.  766 ;   Howell  oue    defendant  as  against    another 

V.  Ripley,  10  Paige  Ch.  (N.  Y.)  43  dcfeuduut,  prior  to  a  hearing. 
(1843) ;  Lofsky  v.  Maujcr,  3  Saudf. 
Ch.  (N.  Y.)  69  (1845). 


§  673.]      NO    RECEIVER — ^TIME   FOR   REDEMPTION.  797" 

It  is  thought,  where  a  receiver  is  denied  to  a  defendant 
on  his  application  therefor,  that  he  can  obtain  the  desired 
relief  by  filing  a  cross-complaint  against  his  co-defendants 
and  the  plaintiff,  asking  for  the  appointment  of  a  receiver  and 
moving  his  appointment  in  such  cross-suit.' 

§  673.  Receiver  not  appointed  during  the  time  allowed 
for  redemption. — In  those  states  where  it  is  provided  by- 
statute  that  a  mortgagor  shall  have  a  specified  time  in  which 
to  redeem  the  mortgaged  premises  from  a  sale  made  under 
a  foreclosure,  the  mortgagee  is  not  entitled  to  have  a 
receiver  appointed  to  take  charge  of  the  crops,  rents  and 
profits  of  the  mortgaged  premises  during  such  period  allowed 
for  redemption,  the  mortgagor  having  a  right  to  the  posses- 
sion of  the  property  during  that  period,  and  the  mortgagee 
having  no  interest  whatever  in  such  crops,  rents  and  profits.* 

It  has  been  held  that  the  Indiana  statute,*  providing  for 
the  appointment  of  a  receiver  "in  actions  for  the  foreclosure 
and  sale  of  property,  where  it  is  in  danger  of  being  lost, 
removed  or  injured,  or  is  not  sufficient  to  discharge  the 
debt,"  applies  only  to  the  time  before  the  sale,  and  that 
while  the  mortgagor  remains  in  possession  of  the  premises 
during  the  year  of  redemption  after  the  sale,  a  receiver  should 
not  be  appointed.* 

A  statutory  provision  that  the  mortgaged  premises  may 
be  used  by  a  mortgagor  during  the  period  allowed  for 
redemption  in  the  same  manner  in  which  they  were  previ- 
ously used,  may  be  waived  by  express  contract.*  It  has 
been  held  that,  under  the  Michigan  statute,*  a  clause  in  the 
mortgage  giving  the  mortgagee  possession  in  case  of  default, 
can  not  be  carried  into  effect  by  appointing  a  receiver  in  a 


*  McCracken  v.  Ware,  3  Sandf.  »  Edwards  t.  Woodbury,  1  McCr. 
(N.  Y.)  688  (1850).  C.  C.  429  (1880) ;  s.  c.  3  Fed.  Rep. 

*  White  V.  Griggs,  54  Iowa,  650  14. 

(1880) ;   Lapham  v.  Ives,  8  Rep,  6  «  Comp.  L.  §  6263.     This  statute 

(1879) ;  8.  c.  13  West.  Jur.  357  ;  25  excludes  the  mortgagee  from  posses- 

Int.  Rev.  Rec.  186.  sion  until  he  acquires  an  absolute 

»  Acts  1879,  p.  169.  tiUe. 

*Sheek   v.  Klotz,    84   Ind.  .471 
(1882). 


'^dS  EECEIVEE   FOE   DIFFEEENT  MOETGAGEES.    [§674. 

foreclosure  until  after  default;  and  that,  even  then,  it  will 
be  a  matter  of  discretion.' 

Under  the  Oregon  statute,  which  provides  that  "  a  mort- 
gage of  real  property  shall  not  be  deemed  a  conveyance  so 
as  to  enable  the  owner  of  the  mortgage  to  recover  possession 
of  the  real  property  without  a  foreclosure  and  sale  according 
to  law,"  a  mortgagee  is  not  entitled  to  the  rents  and  profits 
before  foreclosure.*  Where  a  married  woman  mortgaged 
her  separate  property  under  this  statute  to  secure  the  debt 
of  her  husband,  and  the  mortgagee,  before  the  sale  of  the 
same,  to  satisfy  the  debt,  entered  and  took  the  rents  with- 
out the  consent  of  the  wife,  the  court  held  that  he  was  not 
entitled  to  credit  the  same  on  the  husband's  debt,  but  was 
liable  to  the  wife  as  for  the  use  and  occupation  of  the 
premises.* 

§  674.  Receivers  as  between  different  mortgagees. — 
Subsequent  mortgagees  are  entitled  to  the  appointment  of 
a  receiver  of  the  rents  and  profits  of  the  mortgaged  premises 
on  a  petition  showing  that  the  mortgaged  property  is  of  less 
value  than  the  amount  of  the  incumbrances.*  Where  an 
action  is  brought  to  foreclose  a  mortgage  and  all  the  lien- 
holders  are  made  parties,  and  a  receiver  is  appointed  upon 
the  application  of  one  of  the  mortgagees,  but  such  appoint- 
ment is  not  limited  to  any  party  or  lien,  and  it  afterwards 
appears  that  the  appointment  was,  in  fact,  necessary  for  all 
the  lienholders,  the  fund  collected  by  the  receiver  should  be 
treated  as  a  part  of  the  general  security  of  the  mortgagees, 
and  be  controlled  and  distributed  according  to  their  priorities.' 
But  if  the  receiver  is  appointed  on  the  motion  and  for  the 
benefit  of  a  particular  henholder,  such  appointment  will  be 
for  his  benefit  only;*  but  the  receivership  may  be  subse- 
quently extended  to  one  or  more  of  the  other  liens.* 


'  Beecher  v.  Marquette  «&  P.  R  » Williamson  v.  Gerlach,  41  Ohio 

Mill  Co.,  40  Mich.  307  (1879).  St.  682  (1885). 

*  Teal  V.  Walker,  111  U.  S.  242  «  Ranney  v.  Peyser,  83  N.  Y.   1 
(1884) ;  bk.  28  L.  ed.  415.  (1880). 

«  Sample  v.  Bank  of  British  Co-  »  Williamson  v.  Gerlach,  41  Ohio 

lumbia,  5  Sawy.  C.  C.  394  (1879).  St  682  (1885). 

*  Buchanan  v.  Berkshire  Life  Ins. 
Co.,  96  Ind.  510  (1884). 


§675.]  APPOmTmG    SECOND    RECEIVER.  ^^^ 

Where  the  appointment  is  not  limited  to  any  party  or 
lien,  it  is  of  no  consequence  upon  whose  application  the 
appointment  was  made,  for  the  fund  collected  by  the  receiver 
under  such  an. appointment  will  not  be  appropriated  to  any 
particular  claim.     Thus,  in  a  case  where  a  junior  mortgagee 
had  the  rents  of  the  property  applied  to  his  mortgage  to 
the   exclusion    of   prior  mortgagees,  it  was   held  that  the 
appointment  of  a  receiver  was  made  for  the  benefit  of  this 
lienholder  only,  and  where  no  other  lienholder  asked  to  have 
the    receivership    extended  to  his  lien,  that  the  rents  and 
profits  should  be  applied  to  the  discharge  of  his  debt  only. 
§  675.    Appointment  of  second  receiver.-One  appoint- 
ment of  a  receiver  does  not  exhaust  the  power  of  the  court 
under  the  New  York  practice.'     An  additional  receiver  will 
not  be  appointed,  however,  unless  it  appears  to  be  necessary 
for  the  protection  of  the  interests  of  those  desiring  it.      The 
fact  that  a  receiver  has  already  been  appointed  in  a  previous 
action  will  not  necessarily  interfere  with  the  appointment 
of  another  receiver   in   a   subsequent   suit.     But  where  a 
second  receiver  is  appointed  in  a  subsequent  suit,  the  duties 
of   such  second   receiver  will   be  subordinate   to   those  of 
the   first    one.      When  the  first   receiver  becomes  fufu/?is 
officio  the  second  will  take  the  funds,  or  any  remaining  por- 
tion thereof/  which  may  be  undisposed  of  by  the  court  in 

the  litigation.* 

Where  the  appointment  of  a  receiver  has  been  completed, 
whether  in  the  suit  first  commenced  or  in  a  subsequent  one, 
instead  of  appointing  another  receiver  for  the  same  property, 
the  court  will  usually  extend  the  receivership  of  the  one 
action  over  the  other.* 

•  Washington   Ins.   Co.   v.    Flei-  v.  Central  Trust  Co.,  22  Fed.  Re>. 

Bchauer.  10  Hun  (N.  Y.)  117  (1877) ;  513  (1885).                    ,    ..  Abb    m 

Post  V    Dorr   4  Edw.  Ch.  (N.  Y.)  '  Bailey  v.  Belmont,  10  Abb.  (N. 

^"(mS     Howell  V.   Ripley.   10  Y.)  Pr.  N.  S.  270.  273  (1871). 

Paifie  Ch.  (N.  Y.)  43  (1843);  Wil-  '  O'Mahoney  v.  Belmont.  62  N 

Son  V.  Gerlach.  41  Ohio  St.  682  Y.  133    149  (1875) ;   Ba.ley  v^Bel- 

.^gg-.  mont,  10  Abb.  (N.  Y.)  Pr.  JN.  o. 

«  See  People  v.  Security  Life  Ins.  270,  273  (1871). 

Co    79  N   Y  267(1879).  *  Osborn  v.  Heyer.  2  Paige  Ch. 

3  Vaba^h.  St.  L.  &  W.  R.  R.  Co.  (N.   Y.)    342   (1831) ;    LotUmer    v. 


800  NO  EEOEIVER  IF  MORTGAGEE  HOLDS  TITLE.    [§676. 

The  appointment  of  a  receiver  is  an  interlocutory  pro- 
ceeding from  which  no  appeal  lies,*  and  the  consent  of  the 
parties  to  an  appeal,  can  not  confer  jurisdiction  on  the 
appellate  court.'  Where  the  complaint  asks  for  the  appoint- 
ment of  a  receiver,  and  the  court  finds  that  a  receiver  should 
be  appointed  but  fails  to  appoint  one,  such  failure  can  not  be 
assigned  as  error  on  an  appeal  by  the  party  opposed  to  the 
appointment,  but  only  by  the  party  asking  for  such  receiver.' 

§  676.  No  receiver  where  mortgagee  holds  legal  title. 
— Where  the  legal  title  to  the  mortgaged  premises  is  in  the 
mortgagee,  he  will  not  be  entitled  to  the  appointment  of  a 
receiver,*  because  he  may  recover  possession  of  the  estate  by 
an  action  for  ejectment,*  without  the  aid  of  a  court  of 
chancery;*  but  if  he  has  only  a  mortgage  of  the  equity 
of  redemption  and  the  prior  mortgagee  is  not  in  possession, 
the  subsequent  mortgagee  may  have  a  receiver  appointed 
without  prejudice  to  the  right  of  the  first  mortgagee  to  take 
possession.^  If,  however,  there  is  a  subsisting  equity, 
which,  if  set  up  at  law,  would  lead  to  the  trial  of  questions 
which  might  be  tried  more  satisfactorily  in  equity,  the  mort- 
gagee, having  the  legal  estate,  will  be  entitled  to  a  receiver.* 

In  White  v.  Bishop  of  Peterborough,*  a  third  incumbrancer 
was  in  possession.     The  first  incumbrance  was  a  devise  for 


Lord,  4  E.  D.  Smith  (N.  Y.)  183,  Sturch    v.    Young.    5    Beav.    557 

191  (1855).  (1842) ;  Berney  v.  Sewell,  1  Jac.  & 

'  Wilson  V.  Davis,  1  Mon.  T.  98  w.  647  (1820).     But  see  Ackland  v. 

0^68).  Gravener,  31  Beav.  482  (1862). 

2  Wilson  V.  Davis,  1  Mont.  T.  98  *  The  action  of  ejectment  against 

(1868).     When  the  order  appointing  ^  mortgagor  has  been  abolished  in 

a  receiver  is  in  excess  of  the  juris-  j^g^  York  •  5  Wait  Pr.  190  •  N.  Y. 

diction  of  the  court,  it  is  subject  to  Code  Civ  Proc  S  1498 

review  under  the  California  Code.  e  Ackland  v.  Gravener,  31  Beav. 

§  1068.     See  LaSociete  Prancaise  v.  434  (i862).     See  Sturch  v.  Young,  5 

District  Court,  53  Cal.  495  (1879).  ggav.  557  (1842) ;  Berney  v.  Sewell. 

(1872)™°''''^  ^'  ^^^^^'''  ^^  ^''^'  ^"^^  ^   '^^''-  *  ^-  ^^^  ^^^^^^ '  ^'^^^'  ""• 

^  ^^^  ,.             „  ,,           ^    _  Bishop  of  Norwich,  3  Swanst,  113  n. 

*  Williams  v.  Robinson,  16  Conn.  (I8I6) 

524  (1844) ;  Mahon  v.  Crothers,  28  n  2  Spence  Eq.  Jur.  689. 

N.  J.   Eq.   (1    Stew.)    567   (1877) ;  8  Ackland  v.  Gravener,  31  Beav 

Beverley  v.  Brooke,  4  Gratt.fVa.)  209  432  (1862). 

(1847) ;  Williamson  v.  New  Albany  »  3  Swanst.  100  (1816). 

R.    Co.,  1  Biss.  C.  C,  201  (1857); 


§  677.J  NO  EECEIVEK  IF  MORTGAGEE  IN  POSSESSION.        801 

years,  to  secure  an  annuity,  and  the  second  incumbrance 
was  also  an  annuity  secured  for  a  term.  On  a  bill  filed  by 
the  second  incumbrancer,  Lord  Eldon  held  that  he  was 
entitled  to  a  receiver,  inasmuch  as  he  could  not  succeed  in 
ejectment  on  account  of  a  prior  legal  estate  which  might 
have  been  set  up  against  him.  And  it  has  been  held  that 
the  grantee  of  an  annuity  is  entitled  to  a  receiver  as  against 
judgment  creditors,  who  have  obtained  possession  under 
writs  of  elegit  or  sequestration,  if  there  is  a  legal  estate 
prior  to  the  term  securing  his  annuity,  which  bars  him  from 
proceeding  at  law  by  ejectment.* 

§  677.  No  receiver  where  mortgagee  in  possession. — 
It  is  a  general  rule  that,  as  against  a  prior  mortgagee  in 
possession  of  the  property,  a  receiver  will  not  be  allowed 
in  favor  of  a  subsequent  mortgagee,  as  long  as  any  part  of 
the  debt  remains  unpaid  to  the  prior  mortgagee,'  because  the 
prior  mortgagee  is  entitled  to  retain  possession  until  his 
claim  is  fully  paid,'  except  where  he  refuses  to  accept  the 
unpaid  balance,  or  admits  that  he  has  probably  received 
the  full  amount  of  his  claim.*  In  the  early  case  of  Berney 
V.  Sewell,*  the  rule  was  stated  thus:  "If  a  man  has  a  legal 
mortgage  he  can  not  have  a  receiver  appointed;  he  has 
nothing  to  do  but  to  take  possession.  But  if  he  has  only  an 
equitable  mortgage,  that  is  if  the  prior  mortgagee  is  not  in 
the  possession,  the  other  is  entitled  to  a  receiver  without 
prejudice  to  his  taking  possession  ;  but  if  he  is  in  possession, 
the  subsequent  mortgagee  can  not  have  a  receiver;  he  must 
redeem  from  the  prior  mortgagee."* 

•  Silver  v.  Bishop  of  Norwich,  3  Gr.)  210  (1835) ;  Rowe  v.  Wood,  3 

Swanst.  113  n.  (1816).  Jac.  &  W.  553  (1821). 

«  Patten  v.  The  Accessory  Transit  »  Callanan  v.  Shaw,  19  Iowa,  183 

Co.,4Abb.(N.Y.)Pr.  235(1857);  8.  C.  (1865). 

13  How.  (N.  Y.)  Pr.  502  ;  Quinn  v.  *  Berney  v.  Sewell,  1  Jac.  &  W. 

Brittain,  3  Edw.    Ch.  (N.   Y.)  314  649  (1820) ;  Hiles  v.  Moore,  15  Beav. 

(1839) ;  BoUes  v.  DufE.  35  How.  (N.  180  (1852). 

Y.)  Pr.  481  (1867) ;  Rapier  v.  Gulf  »  1  Jac.  «&  W.  648  (1820). 

City  Paper  Co.,  64  Ala.  330  (1879) ;  •  See  Mahon  v.  Crothers,  28  N.  J. 

Callanan  v.  Shaw,    19    Iowa,    183  Eq.  (1  Stew.)  567  (1877) ;  Cortleyeu 

(1865) ;    Treuton    Banking    Co.    v.  v.    Hathaway,    11    N.    J.    Eq.    (3 

Woodruff,  3  N.  J.  Eq.  (2  H.  W.  Slockt.)  39  (1855) ;    B.   C.   64  Am. 

(51) 


802  JUNIOR   MORTGAGEE    REDEEMING.  [§678. 

The  rule  that  a  receiver  will  not  be  appointed  against  a 
prior  mortgagee  in  possession  as  long  as  anything  remains 
unpaid  on  his  mortgage,  applies  equally  whether  the  priority 
is  original  or  has  been  acquired  subsequently  to  the  execu- 
tion of  the  mortgage  by  assignment ;'  but  it  applies  only  so 
long  as  some  part  of  the  debt  remains  unpaid  to  the  mort- 
gagee who  has  a  right  to  retain  the  possession.' 

This  rule,  that  a  receiver  will  not  be  appointed  against  a 
prior  legal  mortgagee  in  possession,  has  been  said  to  apply 
in  favor  of  persons  in  possession,  entitled  to  a  mortgage  and 
to  prior  charges  on  the  estate,  though  they  may  have 
applied  part  of  the  rents  in  payment  of  the  interest  on  those 
charges,  instead  of  discharging  the  principal  of  the  mort- 
gage, it  being  the  proper  course,  as  between  a  tenant  for 
life  and  the  owners  of  the  inheritance,  to  keep  down  such 
interest  out  of  the  rents,  and  not  to  treat  the  surplus  rents, 
after  the  payment  of  interest  on  the  unpaid  part  of  the  princi- 
pal, as  applicable  to  the  reduction  of  such  principal.* 

§  678.  Subsequent  mortgagee  redeeming  from  prior 
mortgagee  in  possession. — Where  a  prior  mortgagee  is 
in  possession,  a  subsequent  mortgagee,  to  gain  control  of  the 
rents,  must  redeem  from  the  first  mortgagee ;  and,  in  taking 
the  account,  the  first  mortgagee  will  not  be  allowed  any 
sums  which  he  may  have  paid  to  the  mortgagor  after  notice 
of  subsequent  incumbrances.*  If  the  mortgagee  in  posses- 
sion claims  that  anything  is  due  him,  the  court  v/ill  not  take 
the  possession  away  from  him  ;  and  so  long  as  anything 
remains  unpaid,  the  court  can  not  substitute  another  security 
for  that  for  which  the  mortgagee  contracted.*    The  only 


Dec.  478 ;  Trenton  Banking  Co.  v.  *  Codrington  v.   Parker,  16  Ves. 

Woodruff,  3  N.  J.  Eq.  (2  H.  W.  469  (1809). 

Gr.)  210  (1835) ;  Schreiber  v,  Carey,  »  Faulkner  v.  Daniel,  3  Hare,  204  n 

48  Wis.  218  (1879) ;  Hiles  v.  Moore,  (1843) ;  8.  c.  10  L.  J.  Ch.  N.  S.  33. 

15  Beav.  175  (1852) ;  Rowe  v.  Wood,  *  2  Spence  Eq.  Jur.  689. 

2  Jac.  &  W.  553  (1821).  »  Quinn  v.  Brittain,  3  Edw.  Ch. 

1  Berney  v.  Sewell,  1  Jac.  &  W.  (N.  Y.)  314  (1839);  Berney  v.  Sewell, 

648   (1820);    Hiles    v.    Moore,    15  IJac.  «&  W.  648,  649(1820);  Dalmer 

Beav.  181  (1852) ;  Bates  v.  Brothers,  v.  Dashwood,  2  Cox  Ch.  382,  383 

17  Jur.  1174  (1853) ;  s.  c.  2  Sm.  &  (1793) ;   Bryan  v.   Cormick,  1  Cox 

G.  509.  Ch.  422  (1788) ;  Phipps  v.  Bishop  of 


§  678.]  JUNIOE    MORTGAGEE   REDEEMnSTG.  803 

course  is  to  pay  him  off  according  to  his  own  statement  of 
the  debt,*  particularly  where  it  appears  that  the  mort- 
gaged premises  are  an  inadequate  security  for  the  balance 
due.' 

It  is  not  necessary  that  the  mortgagee  in  possession  be 
able  to  state  the  exact  amount  due  on  his  mortgage  ;  it 
will  be  sufficient  if  he  can  show  that  anything  at  all  is  due.' 
The  incomplete  state  of  his  accounts  will  furnish  no  valid 
excuse  on  the  part  of  the  mortgagee  in  possession  for  not 
making  a  definite  statement  regarding  the  amount  due  him  ; 
^f  he  keeps  his  accounts  in  such  shape  that  he  can  not  tell, 
and  that  no  one  else  can  ascertain  the  amount  due,  the  court 
will  assume  that  nothing  is  due  and  will  appoint  a  receiver.* 
Time  may  be  allowed  the  mortgagee  in  possession,  however, 
in  which  to  prepare  a  statement.* 

If  the  mortgagee  in  possession  alleges  in  his  answer  that 
some  part  of  the  debt  is  due  him,  the  court  may  determine 
the  truth  of  the  statement  upon  affidavits  against  the 
answer.'  The  statement  must  be  a  positive  and  distinct 
one  ;  a  vague  assertion  or  a  general  declaration  by  the  mort- 
gagee that  he  believes  that  when  the  accounts  are  stated, 
some  particular  sums  and  parts  of  other  sums  will  be  found 
due,  will  not  be  sufficient,  unless  it  is  supported  by  a  state- 
ment of  accounts  which  will  serve  to  test  the  truth  of  such 
assertion  or  declaration.*  If  the  mortgagee  can  not  state 
that  some  definite  amount  is  due  him,  the  court  will  appoint 
a  receiver.' 


Bath  and  Wells,  2  Dick.  608  (1783) ;  469  (1809);  Hiles  v.  Moore,  15  Beav. 

Chambers  v.  Goldwin,  cited  13  Ves.  180  (1852). 

878  (1807) ;  Quarrell  v.  Beckford,  13  »  Codrington  v.   Parker,  16  Ves. 

Ves.  378  (1807).  469  (1809). 

»  Bayard  v.  Fellows,  28  Barb.  (N.  «  Rowe  v.  Wood,  2  Jac.  &  W.  558 

Y.)  451  (1858)  ;  Berney  v.  Sewell,  1  (1821). 

Jac.   &  W.   648   (1820) ;    Rowe  v.  '  Hiles  v.   Moore,   15  Beav.    181 

Wood,  2  Jac.  &  W.  557  (1821).  (1852). 

'  Bayard  v.  Fellows,  28  Barb.  (N.  '  Chambers  v.  Goldwin,  cited  in 

Y.)  451  (1858).  13  Ves.  378  (1807);  Quarrell  v.  Beck- 

«  Chambers  v.  Goldwin.  cited  in  ford,  13  Ves.   378  (1807)  :  Rowe  v. 

13  Ves.  378  (1807);  Quarrell  v.  Beck-  Wood,  2  Jac.  &  W.  558  (1821). 
ford,  13  Ves.  378  (1807). 

*  Codrington  v.  Parker,  16  Ves. 


801  RECEIVER MORTGAGEE  IN  POSSESSION.       [§  G79. 

In  Rowe  v.  Wood/  a  motion  for  a  receiver  against  a  mort- 
gagee of  mines,  who  had  become  a  partner  by  purchasing 
shares  in  such  mines,  made  upon  the  ground  of  mismanage- 
ment, was  denied,  it  not  being  shown,  and  the  mortgagee 
not  admitting,  that  the  mortgage  was  paid.  It  was  also 
held  in  that  case,  that  the  rights  and  duties  of  a  person  in 
such  a  situation  were  not  to  be  governed  solely  by  principles 
applicable  to  a  party  who  stands  in  the  position  of  a  mort- 
gagee or  partner ;  and  that  if  a  mortgagee  can  in  any  case 
be  deprived  of  his  possession  on  the  ground  of  mismanage- 
ment, it  must  be  mismanagement  of  a  clear  and  specific 
nature. 

§  679.  Other  cases  for  receiver  where  mortgagee  in 
possession, — A  mortgagee  who  has  been  placed  in  posses- 
sion by  the  mortgagor,  by  virtue  either  of  a  clause  in  the 
mortgage  or  of  a  subsequent  agreement  or  consent,  which 
may  be  by  parol,  is  entitled  to  retain  possession  and  to  col- 
lect the  rents  and  profits  as  against  a  purchaser  at  a  sale 
under  an  execution  issued  on  a  judgment,  the  lien  of  which 
did  not  attach  until  after  the  mortgagee's  possession  had 
commenced.' 

But  possession  of  the  premises  obtained  by  a  mortgagee, 
through  arrangements  with  a  tenant  of  the  mortgagor, 
whose  lease  has  expired,  without  the  consent  of  such  mort- 
gagor, is  not  a  lawful  possession  and  will  not  be  a  bar  to  the 
appointment  of  a  receiver.*  And  the  rule  that  a  receiver 
will  not  be  appointed  against  a  mortgagee  holding  the  legal 
title,  who  is  in  the  actual  possession  of  the  mortgaged 
property,  does  not  apply  where  the  party  in  possession  holds 
the  property  under  an  execution  issued  upon  a  judgment.* 

In  order  to  deprive  an  equitable  mortgagee  of  the  right 
to  a  receiver,  the  possession  of  the  party  holding  the  property 
must  be  such  as  invests  him  with  a  right  to  receive  the  rents 
and  profits.  A  mere  possession  as  a  tenant  is  not  suffi- 
cient, and  an  incumbrancer  who  is  in  possession,  not  as  an 


•  2  .Jac.  &  W.  5.53  (1821).  «  Russell  v.  Ely,  67  U.  S.  (3  Black), 

"  Edwards  v.  Wray.  11  Biss.  C.C        575  (1862) ;  bk.  17  L.  ed.  258. 
251  (1882)  ;  s.  c.  12  Fed.  Rep.  42.  *  Kerr  on  Rec.  118. 


§  680J       EECEIVER MORTGAGEE  IN  POSSESSION.  805 

incumbrancer,  but  as  a  tenant,  can  not  set  up  his  possession 
as  such  tenant  against  the  appointment  of  a  receiver.' 

In  a  case  where  a  second  mortgagee,  who  had  sold  a  part 
of  his  mortgage  to  a  tenant  in  possession  of  the  premises, 
applied  for  a  receiver,  and  the  tenant  in  possession  objected, 
on  the  ground  that  the  rent  which  he  was  to  pay  was  just 
equal  to  the  interest  he  was  entitled  to  receive  on  his  share 
of  the  money  due  on  the  mortgage,  and  that  it  would, 
therefore,  merely  increase  his  expenses  by  paying  into  court 
as  rent  what  he  must  receive  back  as  interest,  the  court  held 
that  the  defendant  could  not  unite  his  two  characters  of 
mortgagee  and  tenant,  and  that  his  possession  as  tenant 
could  not  be  set  up  against  the  other  mortgagee.* 

§  680.  When  a  receiver  will  be  appointed  against  a 
mortgagee  in  possession. — As  has  been  seen,  a  receiver 
will  not  be  appointed  as  a  rule  against  a  mortgagee  in  pos- 
session so  long  as  anything  remains  due  to  him ;  yet,  where 
it  appears  that  he  is  irresponsible,  or  that  the  rents  and 
profits  will  be  lost,  or  are  in  danger  of  being  lost,  or  that  he 
is  committing  waste  upon  or  a  material  injury  to  the  prem- 
ises, an  exception  will  be  made  and  a  receiver  will  be 
appointed.*  A  receiver  will  also  be  appointed  in  all  instances 
where  2l  prima  facie  case  of  fraud  is  shown  to  the  satisfaction 
of  the  court,*  or  where  gross  mismanagement  of  the  estate  is 
made  to  appear ;  but  to  warrant  such  an  interference,  the 
mismanagement  must  be  of  a  clear  and  specific  nature.* 

Where  liens  upon  a  bankrupt's  estate  are  before  a  court 
for  adjustment,  a  receiver  will  be  appointed  on  the  appli- 
cation of  his  assignee,  although  the  bankrupt  may  have 
relinquished  possession  to  some  of  the  prior  incumbrancers.* 


>  Kerr  on  Rec.  44.  69  (1809) ;    Hugonin  v.  Basely,  13 

»  Archdeacon  v.  Bowes,  3  Anst.  Ves.  105  (1806). 

752(1794).  «  Corcoran  v.  Doll,   35  Cal.   476 

»  BoUes  V,  Duff,  35  How.  (N.  T.)  (1868) ;   Kipp    v.   Hanna,    2  Bland 

Pr.  481  (1867) ;  Williams  v.  Robin-  Ch.  (Md.)  26  (1820) ;    Hugonin   v. 

son,  16  Conn.  517  (1844) ;  Beverley  Basely,  13  Ves.  105  (1806) ;  Lloyd 

V.  Brooke,  4  Gratt.  (Va.)  209  (1847) ;  v.  Passingham,  16  Ves.  59  (1809). 

Meaden    v.   Sealey,   6   Hare,    620  ;  »  Rowe  v.  Wood,  2  Jac.  &  W.  553 

Codrington  v.   Park,   16  Ves.    409  (1821). 

(1809);  Lloyd  V.  Passingham,  16  Ves.  *  McLean  v.   Lafayette   Bank,  8 


806 


EECEIVER — MORTGAGEE  OUT  OF  POSSESSION.    [§681. 


§  68i.  Receiver  where  first  mortgagee  out  of  posses- 
sion.—If  it  appears  from  the  bill  that  there  is  a  prior 
morto-agee  who  is  not  in  possession  of  the  premises,  it  has 
been  held  that  the  court  may,  at  the  instance  of  subse- 
quent incumbrancers,  appoint  a  receiver  in  the  absence  of 
the  prior  mortgagee,  even  where  the  mortgagor  is  out 
of  the  jurisdiction  of  the  court;  but  such  an  appoint- 
ment will,  of  course,  be  made  without  prejudice  to  the 
right  of  the  first  mortgagee  to  take  possession  of  the  premises 
at  any  time  he  may  desire.' 

If  there  are  prior  outstanding  mortgages,  but  the  mort- 
gagees are  not  in  possession,  or  refuse  to  take  possession,  the 
court  may  appoint  a  receiver  of  the  mortgaged  premises  at 
the  instance  of  subsequent  mortgagees  or  judgment  creditors, 
without  prejudice  to  the  right  of  the  prior  mortgagees  to 


McL.  C.  C.  503  (1844) ;  s.  c.  2  West. 
L.  J.  441. 

'  Dalmer  v.  Dashwood,  2  Cox  Ch. 
378-383  (1793);  Bryan  v.  Cormick, 
1  Cox  Ch.  423  (1788) ;  Phipps  v. 
Bishop  of  Bath,  2  Dick.  608  (1783) ; 
Berney  v.  Sewell,  1  Jac.  &  W. 
647-649  (1820);  Tanfield  v.  Irvine,  2 
Russ.  151  (1826).  But  see  Holmes  v. 
Bell,  2  Beav.  298  (1840) ;  Browne  v. 
Blounte,  2  Russ.  &  M.  83  (1830) ; 
Anderson  v.  Stather,  2  Coll.  209 
(1845) ;  Rhodes  v.  ]|Hostyu,  17  .Jur. 
1007  (1853) ;  Coope  v.  Creswell,  12 
W.  R.299  (1864). 

In  Phipps  V.  Bishop  of  Bath  and 
Wells,  2  Dick.  608  (1783),  Lord 
Thurlow  refused  to  appoint  a 
receiver  at  the  instance  of  a  second 
mortgagee,  the  first  one  not  being  in 
possession ;  hut  in  Bryan  v.  Cor- 
mick, 1  Cox  Ch.  422  (1788),  he 
came  to  the  conclusion  that  a  subse- 
quent mortgagee  is  entitled  to  have 
a  receiver  when  the  first  mortgagee 
is  not  in  possession.  A  similar 
order  was  made  in  Dalmer  v.  Dash- 
wood,   2  Cox  Ch.    378  (1793).     In 


Langton  v.  Langton,  7  DeG.  M.  &  G. 
30  (1855),  a  receiver  was  appointed 
at  the  suit  of  a  junior  incumbrancer, 
the  first  legal  incumbrancer  not  be- 
ing entitled  to  take  possession, 
because  he  was,  by  the  terms  of  his 
security,  obliged  before  doing  so, 
to  give  three  months'  notice  after 
default  made  in  the  payment  of  the 
mortgage  money.  In  the  early  case 
of  Phipps  v.  Bishop  of  Bath  and 
AVells,  2  Dick.  608  (1783),  where 
the  first  mortgagee  was  not  in 
possession,  a  receiver  was  refused. 
Lord  Thurlow,  saying:  "A  second 
mortgagee,  the  mortgagor  living, 
can  not  have  a  receiver  without  the 
consent  of  the  first  mortgagee,  be- 
cause the  court  can  not  prevent  the 
first  mortgagee  from  bringing  an 
ejectment  against  the  receiver  as 
soon  as  he  is  appointed."  But  the 
later  cases,  given  above,  have  estab- 
lished the  rule  as  stated  in  the  text. 
See  also,  Corielyeu  v.  Hathaway,  11 
N.  J.  Eq.  (3  Stockt.)  39,  42  (1855) ; 
State  of  Maryland  v.  North  Cent. 
R.  R.  Co.,  18  Md.  193(1861). 


§  682.J  KECEIVBR  ON  APPLICATION  OV  MOETOAGEE.         807 

take  possession-  But  a  court  will  not  allow  »  pri-^^S^' 
incunfbrancer  to  object  to  the  appomtment  of  a  receiver 
except  by  the  assertion  of  his  legal  rights  and  by  takmg 
possession  of  the  premises  himself.' 

8  682     Receiver   appointed   upon  the  application   of 
junior  mortgagee.-The  appointment  of  a  '««-"  ^^  ^^ 
made   at  the   suit  of  a  junior  mortgagee,  or  other  legal 
incumbrancer,  tor  the  purpose  of  keeping  down  the  mterest 
even  though  the  applicant  may  be  unable,  at  the  t.me,  to 
enforce  the  usual  mortgagee's  remedies,  as  where  he  has  cove- 
nanted not  to  call  in  the  mortgage  debt  durmg  a  certam  t,me 
And  the  court  may,  in  a  suit  by  a  junior  mortgagee  appomt 
a  receiver,  although  the  first  mortgagee  may,  by  h.s  mort- 
gage, hav;  the  power  to  appoint  one.'    But  the  appomtment 
win  always  be  without  prejudice  to  the  nghts  of  every  pr.or 
mortgagee,  and  the  receiver  will  be  directed  by  the  order 
appofnting  him  to  keep  down  the  interest  upon  all  prior 

incumbrances.*  ...    , 

If  the  interest  is  in  arrears,  such  arrearage  w,l  be 
a  sufficient  cause  for  the  appointment  of  a  recover  at  the 
suit  of  a  junior  mortgagee  incumbrancer.'  But  where  as 
between  two  equitable  incumbrancers,  the  one  later  m  date 
has  acquired  the  legal  possession  of  the  premises,  the  court 
will  not  appoint  a  receiver  at  the  instance  of  the  one  who 

was  orior  in  date.'' 

It  is  said  to  be  a  well  established  rule  that  a  mortgagee 
obtains  a  specific  lien  upon  rents  and  profits  by  diligently 
securing  the  appointment  of  a  receiver,  and  a  second  or 
other  subsequent  mortgagee  may  thus  secure  an  advantage 

.  X,,     -1  TVT^oMrn   17  Tiir    1007  »  Cortleycu  v.  Hathaway,  11  N. 

Ch.  422  (KS8).  „  TT    «  •  Wbite    v.    Bishop    of    Pelers- 

nir^feo'aSvbk'  ull      W^gTsSwanst.  109  (1818);  Tan- 

'^4    SUV  r';.*S„p  of  Norwich,      ^^^^^■^"^"^■'^r'''TnZ- 
h,'    '  r,  12  n  .1816).  ^01  V.  Wilson,  2  Keen,  249    1836) 


3  Swanst.  112  n  (1816^  Worcester  and  Birn.ing- 

sBurjows  V.   Malloy.   2  Jac.   <B  J^^'^ca-"'^-  T.  R  fi  En.  437(1868). 

♦Boii'v.  ToUemaclie,   1  N.  R.  'Bat 

177  a862).  (^^^^^- 


808  EECEIVER MORTGAGEE  IN   POSSESSION.       [§683. 

over  the  first  mortgagee  as  to  the  rents  collected,*  even 
though  the  first  mortgagee  may  not  receive  from  the  fore- 
closure sale  a  sufificient  amount  to  discharge  his  mortgage 
debt.  But  this  rule  is  said  to  apply  only  to  those  cases 
where  the  first  mortgagee  is  not  a  party  to  the  suit.' 

§  683.  Receiver  when  junior  mortgagee  in  possession. 
— If  a  subsequent  incumbrancer  is  in  possession  of  the 
property  and  a  prior  legal  incumbrancer  can  not  recover 
possession  by  an  ejectment,  a  receiver  may  be  appointed.* 
Where  a  second  mortgagee  forecloses  and  buys  in  the 
premises  for  less  than  the  amount  of  his  mortgage  debt,  and 
takes  possession  as  purchaser,  and  the  premises  are  doubt- 
ful security  for  the  first  mortgage,  the  first  mortgagee  may, 
in  an  action  to  foreclose  his  mortgage,  have  a  receiver 
appointed,  who  will  be  required  to  account  to  such  purchaser 
for  any  balance  that  may  remain  after  satisfying  the  first 
mortgage." 

Where,  in  an  action  for  foreclosure,  a  junior  mortgagee 
was  appointed  receiver  with  power  to  keep  the  buildings 
insured  and  in  repair  and  "  to  pay  ground  rent  and  taxes," 
and  subsequently  a  prior  mortgagee  foreclosed  and  bought 
in  the  premises  for  less  than  his  claim,  the  receiver,  having 
paid  the  ground  rent  to  the  date  of  sale,  was  held  to  be 
entitled  to  appropriate  the  balance  in  his  hands  to  the 
discharge  of  his  mortgage,  and  could  not  be  required  to  pay 
the  taxes  from  the  fund.*  A  third  mortgagee,  who  advances 
money  to  buy  up  a  first  incumbrance,  can  not  retain  the 
property  as   against  a   second    mortgagee,    after   the    first 


'  Post  V.  Dorr,  4  Edw.  Ch.  (N 
T.)  412  (1844).  See  Warner  v.  Gouv 
emeur,  1  Barb.  (N.  Y.)  36  (1847) 
Washington  Life  Ins.  Co.  v.  Flei 
Bchauer,  10  Hun  (N.  Y.)  117  (1877) 
Astor  V.  Turner,  11  Paige  Ch.  (N 
T.)  436  (1845) ;  s.  c.  43  Am.  Dec 


Logansport  R.  Co.,  106  U.  S.  (16 
Otto),  286  (1882) ;  bk.  27  L.  ed.  117  ; 
8.  c.  1  Sup.  Ct.  Rep.  140 ;  High  on 
Rec.  g  688. 

'  Silver  v.  Bishop  of  Norwich,  3 
Swanst.  116,  n  (1816). 

*  New    York    Life    Ins.    Co, 


766;    Howell  v.   Ripley,   10  Paige  Glass,    50    How.    (N.  Y.)    Pr.    88 

Ch.  (N.  Y.)  43  (1843) ;    Thomas  v.  (1875). 

Brigstocke,  4  Russ.  64  (1827).  »  Ranney  v.  Peyser,  83  N.  Y.    1 

»  Howell  V.  Ripley,  10  Paige  Ch.  ( 1880  ),     reversing     20    Hun    ( N. 

(N.  Y.)  43  (1843);  Miltenberger  v.  Y.)  11. 


§§  684-685.]  APPOINTING    EECEIVER.  809 

mortgage  has  been  paid  off,  if  he  had  notice  of  the  existence 
of  such  second  mortgage.' 

§  684.  General  practice  in  appointing  receiver. — Where 
the  plaintiff  avers  that  the  security  for  the  mortgage  debt  is 
insufficient,  and  the  mortgagor  or  the  party  personally  liable 
for  the  payment  of  the  debt  is  insolvent,  the  mortgagee  will 
be  entitled  to  apply  for  a  receiver  of  the  rents  and  profits  of 
the  mortgaged  premises  at  any  time  during  the  progress  of 
the  cause,*  and  will,  even  before  the  hearing,*  be  entitled  to 
a  receiver  as  a  matter  of  right,  unless  the  party  in  possession, 
or  the  person  liable  for  the  payment  of  the  deficiency, 
gives  a  sufficient  undertaking  to  account  for  the  rents 
and  profits  in  case  of  a  deficiency.*  A  receiver  may  be 
appointed  even  after  a  voluntary  assignment  by  a  mort- 
gagor for  the  benefit  of  his  creditors.* 

While  a  receiver  may  be  appointed,  either  upon  the  appli- 
cation of  the  plaintiff,  or  upon  the  motion  of  the  court  in  a 
case  justifying  it,  yet  one  will  not  be  appointed  on  the 
application  of  a  mere  stranger  having  no  connection  with  or 
interest  in  the  subject  matter  of  the  litigation.* 

§  685.  Time  of  appointing  receiver. — A  court  of  chan- 
cery has  no  power  to  appoint  a  receiver  prior  to  the  filing 
of  a  bill  and  the  beginning  of  an  action,^  nor  without  notice 
to  the  parties  interested  in  the  property  to  be  delivered 


'  Hiles  ▼.  Moore,  15  Beav.  175, 181  (1847) ;  Sliotwell  v.  Smith,  3  Edw. 

(1852).  Ch.  (N.   Y.)  588  (1843) ;    Aster  ▼. 

» Lofsky  V.  Maujer,  3  Sandf.  Ch.  Turner,  11  Paige  Ch.  (N.  Y.)  436 

(N.  Y.)  69  (1845) ;  Hardy  v.  McClel-  (1845) ;  Howell  v.  Ripley,  10  Paige 

Ian,  53  Miss.  507  (1876) ;  Whitehead  Ch.  (K  Y.)  43  (1843) ;  Sea  Ins.  Co. 

V.    Wooten,    43   Miss.    533    (1870);  v.  Stebbins,  8  Paige  Ch.  (N.  Y.)  565 

Brown  v.  Chase,  Walk.  Ch.  (Mich.)  (1841);  Main  v.  Ginthert,  93  Ind.  180 

43  (1843).  (1883) ;  Myers  v.  Estell,  48  Miss.  373 

8  Brinfcman  v.  Ritzinger,  82  Ind.  (1878). 

864  (1883).     See  Frelinghuysen   v,  *  Upham  v.  Lewis,  1  Law  Bull.  86 

Colden,  4  Paige  Ch.   (N.   Y.)    204  (1879). 

(1833) ;  Caslin  v.  State,  44  Lid.  151  «  O'Mahoney  v.  Belmont,  62  N.Y. 

(1873).  133(1875).     See  Attorney-General  v. 

♦  Syracuse  Bank  v.   Tallman,  31  Day,  3  Madd.  246  (1817). 

Barb.(N.  Y.)  201  (1857).  See  Warner  '  Crowder  v.  Moone,  52  Ala.  220 

V.  Gouverneur,  1  Barb.  (N.  Y.)  36  (1875). 


810  TIME    OF   APPOINTING    RECEIVER.  [§686. 

into  the  receiver's  hands ;'  an  order  to  show  cause  why 
a  receiver  should  not  be  appointed,  served  before  the  action 
is  commenced,  is  irregular.'  It  has  long  been  held  that  a 
receiver  should  not  be  applied  for  prior  to  the  service  of 
the  summons,*  unless,  perhaps,  where  the  defendant  design- 
edly keeps  without  the  jurisdiction  of  the  court,  or  is  in 
hiding,  to  avoid  service  of  the  process,*  because  a  court 
has  no  jurisdiction  to  deprive  a  party,  who  is  not  present  to 
defend  himself,  of  the  possession  of  his  estate.*  A  receiver 
should  not  be  appointed  before  final  judgment,  merely 
because  of  a  concurrent  demand  by  two  or  more  parties  to 
the  action.* 

§  686.  Appointment  of  receiver  before  answer. — The 
general  rule  is,  that  a  receiver  will  not  be  appointed  before 
the  defendant  answers,  especially  if  one  is  not  asked  for  in  the 
complaint,  unless  it  clearly  appears  that  the  property  is  in 
danger  of  loss  or  injury  by  reason  of  the  insolvency  of  the 
party  having  possession  of  it,  or  from  other  causes.*  And 
where  a  receiver  is  appointed  before  the  answer  is  served,  he 
may  afterwards  be  discharged  on  the  defendant's  motion, 
if  the  complaint  and  answer  taken  together  show  that  a 
receiver  should  not  have  been  appointed.* 

It  was  formerly  held  not  to  be  proper  to  move  for  a 
receiver  upon  the  pleadings  and  afBdavits  in  the  action 
before  the  hearing  on  the  trial.*  The  present  doctrine,  how- 
ever, is  that  after  an  action  for  foreclosure  has  been  com- 
menced, the  plaintiff  may,  if  the  security  is  in  jeopardy, 
sequestrate  the  rents  or  emblements  or  both  through  the  aid 


Jones  V.   Schall,  45  Mich.  379  » Tanfield  v.  Irvine,  2  Russ.  151 

^881).  (1826). 

♦  KattensWoth  v.  Astor  Bank,  2  «  Dusenbury  v.  Dusenbury,  11 
imer  (N.  Y.)  632  (1853).  Daly  (N.  Y.)  112  (1882). 

'  Stratton  v.  Davidson,  1  Russ.  &  '  People  v.  Mayor  of  K   Y.,   8 

Myl.  484  (1830).  Abb.  (N.  Y.)  Pr.  7  (1858) ;  West  v. 

*  Quinn  v.  Gunn,  1  Hog.  75  (1816);  Swan,  3  Edw.  Ch.  (N.  Y.)  430  (1840). 
Malcolm  V.  Montgomery,  2  Molloy,  »  Phoenix  Mut.  Life  Ins.  Co.  v. 
600(1824) ;  Maguire  v.  Allen,  1  Ball  Grant,  3  McAr.  D.  C.  220  (1879). 

&  B.  75  (1809) ;  Coward  v.  Chad-  »  Lloyd  v.  Passingham,  3  Meriv. 

wick,  2  Russ.  150,  n.  (1825).     See  1  697  (1811). 
VanSant.  Eq.  Pr.  402. 


§687.]       APPOINTING   EECEIVEE   ATTEE   DECEEK  Sll 

of  a  receiver,  at  any  time  during  the  progress  of  the  action  ; 
but  that  the  receiver  is  not  entitled  to  recover  rents  collected 
nor  the  value  of  emblements  enjoyed  prior  to  the  date  of  his 
appointment.* 

To  authorize  the  appointment  of  a  receiver  before  the 
hearing,  the  complaint  must  contain  a  prayer  for  such 
appointment.'  A  receiver  will  be  appointed  after  a  hearing 
or  after  a  rehearing,  even  though  such  appointment  may 
have  been  once  refused,  upon  showing  a  new  state  of  facts 
such  as  to  justify  the  appointment.* 

§  687.  Appointment  of  receiver  after  granting  decree. 
— After  a  decree  of  foreclosure  has  been  granted,  the  court 
may  appoint  a  receiver,  although  not  asked  for  in  the  com- 
plaint,^ where  such  appointment  is  necessary  to  protect  the 
interests  of  the  mortgagee  ;*  the  fact  that  the  complaint 
does  not  state  facts  authorizing  the  appointment  of  a 
receiver,  constitutes  no  objection  to  an  application  well  sup- 
ported on  the  merits.* 

If  a  trustee,  appointed  by  a  final  decree,  refuses  the 
trust,  a  receiver  may  be  appointed  to  protect  the  interests 
of  all  the  parties  interested  in  the  estate.'  And  where  a 
receiver  has  been  properly  appointed  if\  a  suit  for  the  fore- 
closure of  a  mortgage,  it  will  be  no  error  to  continue  the 
receivership  after  the  final  decree  of  sale.' 

Although  a  mortgagor  may  be  entitled  to  hold  the  legal 
title  to  the  premises  until  the  foreclosure  sale,  yet  in  a  proper 


■  Hamilton  v.  Austin,  36  Hun  (N.  legal  title  until  the  foreclosure  sale, 

Y.)  138  (1885).  yet  in  a  proper  case,  when  necessary 

*  Cook  V.  Gwyn,  3  Atk.  689  (1748);  to  protect  the  mortgagee's  interests, 
Meredith  v.  Wyse,  1  Molloy,  2  equity  will  appoint  a  receiver  ;  this 
(1826).  may  be  done  by  an  order  in  the  fore- 

»  Attorney- General    v.    Mayor  of  closure  suit  after  judgment ;  and  the 

Galway,  1  Molloy,  95  (1828).  fact  that  the  complaint  does  not  state 

*  Cook  V.  Gwyn,  3  Atk.  689(1748);  facts  authorizing  the  appointment, 
Meredith  v.  Wyse,  1  Molloy,  2(1826).  is  no  objection  in  such  a  case." 

»  Haas  V.  Chicago  Building  Soc,  s  Schreiber  v.  Carey,  48  Wis.  208 

89111  498(1878);  Schreiber  v.  Carey,  (1880). 

48  Wis.  208  (1880).     In  Schreiber  v.  ">  Wilson    v.    Russ,  17    Fla.    691 

Carey,  supra,  the  court  say  :     "Al-  (1880). 

though,  by  the  laws  of  this  state,  *  Buchanan  v.  Berkshire  L.  Ins 

the  mortgagor  of  lands  holds  the  Co.,  96  Ind.  510  (1884). 


812  APPomnNG  receivee  after  8A.le.       [§688. 

case,  and  when  necessary  to  protect  the  mortgagee's  interests, 
equity  will  appoint  a  receiver ;  and  his  appointment  may 
be  made  by  an  order  in  the  foreclosure  even  after-judgment.* 
But  an  order  appointing  a  receiver  of  rents  and  profits  after 
a  final  decree  of  foreclosure  and  sale,  should  not  be  granted 
without  notice;  yet  if  a  party  voluntarily  appears  and  resists 
the  application  for  a  receiver,  notice  thereof  will  be  deemed 
to  have  been  waived.* 

§  688.  Appointment  of  receiver  after  sale. — Inasmuch 
as  the  necessity  for  the  appropriation  of  the  rents  and  profits 
to  the  payment  of  the  mortgage  debt  frequently  does  not 
appear  until  after  the  sale,  a  receiver  to  collect  them  may  be 
appointed  by  the  court  after  the  sale  upon  a  proper  showing 
of  the  facts  and  circumstances,*  or  where  it  clearly  appears 
that  the  rights  of  the  purchaser  have  been  impaired  or  are 
likely  to  be  impaired  by  the  possession  of  the  mortgagor. 
The  reason  for  this  would  seem  to  be  that  the  security  is  not 
exhausted  by  the  sale,  for  there  is  also  a  fund  included  in  it 
which  is  secondarily  liable, — the  rents  and  profits.  The 
power  of  appointing  a  receiver  after  a  sale,  however,  should 
be  exercised  only  in  extreme  cases  and  to  prevent  gross 
wrong  and-  injustice.* 

It  has  been  said  that  where  a  mortgagee  completes  his 
foreclosure  without  sequestrating  the  rents  and  profits,  he 
can  not  afterwards,  on  finding  the  property  insufficient 
security,  have  the  rents  and  profits  applied  to  the  payment 


'  Schreiber  v.  Carey,  48  Wis.  208  old  equity  rule  governing  this  sub- 

(1880).  ject  was  embodied  in  and  re-enacted 

•Haas  V.  Chicago  Building  Soc,  by  2   Ind.    Rev.    Stat.  (1876),   144, 

89  111.  498  (1878).  §  199,  chap.  6. 

«  Smith  V.  Tiffany,  13  Hun  (N.  *  Haas  v.  Chicago  Building  Soc, 

T.)  671  (1878) ;  Astor  v.  Turner.  11  89  111.   498    (1878).     See    Astor   v. 

Paige  Ch.  (N.  Y.)  436  (1845);  s.  c.  Turner,  11  Paige  Ch.  (N.  Y.)  436 

43  Am.  Dec.  766  ;  Haas  v.  Chicago  (1845) ;    s.   c.    43    Am.    Dec.   766 ; 

Building  Soc,  89  Dl.   498  (1878) ;  Smith  v.  Tiffany,  13  Hun  (N.  Y.) 

Connelly  v.  Dickson,  76  Ind.   440  671  (1878);    Adair  v.   Wright,   16 

(1881);  Adair  v.  Wright,  16  Iowa,  Iowa,  385(1864);  Schreiber  v.  Carey, 

885  (1864) ;  Schreiber  v.  Carey,  48  48   Wis.    208    (1880) ;    Thomas    v. 

Wis.  208  (1880) ;  Thomas  v.  Davies,  Davies,  11  Beav.  29  (1847). 
11  Beav.  29  (1847).    In  Indiana  the 


§§689-690.]    mTEEFERESra  WITH  KECER^ER.  813 

of  his  debt,  because  his  right  to  intercept  such  rents  and 
profits  ceases  with  the  completion  of  the  foreclosure  ;'  but 
the  better  doctrine  is  thought  to  be  that  a  receiver  may  be 
appointed  after  the  granting  of  a  decree  or  even  after  a  sale, 
where  such  appointment  is  necessary  to  protect  the  interests 
and  to  preserve  the  rights  of  the  parties  to  the  action. 

§  689.    Interference  with  receiver's  possession. — The 

possession  of  a  receiver  appointed  in  a  mortgage  foreclosure 
is  not  to  be  disturbed  without  leave  of  the  court  making  the 
appointment,*  and  all  claims  adverse  to  such  receiver  are 
to  be  determined  by  the  court  appointing  him.*  But, 
although  the  courts  will  prevent  any  disturbance  of  a  receiver 
in  possession  under  an  order  of  sequestration,  yet  they 
generally  refuse  to  interfere  as  against  the  legal  title.* 

The  court,  when  appealed  to,  will  examine  the  title  and 
discharge  the  receiver,  or  leave  the  party  claiming  the  posses- 
sion under  a  superior  legal  title,  to  enforce  his  rights' by  an 
action  at  law.* 

§  690.  Remedy  of  parties  claiming  title  paramount  to 
receiver. — Where  a  receiver  has  been  appointed  in  a  mort- 
gage foreclosure  and  a  party  claims  a  paramount  title  to  the 
estate,  the  remedy  of  the  receiver  is  to  apply  to  the  court  to 
direct  the  claimant  to  exhibit  interrogatories  in  order  that 
he  may  be  examined  pro  interesse  suo,^  as  to  his  title  to  the 
estate/ 


'  Foster  V.  Rhodes,  lOBankr.  Reg.  Peale  v.  Phipps,  55  U.  S.  (14  How.) 

623  (1871).  368,  374  (1852) ;  bk.  14  L.  ed.  459. 

»  Foster  v.  Townshend,  2  Abb.  (N.  *  Foster  v.  Townshend,  2  Abb.  (N. 

Y.)  N.  C.  29,  36  (1877).    See  Sea  T.)N.  C.  29,37(1877).  See  Tyson  v. 

Ins.   Co.    V.  Stebbins,  8  Paige  Ch.  Fairclough,  2  Sim.  &  S.  142  (1824) ; 

(N.  Y.)  565  (1841) ;  Angel  v.  Smith,  Jeremy  Eq.  Jur.  252. 

9  Ves.   336,  338  (1804) ;   Brooks  v.  »  Foster  v.  Townshend,  2  Abb.  (N. 

Greathed.    1   Jac.   &  W.    176,   178  Y.)K  C.  29,  37(1877).  See  Angel  v. 

(1820);  Pelhamv.  Dutchess  of  New-  v.  Smith,  9  Ves.    336,   338  (1804); 

castle,  3  Swanst.  289,  293,  n  (1819);  1  Dixon  v.  Smith,  1  Swanst.  457  (1818); 

Btory    Eq.   Jur.   (11th    ed.)    §33a;  Attorney-General  v.  Coventry,  1  P. 

Daniels  Ch.  Pr.  1579.  Wm.   306  (1715) ;    Empringham   v. 

«  O'Mahoney  v.  Belmont,   62  K  Short,  3  Hare,  461  (1844);  Gilb.  For. 

Y.  133,  149  (1875).  See  Milwaukee  &  Roman.  81  (1874). 

Bt.  P.   R.  R.   Co.  V.  Milwaukee  &  *  Though   it   was  formerly  ques- 

M.  R.  R.  Co.,  20  Wis.  165  (1865) ;  tioned  [see  Kaye  v.  Cunningham,  5 


814  EECEIVER   AGAINST    PARAilOUNT    TITLE.       [§0^1. 


Any  one  interfering  with  a  receiver  in  possession  without 
first  obtaining  leave  of  the  court  which  appointed  him,  must 
either  come  into  court  and  be  examined  pro  interesse  siio^ 
or  apply  to  the  court  for  leave  to  enforce  his  legal  rights  by 
bringing  an  action  in  ejectment ;'  in  either  case  the  appli- 
cation may  be  made  by  motion,*  or  on  petition  ;  a  petition 
is  probably  the  most  convenient  practice.* 

§  691.     Appeal  —  Continuance    of    receivership.  —  In 

McMahon  v.  Allen,'  an  order  directing  the  continuance  of  a 
receivership  during  the  pendency  of  an  appeal,  which  was  to 
be  taken  from  the  final  decree,  was  held  to  continue  the 
receiver's  authority  not  only  during  th^  appeal  to  the  general 
term,  but  also  during  an  appeal  to  the  court  of  appeals. 
In  Rider  v.  Bagley,"  it  was  held  that  where  fraud  or  con- 
tempt upon  the  supreme  court  is  charged  upon  the  owner,  for 


Madd.  406  (1820)],  it  now  appears 
to  be  settled,  that  the  party  for 
whose  benefit  the  receivership  was 
had,  may  require  the  party  daiming 
an  adverse  right  or  title,  to  come  in 
and  show  cause  why  he  should  not 
be  examined  fro  interesse  suo. 
Foster  v.  Townshend,  2  Abb.  (N. 
Y.)  N.  C.  29,  37(1877).  See  Johnesv. 
Claughton,  Jac.  573  (1823) ;  Brooks 
V.  Grcathed,  1  Jac.  &  W.  573 
(1820) ;  Hamlyn  v.  Lee,  1  Dick.  94 
a743). 

'  Wiswall  V.  Sampson,  55  U.  S. 
(14  How.)  52,  65  (1852) ;  bk.  14  L. 
ed.  322 ;  3  Dan.  Ch.  Pr.  1984. 

'  Wiswall  V.  Sampson,  55  U.  S. 
(14  How.)  52,  65  (1852);  bk.  14  L.  ed. 
322.  Regarding  the  practice  in 
such  cases,  see  Hamlyn  v.  Lee,  1 
Dick.  94  (1743) ;  Gomme  v.  West,  2 
Dick.  472  (1772) ;  Hunt  v.  Priest, 
2  Dick.  540  (1778);  Anon.,  6  Ves. 
287  (1801). 

'^  Green  v.  Winter,  1  Johns.  Ch. 
(N.  Y.)  60  (1814) ;  s.  c.  7  Am.  Dec. 
475 ;  Bryan  v.  Cormick,  1  Cox 
Ch.  422  (1788) ;  Angel  v.   Smith,  9 


Ves.  835  (1834) ;  2  Spence  Eq.  Jur. 
647. 

'  Brooks  V.  Greathed,  1  Jac.  &  W. 
179,  note,  (1820);  Dickinson  v. 
Smith,  4  Madd.  177  (1813) ;  Walker 
V.  Bell,  2  Madd.  21  (1816);  Dixon  v. 
Smith,  1  Swanst.  457  (1818). 

*  Brooks  V.  Greathed,  1  Jac.  & 
W.  178  (1820) ;  2  Spence  Eq.  Jur. 
699.  Where  it  is  made  to  appear 
to  the  satisfaction  of  the  court 
that  the  claimant  has  a  superior 
right  or  title  to  the  sequestration, 
the  receiver  will  be  discharged  as  to 
him.  Foster  v.  Townshend,  2  Abb. 
(N.  Y.)  N.  C.  29,  36  (1877);  Attor- 
ney-General V.  Coventry,  1  P.  Wm. 
306,  309,  note,  (1715) ;  Wharam  v. 
Broughton,  1  Ves.  Sr.  181  (1748) ;  3 
Dan.  Ch.  Pr.  12G9,  1270,  1271,  and 
such  orders  will  be  made  as  the 
rights  of  all  the  parties  in  interest 
may  require.  Field  v.  Jones,  11  Ga. 
413  (1852) ;  Angel  v.  Smith,  9  Ves. 
335,  338  (1804) ;  2  Story  Eq.  Jur. 
(11th  ed.)  §§  833,  891. 

» 14  Abb.  (N.  Y.)  Pr.  220  (1862). 

e  84  N.  Y.  461  (1881). 


§692.]  APPEAL — AccouNTme.  815 

collecting  rents  with  a  knowledge  of  the  pendency  of  an 
application  for  a  receiver,  it  is  for  the  court  to  deal  with  the 
charge,  and  its  action  in  the  matter  will  not  be  subject  to 
review  on  appeal.  Assuming  that  the  court  has  power  to  com- 
pel such  owner  to  pay  the  rents  to  the  receiver  after  his 
appointment,  it  seems  that  the  exercise  of  such  power  is  in 
the  discretion  of  the  court,  and  consequently  not  reviewable.* 

§692.  Accounting  of  receivers.— While  a  receiver  is 
at  all  times  liable  for  an  accounting,  he  can  be  called  upon  for 
an  accounting  only  by  the  court  which  appointed  him  ;'  and 
an  order  directing  him  to  deliver  the  property  to  another 
court  will  not  relieve  him  from  the  control  of  the  appointing 
court  and  its  power  to  compel  him  to  settle.*  The  accounting 
of  a  receiver  is  to  be  made  to  the  court  only  ;  he  can  not  be 
compelled  to  show  his  books  to  a  party  to  the  suit.*  A 
report  upon  a  receiver's  account  can  not  be  excepted  to  and 
need  not  be  confirmed  ;*  and  where  there  is  no  claim  of 
fraud  or  bad  faith  with  reference  to  the  accounts  of  a 
receiver,  he  can  not  be  compelled  to  pay  the  costs  of 
a  reference  to  settle  the  same.* 

A  mortgagee  who  has  purchased  the  mortgaged  premises 
at  a  foreclosure  sale,  not  being  entitled  to  any  of  the  rents 
and  profits  which  accrued  prior  to  the  time  of  his  purchase, 
can  not  require  a  receiver  to  account  therefor  until  they 
have  been  collected.^  If  there  are  two  or  more  mortgagees, 
and  a  receiver  is  appointed  for  the  benefit  of  all  the  parties  to 
the  action,  the  fund  collected  by  the  receiver  will  be  subject 
to  whatever  disposition  may  appear  to  the  court  to  be  most 
equitable  under  the  circumstances  of  the  case.* 

But  it  has  been  held  that  where,  in  an  action  brought  to 
foreclose  a  mortgage,  a  subsequent  incumbrancer  who  is  made 


» Rider  v.  Bagley,  84  N.  Y.  461  *  Brower  v.  Brower.  2  Edw.  Ch. 

(1881).  (N.  y.)  621  (1836). 

•  Conkling  v.  Butler,  4  Biss.  C.  C.  *  Radford  v.   Folsom,   65    Iowa, 
23  (1865).  276  (1880). 

»  Mabry  v.  Harrison,  44  Tex.  286  ■"  Pendola  v.  Alexanderson,  67  Cal. 

(1875).  337  (1885). 

*  Musgroove  v.  Nash,  3  Edw.  Ch.  *  Keogh  v.  McManus,  34  Hun  (N. 
(N.  T.)  172  (1837).  T.)  531  (1885).      In    this  case  an 


816  ACCOUNTma  by  eeceiver.  [§  692. 

a  party  defendant  thereto,  appeals  in  his  own  behalf  and 
secures  the  appointment  of  a  receiver  of  the  rents  and 
profits  of  the  mortgaged  premises,  he  will  be  entitled  to 
retain  the  amount  collected  by  the  receiver  as  against 
the  claim  of  a  prior  mortgagee  whose  debt,  the  amount 
realized  upon  the  sale  of  the  mortgaged  property  under  the 
judgment  entered  in  the  action,  has  been  insufficient  to 
satisfy,'  because  a  junior  incumbrancer  can  not  be  divested 
of  his  right  to  the  rents  and  profits  in  favor  of  the  party 
holding  the  first  mortgage,  until  such  party  procures  the 
appointment  of  a  receiver  to  collect  them  for  his  benefit  and 
to  subordinate  them  to  his  own  superior  rights.' 

In  the  case  of  Post  v.  Dorr,*  it  was  held  "  to  be  an  estab- 
lished rule,  that  a  second  or  third  mortgagee  who  succeeds  in 
getting  a  receiver  appointed,  becomes  thereby  entitled  to  the 
rents  collected  during  the  appointment,  although  a  prior 
mortgagee  steps  in  and  obtains  a  receivership  in  his  behalf 
and  fails  to  obtain  enough  out  of  the  property  to  pay  his 
debt.  This  is  on  the  principle  that  a  mortgagee  acquires  a 
specific  lien  upon  the  rents  by  the  appointment  of  a  receiver 
of  them ;  and  if  he  be  a  second  or  third  incumbrancer,  the 
court  will  give  him  the  benefit  of  his  superior  diligence  over 
his  senior,  in  respect  to  the  rents  which  accrued  during  the 
time  that  the  elder  mortgagee  took  no  measure  to  have 
the  receivership  extended  to  his  suit  and  for  his  benefit." 


action  was  brought  by  the  plaintiff  to  pay  the  sum  remaining  due.  The 

to  foreclose  a  mortgage  given  by  the  court  directed  that  the  amoimt  due 

defendants  McManus  and  his  wife,  should  be  paid    to    the   holder  of 

and  a  receiver  of  the  rents,  issues  and  the  second  mortgage,  and  the  bal- 

profltsof  the  premises  was  appointed,  ance  to  the  mortgagor. 

Upon  the  sale  a  sufficient  amount  '  Washington    Life    Ins.   Co.    v. 

was  realized  to  discharge  the  amount  Fleischauer,   10  Hun  (N.   Y.)  117 

Ctue  to  the  plaintiff,  together  with  (1877). 

the  costs,  and  to  leave  a  surplus,  *  See  Washington  Life  Ins.  Co.  v. 

which  was  applied  upon  a  second  Fleischauer,   10  Hun  (N.   Y.)  117 

mortgage  given  by  the  said  McMan-  (1877) ;  Howell  v.  Ripley,  10  Paige 

us,   and  which,   when  so  applied,  Ch.  (N.  Y.)  43  (1843). 

still  left  an  amount  unpaid  thereon.  '  4  Edw.   Ch.   (N.   Y.)  413,   414 

There  was  a  balance  of  rents  col-  (1844). 

lected  and  in  the  hands  of  the  receiver 

amounting    to   more    than  enough 


§693.]  COMPENSATION    OF   EECEIVER.  817 

§  693.  Compensation  of  receivers. — The  compensation 
of  a  receiver  should  be  such  as  would  be  reasonable  for  the 
services  rendered  by  a  person  competent  to  perform  the  duties 
of  the  office,  rather  than  any  fixed  commission.'  What  is  a 
reasonable  and  proper  compensation  for  a  receiver  is  to  be 
determined  by  proof  of  the  facts,  and  not  by  the  opinions  of 
witnesses.  Five  per  centum  on  the  amount  received  and 
disbursed  seems  to  be  the  customary  allowance.*  In  New 
York  a  receiver  is  entitled  to  receive  commissions  at  the  rate 
prescribed  by  statute'  for  receiving  and  paying  out  moneys, 
viz.,  one-half  of  the  specified  rate  for  receiving  and  one-half 
for  disbursing.* 

But  where  a  court  appoints  a  receiver  in  an  action 
pending  therein,  it  may  determine  the  rate  of  his  compen- 
sation independent  of  the  statute  and  with  reference  to  the 
peculiar  circumstances  of  the  case.'  A  receiver  is  entitled 
to  be  paid  his  commissions  out  of  funds  in  his  hands,'  or  to 
have  them  taxed  as  costs,'  without  regard  to  the  result  of 
the  litigation.* 

The  expenses  reasonably  incurred  by  a  receiver  in  the  dis- 
charge of  his  trust  are  a  lien  upon  the  trust  property  prior  to 
that  of  the  bond  holders  or  mortgagees.'  Among  the 
expenses  which  should  be  allowed  to  a  receiver  are  reason- 
able fees  for  counsel  employed  by  him  in  the  proper 
discharge  of  his  trust,"  the  costs  of  litigation  and  the  expenses 


'  See  Jones  v.  Keen,  115  Mass.  170  '  Hutchinson  v.  Hampton,  1  Mon. 

(1874).  T.  39  (1868). 

*  Stretch  v.  Gowdey,  3  Tenn.  Ch.  *  Hopfensack  v.  Hopfensack,  61 
565  (1877).  How.  (N.  Y.)  Pr.  498  (1880). 

3  N.  Y.  Code  Civ.  Proc.  §  8320,  » McLane  v.  Placerville  &  S.  V. 
fixes  the  maximum  rate  at  five  per  R.  Co.,  66  Cal.  606  (1885). 
centum.  '"  United  States  Trust  Co.  v.  New 

4  Howes  V.  Davis,  4  Abb.  (N.  Y.)  York,  W.  S.  &  B.  R.  Co.,  101  N. 
Pr.  71  (1856).  Y.  478  (1886) ;   McLane  v.  Placer- 

*  Gardiner  v.  Tyler,  4  Abb.  (N.  ville  &  S.  V.  R.  Co.,  66  Cal.  606 
Y.)  Pr.  N.  S.  463  (1867) ;  s.  c.  3  (1885).  As  to  when  a  receiver  will 
Keyes  (N.  Y.)  505  ;  3  Trans.  App.  not  be  allowed  to  charge  against  the 
161,  fund,  fees  paid  to  counsel,  see  Ran- 

*  Hopfensack  v.  Hopfensack,  61  ney  v.  Peyser,  20  Hun  (N.  Y.)  11 
How.  (N. Y.)  Pr.  498  (1880);  Radford  (1880). 

V.  Folsom,  55  Iowa,  276  (1880). 


818  REMOVING   RECEIVER.  [§§  694-695. 

incurred  in  taking  care  of,  protecting  and  repairing  the 
property  in  his  charge.'  In  New  York,  the  allowance  of 
commissions  and  expenses  to  such  a  receiver  is  governed  by 
the  provisions  of  the  Code  of  Civil  Procedure.' 

§  694.  Removal  of  receivers. — A  receiver  appointed  in 
a  mortgage  foreclosure  may  be  removed  for  misconduct  by 
the  court  appointing  him  on  the  application  of  any  party 
interested  ;*  but  where  such  receiver  has  been  appointed  by 
a  court  having  jurisdiction  of  the  case,  no  other  court  of  co- 
ordinate jurisdiction  can  remove  him.*  A  receiver  should 
not  be  removed  without  notice  to  the  plaintiff  in  the  action, 
or  to  the  person  at  whose  instance  he  was  appointed.' 
Nor  should  he  be  removed  without  notice,  also,  to  all 
persons  who  have  appeared  in  the  action.* 

While  under  the  provisions  of  the  New  York  statute,'  a 
court  of  one  judicial  district  has  power  to  remove  a  receiver 
appointed  in  an  action  pending  in  another  judicial  district, 
it  has  no  power  to  appoint  his  successor.  For  that  purpose 
the  proceedings  must  be  remitted  to  the  district  in  which  the 
action  is  pending.* 

§  695.  Discharge  of  receivers. — The  appointment  of  a 
receiver  in  an  action  to  foreclose  a  mortgage  will  continue 


»  McLane  v.  Placerville  &  S.  V.  Bank,  &c.,   Co.,   35   La.    An.    196 

R.  Co.,  66  Cal.  606  (1885).  (1883). 

«  N.  Y.  Code  Civ.  Proc.  §  3320  ;  *  Young  v.  Montgomery  &  E.  R. 

United    States    Trust     Co.    v.    N.  R.  Co.,  3  Woods  C.  C.  606  (1875). 

Y.,  W.   S.  &  B.   R.   Co.,  101  N.  See  Kennedy  v.  Indianapolis,  C.  & 

Y.  478  (1886).     The  Act  of  1883,  L.  R.  R.  Co.,  3  Flipp.  C.  C.  704 

chap.  378,  relates   to   receivers    of  (1880)  ;   s.  c.  3  Fed.  Rep.  97  ;   11 

corporations  appointed  in  proceed-  Cent.  L.  J.  89 ;  26  Int.  Rev.  Rec. 

ings    in    bankruptcy ;    a    receiver  30,  90 ;    10  Rep.    359 ;    Bruce  v. 

appointed  in  an  action  to  foreclose  a  Manchester  &  K.  R.  R.  Co. ,  19  Fed. 

mortgage  executed  by  a  corporation.  Rep.  342  (1884). 

is  not  entitled  to  the  fees  specified  iu  *  Attrill  v.  Rockaway  Beach  Imp. 

said  section.  Co.,  25  Hun  (N.  Y.)  376  (1881). 

3  1  VanSant.  Eq.  Pr.  382.     If  the  « See  Attrill  v.  Rockaway  Beach 

person  who  is  appointed  receiver.  Imp.  Co.,  25  Hun  (N.  Y.)  509  (1881). 

absents  himself  and  fails  to  file  the  '  Laws  1880,  chap.  537. 

bond  ordered,  the  court  may,  in  its  *  Attrill  v.  Rockaway  Beach  Imp. 

discretion,  remove  him  and  appoint  Co.,  25  Hun  (N.  Y.)  376  (1881). 
another.     In  re  Louisiana  Savings 


§  695.]  DISCHARGING    RECEIVEK.  819 

during  the  pendency  of  the  action,  unless  otherwise  directed 
in  the  order  appointing  him.'  Where  his  duties  have  not 
all  been  performed,  a  receiver  should  not  be  discharged 
on  his  own  application  unless  he  shows  good  cause  therefor, 
especially  if  his  discharge  might  affect  other  parties  to  the 
action.  His  mere  desire  to  be  discharged,  though  coupled 
with  a  statement  of  the  complication  of  his  accounts  and  the 
necessity  of  losing  much  time  in  the  business  of  his  receiver- 
ship, is  not  sufificient."  And  where  the  protection  of  the  rights 
of  a  defendant  requires  the  continuance  of  a  receiver,  the  court 
will  not  grant  a  discharge,  although  the  suit  may  be  at  an 
end ;  but  it  will  require  the  defendant  thus  protected  to 
file  a  bill  forthwith  to  settle  his  rights.* 

A  receiver  should  not  be  discharged  without  notice  to  all 
interested  parties,  but  the  discharge  of  a  receiver  without 
notice  is  not  necessarily  such  an  irregularity  as  to  justify  a 
reversal  of  the  order.*  The  payment  of  the  mortgage  debt 
by  the  mortgagor,  after  the  appointment  of  a  receiver, 
does  not,  ipso  facto,  discharge  the  receiver.  The  receiver  may 
have  a  claim  for  expenses  incurred  in  the  exercise  of  his 
duties  which  should  be  paid  before  the  property  held  by 
him  is  taken  from  his  possession.* 


»  Weems  v.  Lathrop,  43  Tex.  207  497  (1827) ;    Largan  v.   Eowen,   1 

(1875).  Sell.  &  Lef.  296  (1803). 

*  Beers  v.  Chelsea  Bank,  4  Edw.  ''  Coburn   v.   Ames,   57  Cal.   201 
Ch.  (N.  Y.)  277  (1843).  (1881) ;  s.  c.  28  Am.  Dec.  634. 

*  Whiteside    v.    Prendergast,    2  '  Crook  v.  Findley,  60  How.  (N. 
Barb.  Ch,  (N.  Y.)  471  (1847).     See  Y.)  Pr.  375  (1880). 

Murrough   v.    French,    2    Molloy, 


CHAPTER   XXXII. 


PROCEEDINGS  ON  SURPLUS  MONEYS. 

PAYING   SURPLUS   INTO    COURT-CHARACTER   OF   SURPLUS,  REALTY 
OR   PERSONALTY-ADJUSTING    CLAIMS    AND    EQUITIES- 
QUESTIONS  OF  PRIORITY-LIENS  ON  SURPLUS— 
DOWER-MECHANICS'  LIENS. 


696.  Introductory. 

697.  Rules  of  court. 

698.  Provisions  of  Code. 

699.  Object  of    the    statute    and 

court  rule. 

700.  Payment    of     surplus    into 

court. 

701.  When  surplus  not  paid  into 

court. 
703.  When  surplus  paid  into  sur- 
rogate's court. 

703.  Paying  surplus  into  court  on 

foreclosure    by     advertise- 
ment. 

704.  Character   of    surplus— Per- 

sonal or  real  properly. 

705.  Surplus    personalty,    where 

land    so    converted    under 
will. 

706.  Massachusetts  doctrine. 

707.  Character  of  surplus  belong- 

ing to  infant, 

708.  Who  entitled  to   apply  for 

surplus. 

709.  Protecting    claims    to    sur- 

plus. 

710.  Adjusting  equities. 

711.  Liens  to  be  paid  in  order  of 

priority  in  time. 
713.  Questions  of  priority — How 
determined. 

713.  Claims    must    be    liens    on 

mortgaged  premises. 

714.  Equitable        distribution  — 

Claims  liens  on  two  funds. 

715.  Distribution    of    surplus  — 

Mortgagor  deceased. 

716.  Interest  of  life-tenant  in  sur- 

plus. 


§  717. 
718. 
719. 
720. 
721. 
723. 
723. 

724. 

725. 

726. 

727. 

728. 

729. 

780. 

731. 
733. 

733. 

734. 
735. 
736. 


Rights  of  prior  incumbran- 
cers not  parties. 

Liens  attaching  pendente 
lite. 

Equitable  priorities  between 
subsequent  mortgagees. 

Burden  of  proof  in  showing 
priorities. 

Rights  of  equal  mortgagees 
— Senior  mortgagees. 

Several  mortgages  security 
for  same  debt. 

Priority  of  unrecorded  mort- 
gage over  subsequent  judg- 
ment. 

Second  mortgage  and  junior 
judgments. 

Preference  of  mortgage  over 
mechanic's  lien. 

Lien  of  judgment  on  sur- 
plus. 

What  interests  bound  by  lien 
of  judgment. 

Satisfying   judgments   from 

surplus. 
Specific  lien  of  judgment  and 

executory  contract. 
Judgment  by  confession  83 

an  indemnity. 
Judgment  against  sheriff. 
Judgment  confessed  by  one 

member  of  a  firm. 
Married  woman's   equitable 

right  to  surplus. 
Dower  in  surplus  moneys. 
Inchoate  right  of  dower. 
Investment  of  dower  in  sur- 
plus —  Payment   of   gross 

sum. 


820 


§  696.] 


DISTRIBUTING    SURPLUS    MONEYS. 


821 


737.  Homestead  right  in  surplus. 

738.  Where  claim    of    collateral 

assignee  less  than  mortgage. 

739.  Purchase  of  part  of  premises 

by  mortgagee. 

740.  Interest  of  lessee  for  years  in 

surplus. 


741.  Mechanic's  lien. 

742.  Rights  of  cestuis  que  trust  in 

surplus. 

743.  Lien  for  attorney's  fees  on 

surplus. 

744.  Disposition  of  surplus  mon- 

eys not  applied  for. 


§  696.  Introductory. — Surplus  moneys  in  mortgage  fore- 
closures are  such  moneys  as  remain  undistributed,  after  the 
referee  to  sell  has  paid  from  the  proceeds  of  the  sale  the  costs 
of  the  suit,  the  expenses  of  the  sale,  the  amount  due  for  taxes 
and  assessments,  and  the  sum  or  sums  found  to  be  due  on 
the  complaint,  or  the  complaint  and  the  cross-bills.  Thus, 
if  the  holder  of  a  note  secured  by  a  mortgage  or  a  deed  of 
trust  receives  more  than  enough  to  pay  his  debt  and  the 
costs  on  the  sale  under  foreclosure,  the  amount  in  excess 
will  be  surplus,  for  which  he  will  be  legally  liable  as  for  any 
other  debt.* 

The  disposition  of  the  proceeds  of  the  sale  of  the  mort- 
gaged premises  on  foreclosure,  in  paying  the  plaintiff  and 
prior  lienors  or  creditors,  must  be  made  as  directed  in  the 
judgment.  The  referee  or  other  officer  making  the  sale  is 
generally  directed  to  retain  from  the  proceeds  of  such  sale  a 
sum  sufficient  to  pay  his  fees  and  commissions,"  together 
with  the  expenses  of  the  sale,  including  the  sums  paid,  if 
any,  for  taxes,  assessments  and  water  rates,  or  to  be  paid  to 
redeem  the  property  from  a  sale  or  sales  made  thereunder,' 
and  to  pay  to  the  plaintiff  or  his  attorney  the  amount  of  his 
debt,  interest  and  costs ;  and,  if  any  surplus  remains  from 
the  proceeds  of  the  sale  after  making  such  payments,  to  pay 
it  into  court  for  the  benefit  of  the  persons  entitled  thereto.* 


1  Laughlin  v.   Heer,  89  111.   119      v.  Winn,  56  How.  (N.  Y.)  Pr.  368 


(1878). 

« N.  Y.  Code  Civ.  Proc.  §§  3297, 
8307. 

«  Cornell  v.  Woodruff,  77  N.  Y. 
203  (1879) ;  Catlin  v.  Grissler,  57  N. 
Y.  363  (1874) ;  Easton  v.  Pickersgill, 
65  N.  Y.  310  (1873) ;  Williams  v. 
Townsend,  31  N.  Y.  411,  414 
(1865) ;  Poughkeepsie  Savings  Bank 


(1878);  N.  Y.  Code  Civ.  Proc.  g  1676. 
*  Beekman  v.  Gibbs,  8  Paige  Ch. 
(N.  Y.)  511  (1840).  See  DeForest 
V.  Farley,  62  N.  Y.  628  (1875); 
Livingston  V.  Mildrum,  19  N.  Y.  440 
(1859);  N.  Y.  Code  Civ.  Proc. 
§  1633  ;  Clark  v.  Carnall,  18  Ark. 
209  (1856). 


;522  RULES   AFFECTING   SURPLUS,  [§697. 

§  697.  Rules  of  court. — The  rules  of  the  supreme  court 
in  New  York  provide  that  "all  surplus  moneys  arising  from 
the  sale  of  mortgaged  premises,  under  any  judgment,  shall 
be  paid  by  the  sheriff  or  referee  making  the  sale,  within  five 
days  after  the  same  shall  be  received  and  be  ascertainable, 
in  the  city  of  New  York  to  the  chamberlain  of  the  said  city, 
and  in  other  counties  to  the  treasurer  thereof,  unless  other- 
wise specially  directed,  subject  to  the  further  order  of  the 
court,  and  every  judgment  in  foreclosure  shall  contain  such 
directions,  except  where  other  provisions  are  specially 
made  by  the  court.'" 

The  rules  also  provide  that  "  on  filing  the  report  of 
the  sale,  any  party  to  the  suit,  or  any  other  person  who 
had  a  lien  on  the  mortgaged  premises  at  the  time  of  the 
sale,  upon  filing  with  the  clerk  where  the  report  of  sale  is 
filed  a  notice,  stating  that  he  is  entitled  to  such  surplus 
moneys  or  some  part  thereof,  and  the  nature  and  extent  of 
his  claim,  may  have  an  order  of  reference,  to  ascertain  and 
report  the  amount  due  to  him,  or  to  any  other  person,  which 
is  a  lien  upon  such  surplus  moneys,  and  to  ascertain  the  prior- 
ities of  the  several  liens  thereon ;  to  the  end  that,  on  the 
coming  in  and  confirmation  of  the  report  on  such  reference, 
such  further  order  may  be  made  for  the  distribution  of  the 
surplus  moneys  as  may  be  just.  The  referee  shall,  in  all 
cases,  be  selected  by  the  court.  The  owner  of  the  equity 
of  redemption,  and  every  party  who  appeared  in  the  cause,  or 
who  shall  have  filed  such  notice  with  the  clerk,  previous  to 
the  entry  of  the  order  of  reference,  shall  be  entitled  to  ser- 
vice of  a  notice  of  the  application  for  the  reference  and  to 
attend  on  such  reference,  and  to  the  usual  notices  of 
subsequent  proceedings  relative  to  such  surplus."* 

"  But  if  such  claimant  or  such  owner  has  not  appeared,  or 
made  his  claim  by  an  attorney  of  this  court,  the  notice  may 
be  served  by  putting  the  same  into  the  post-ofifice,  directed 
to  the  claimant  at  his  place  of  residence,  as  stated  in  the 
notice  of  his  claim,  and  upon  the  owner  in  such  manner  as 
the  court  may  direct.     All  official  searches  for  conveyances 


N.  Y.   Supreme  Court  Rule  61.  «  N.  Y.  Supreme  Court  Rule  64. 


§  698.]    PROVISIONS  OF  CODE  AFFECTING  SUllPLUS.  823 

or  incumbrances,  made  in  the  progress  of  the  cause,  shall 
be  filed  with  the  judgment-roll,  and  notice  of  the  hearing 
shall  be  given  to  any  person  having,  or  appearing  to  have,  an 
unsatisfied  lien  on  the  moneys  in  such  manner  as  the  court 
shall  direct ;  and  the  party  moving  for  the  reference  shall 
show,  by  affidavit,  what  unsatisfied  liens  appear  by  such 
official  searches,  and  whether  any,  and  what  other  unsatisfied 
liens  are  known  to  him  to  exist."* 

§698.  Provisions  of  Code. —  The  New  York  Code  of 
Civil  Procedure'  provides  that,  "if  there  is  any  surplus  of  the 
proceeds  of  the  sale,  after  paying  the  expenses  of  the  sale, 
and  satisfying  the  mortgage  debt  and  the  costs  of  the  action, 
it  must  be  paid  into  court,  for  the  use  of  the  person  or 
persons  entitled  thereto.  If  any  part  of  the  surplus  remains 
in  court  for  the  period  of  three  months,  the  court  must,  if 
no  application  has  been  made  therefor,  and  may,  if  an  appli- 
cation therefor  is  pending,  direct  it  to  be  invested  at  interest, 
for  the  benefit  of  the  person  or  persons  entitled  thereto, 
to  be  paid  upon  the  direction  of  the  court."* 

This  section  of  the  Code  is  a  re-enactment  of  the  provisions 
of  the  revised  statutes,*  which  obviated  the  necessity  that 
prevailed  before  their  passage  of  ascertaining  the  amounts 
of  all  incumbrances  and  of  adjudging  the  rights  of  all  the 
defendants,  before  making  a  decree  for  the  sale  of  the  mort- 
gaged premises.*  Under  the  practice  as  it  prevailed  previous 
to  the  passage  of  the  revised  statutes  and  the  adoption  of 
the  supreme  court  rule  as  above  stated,  junior  incum- 
brancers were  required  to  be  made  parties  prior  to  the  entry 


«  N.  Y.  Supreme  Court  Rule  64.  Harper,  14  Hun  (N.  Y.)  280  (1878^ ; 

«  N.  Y.  Code  Civ.  Proc.  §  1633.  Savings  Inst.  v.  Osley,  4  Hun  (N. 

«  See    Dunning    v.    Ocean    Nat.  Y.)  657  (1875) ;  Atlantic  Sav.  Bank 

Bank.  61  N.  Y.  497  (1875) ;  s.  c.  10  v.  Hiler,  3  Hun  (N.  Y.)  209  (1874) ; 

Am.  Rep.  293  ;  Bergen  v.  Snedeker,  Oppenlieimer  v.  Walker,  3  llun  (N. 

8  Abb.  (N.  Y.)  N.  C.  50  (1879) ;  8.  Y.)  30  (1874). 

c.   21   Alb.  L.  J.  54 ;  Mutual  Life  *  2  N.  Y.  Rev.  Stat.  192,  §§  159, 

Ins.  Co.  V.  Truchtnicht,  3  Abb.  (N.  160. 

Y.)    N.    C.    135    (1877) ;    Tator  v.  *  Wheeler  v.  VanKuren,  1  Barb. 

Adams,  20  Hun  (N.  Y.)  131  (1880) ;  Ch.  (N.  Y.)  490  (1846) ;  Renwick  v. 

Savings  Bank  of  Utica  v.  Wood,  17  Macomb,  Hopk.   Ch.   (N.  Y.)  277 

Hun  (N.  Y.)  133  (1879)  :  Hurst  v.  (1824). 


824  STATUTE    AND    COURT    IIULES.     [§§  699-700. 

of  the  decree,'  in  order  that  they  might  set  up  their  claims 
by  answer  and  thereby  preserve  their  liens  upon  the  surplus 
moneys  arising  from  the  sale  of  the  mortgaged  premises. 

§  699.  Object  of  the  statute  and  court  rule.— Under 
this  practice  it  frequently  happened  that  a  mortgagee  whose 
claim  was  undisputed  was  delayed  in  its  enforcement,  until 
the  subsequent  incumbrancers  had  litigated  as  between 
themselves  their  respective  claims  to  the  surplus.  Costs 
being  allowed  to  every  party  who  appeared  and  answered,  it 
not  unfrequently  happened  that  the  fund  was  greatly  dimin- 
ished, if  not  consumed,  by  the  expenses  of  the  litigation. 
This  was  entirely  needless  where  the  proceeds  of  the  property 
were  only  sufficient  to  pay  the  amount  of  the  plaintiff's 
claim ;  it  was  to  avoid  this  delay  and  loss  that  the  statute 
was  enacted.' 

Under  the  statute  and  the  rule  in  mortgage  foreclosures, 
subsequent  incumbrancers  who  have  no  rights  or  interests 
adverse  to  those  of  the  mortgagee,  although  parties  to  the 
suit,  are  not  permitted  to  litigate  their  respective  claims 
to  the  surplus  as  between  themselves,  until  it  is  ascertained 
that  there  is  a  surplus.'  If  there  is  a  surplus  after  the  sale, 
the  defendants  can  then  settle  their  claims  to  it  by  making 
their  proofs  and  having  their  respective  rights  equitably 
determined  before  a  referee.* 

§700.  Payment  of  surplus  into  court. —  All  surplus 
arising  from  the  proceeds   of  a  mortgage   foreclosure  sale 


•  Renwick  v.  Macomb,  Hopk.  Ch.  App.  Cas.  (N.  Y.)  311  (1847);  Drury 
(N.  Y.)  277  (1824).  See  Kenney  v.  v.  Clark,  16  How.  (N.  Y.)  Pr.  424,  430 
Apgar,  93  N.  Y.  546  (1883).  (1857) ;  Smart  v.  Bement,   3  Keyes 

*  Miller  v.  Case,  Clarke  Ch.  (N.  (N.  Y.)  241  (1866);  s.  c.  4  Abb.  App. 
T.)  395  (1840) ;  Eagle  Fire  Ins.  Co.  Dec.  (N.  Y.)  253  ;  Farmers'  Loan  & 
V.  Flanagan,  1  How.  App.  Cas.  (N.  Trust  Co.  v.  Seymour,  9  Paige  Ch. 
Y.)  311  (1847) ;  Farmers'  Loan  &  (N.  Y.)  538  (1842) ;  Union  Ins.  Co. 
Trust  Co.  V.  Seymour,  9  Paige  Ch.  v.  VanRensselaer,  4  Paige  Ch.  (N. 
(N.  Y.)  538  (1842).  Y.)  85  (1833). 

»  Miller  v.  Case,  Clarke  Ch.  (N.  *  Miller  v.  Case,  Clarke  Ch.  (N. 

Y.)  395  (1840);  Hubbell  v.  Schreyer,  Y.)  395,  399  (1840);  Union  Ins.  Co.  v. 

4  Daly  (N.  Y.)  365  (1873) ;  s.  c.  14  VanRensselaer,  4  Paige  Ch.  (N.  Y.) 

Abb.  (N.  Y.)  Pr.  N.  S.  287  ;  Eagle  85  (1833). 
Fire  Ins.  Co.  v.  Flanagan,  1  How. 


§  700.]  PAYING    SURPLUS    INTO    COURT.  825 

must  be  paid  into  court ;  its  subsequent  distribution  is 
regulated  by  the  rules  of  the  supreme  court.'  The  Code 
requires  that  the  surplus  of  the  proceeds  of  a  sale,  after 
the  payment  of  the  expenses  thereof  and  the  satisfaction  of 
the  mortgage  debt,  shall  be  paid  into  court  for  the  use  of  the 
person  or  persons  entitled  thereto." 

The  supreme  court  rules'  require  "  that  all  surplus  moneys 
arising  from  the  sale  of  mortgaged  premises,  under  any  judg- 
ment, shall  be  paid  by  the  sheriff  or  referee  making  the  sale, 
within  five  days  after  the  same  shall  be  received  and  be  ascer- 
tainable, in  the  city  of  New  York  to  the  chamberlain  of  said 
city  and  in  other  counties  to  the  treasurer  thereof,  unless  other- 
wise specially  directed,  subject  to  the  further  order  of  the 
court  ;  and  every  judgment  in  foreclosure  shall  contain  such 
directions,  except  where  other  provisions  are  specially  made 
by  the  court.  No  report  of  a  sale  shall  be  filed  or  con- 
firmed, unless  accompanied  by  a  proper  voucher  for  the 
surplus  moneys,  and  showing  that  they  have  been  paid  over, 
deposited  or  disposed  of  in  pursuance  of  the  judgment."* 

A  judgment  creditor  has  a  right  to  demand  that  the 
surplus  money  arising  upon  a  foreclosure  shall  be  brought 
into  court ;'  but  where  he  has  not  answered,  a  judgment 
directing  the  payment  of  the  surplus  moneys  to  him  will,  of 
course,  be  improper.'  The  assignee  of  a  mortgage,  where 
the  assignment  was  made  after  a  lis  pendens  had  been  filed 
for  the  foreclosure  of  a  prior  mortgage,  is  entitled  to  appear 
and  ask  that  the  referee  pay  into  court  the  surplus  shown 
to   exist   by  the   judgment    and  the  report  of   sale,   even 


'  Raht  V.  Attrill,  106  K  Y.  423  the  money,  even  tliough  the  mort- 

(1887),  modifying  42  Hun  (N.  Y.)  gagor  fails  to  obtain  it ;  and  if  the 

414.     N.  Y.  Supreme  Court  Rules  mortgagor  redeems  without  obtain- 

61-64.  ing  it,  he  will  still  have  an  unques- 

'^  N.  Y.  Code  Civ.  Proc.  §  1633.  tionable  right  to  have  it  taken  into 

«  N.  Y.  Supreme  Court  Rule  61.  account.      Sinclair  v.    Learned,  51 

*  N.  Y.  Supreme  Court  Rule  61.  Mich.  335  (1883). 

The    non-payment    by    the    sheriff  '  Denton  v.  Nanny,  8  Barb.  (N. 

to    the    mortgagor  of    the   surplus  Y.)  620(1850). 

received  on  a  foreclosure  sale  will  *  Rogers  v.  Ivers,  23  Hun  (N.  Y.) 

not  defeat  the  sale,  for  the  sheriff  424  (1881). 
must  account  to  the  mortgagor  for 


826  PAYING  SURPLUS  TO  SURROGATE.  [§§  701-702. 

though  the  referee  may  report  a  deficiency.*  If  the  report 
of  sale  shows  that  the  deficiency  reported  was  caused  by 
the  allowance  of  a  prior  mortgage  which  was  not  authorized 
by  the  judgment,  and  that  but  for  such  allowance  there 
would  be  a  surplus,  the  surplus  thus  ascertained  will  be 
ordered  to  be  paid  into  court.* 

§  701.  When  surplus  not  paid  into  court. — Where  the 
plaintiff  has  purchased  the  claims  of  judgment  creditors 
and  junior  lienors,  for  whose  benefit  a  mortgage  has  been 
executed,  the  surplus  moneys  arising  on  the  sale  under  a 
prior  mortgage  will  not  be  directed  to  be  paid  into  court,  as 
the  plaintiff  is  entitled  thereto,  and  the  fund  would  only  be 
burdened  with  the  payment  of  fees  and  commissions  by  such 
payment  into  court.* 

§  702.  When  surplus  paid  into  surrogate's  court. — 
The  New  York  Code  provides*  that,  "  where  real  property,  or 
an  interest  in  real  property,  is  sold  in  an  action  or  a  special 
proceeding  to  satisfy  a  mortgage  thereon,  which  accrued 
during  the  decedent's  life-time,  and  letters  testamentary  or 
letters  of  administration,  upon  the  decedent's  estate,  were, 
within  four  years  before  the  sale,  issued  from  a  surrogate's 
court  of  the  state,  having  jurisdiction  to  grant  them,  the 
surplus  moneys  arising  from  such  sale  of  the  premises  must 
be  paid  into  the  surrogate's  court  from  which  the  letters 
issued.  If  the  sale  was  made  pursuant  to  the  directions 
contained  in  a  judgment  or  order,  the  surplus  remaining 
after  the  payment  of  all  the  liens  upon  the  property,  charge- 
able upon  the  proceeds,  which  existed  at  the  time  of  the 
decedent's  death,  must  be  so  paid.  If  the  sale  was  made  in 
any  other  manner,  the  surplus,  exceeding  the  lien  to  satisfy 
which  the  property  was  sold,  and  the  costs  and  expenses, 
must,  within  thirty  days  after  the  receipt  of  the  money 
from  which  it  accrues,  be  so  paid  over  by  the  person  receiv- 
ing that  money.     The  receipt  of  the  surrogate,  or  the  clerk 


'  Koch  V.  Purcell,  45  N.  Y.  Supr.  «  Hoffman  v.  Sullivan.  23  N.  Y. 

Ct.  (13  J.  &  S.)  162  (1879).  Week.  Dig.  311  (1886). 

»  Koch  V.  Purcell,  45  N.  Y.  Supr.  *  N.  Y.  Code  Civ.  Proc.  §  2798. 
Ct.  (13  J.  &  S.)  162  (1879). 


§§703-704.]        STATUTORY  FOKECLOSL'JRE.  827 

of  the  surrogate's  court,  or  the  county  treasurer,  as  the  case 
may  be,  is  a  sufficient  discharge  to  the  person  paying  the 
money,"' 

§  703.  Paying  surplus  into  court  on  foreclosure  by 
advertisement. — Where  a  mortgage  is  foreclosed  by  adver- 
tisement, the  "  attorney  or  other  person  who  receives  the 
money  upon  the  sale,  must,  within  ten  days  after  he  receives 
it,  pay  into  the  supreme  court  the  surplus  exceeding  the 
sum  due  and  to  become  due  upon  the  mortgage,  and 
the  costs  and  expenses  of  the  foreclosure,  in  like  manner 
and  with  like  effect,  as  if  the  proceedings  to  foreclose  the 
mortgage  were  taken  in  an  action  brought  in  the  supreme 
court.'" 

On  the  failure  of  the  attorney,  or  other  person  receiving 
the  money  on  such  a  sale,  to  pay  over  the  surplus  moneys 
received  by  him,  an  attachment  may  be  issued  against  him, 
in  which  case  the  burden  of  proving  that  he  has  paid  such 
surplus  to  the  county  treasurer  will  rest  upon  him.*  Where, 
on  such  a  sale,  the  mortgagee  receives  the  money  and  holds 
the  surplus,  he  is  regarded  as  a  trustee  for  the  person  or 
persons  entitled  thereto,  and  is  liable  to  a  subsequent  judg- 
ment creditor  for  the  balance  of  the  surplus,  after  deducting 
the  amount  due  upon  his  claim,  with  interest  from  the  time 
of  the  demand.* 

§  704.    Character  of  surplus— Personal  or  real  property. 

— The  proceeds  of  the  sale,  after  satisfying  the  mortgage 
debt,  may  be  said  to  stand  in  the  place  of  the  equity  of 
redemption  to  those  who  hold  the  title  to  such  equity 
of  redemption  or  a  lien  upon  it.*  Whether  such  surplus  is 
to  be  treated  as  personal  property  or  real  estate  will  depend 
upon  the  circumstances  of  each  case.     It  is  thought  that 


•  See  Dunning  V.  Ocean  Nat.  Bank,  *  Russell  v.  Duflon,  4  Lans.  (N. 

61   N.    Y.    497  (1875);    StilweU  v.  Y.)  399  (1871). 

Swarthout,  10  N.  Y.  Wk.  Dig.  369  "  Habersham  v.  Bond,  2  Ga.  Dec. 

(1880) ;    White  v.  Poillon,  25  Hun  46  (1847).     See   Clarkson  v.    Skid- 

(N.  Y.)  69  (1881).  more,  46  N.  Y.  297  (1871) ;  Snyder 

«  N.  Y.  Code  Civ.  Proc.  §2404.  v.  Stafford,  11  Paige  Ch.  (N.  Y.)  71 

»  See  Matter  of  Silvernail,  45  Hun  (1844). 
(N.  Y.)  575  (1887). 


828 


SURPLUS PERSONAL  OR  REAL  PROPERTY.  [§  704. 


when  such  surplus  is  to  be  distributed  among  persons  having 
liens  upon  the  land,  it  is  for  that  purpose  to  be  treated 
as  real  estate,  and  to  be  governed  by  the  rules  relating  to 
such  property.'  But  where  the  rights  and  claims  of  the 
persons  among  whom  the  money  is  to  be  divided  are  fixed 
and  determined,  the  money  in  their  hands  is  to  be  treated 
as  personal  property  ;*  surplus  moneys  claimed  by  virtue 
of  a  trust  are  not  realty,  but  personalty.* 

Where  a  person  dies  seized  of  real  estate  incumbered  by 
a  mortgage  which  is  thereafter  foreclosed,  the  surplus  arising 
on  the  sale  is  to  be  regarded  as  realty,  and  passes  to  his  heirs 
or  devisees  and  not  to  his  administrator  ;  his  administrator 
can  not  maintain  an  action  to  recover  the  surplus,  although 
the  mortgage  may  provide  that  the  surplus  shall  be  paid 
to  the  mortgagor,  his  executors  or  administrators.*  But 
the  rule  is  different  where  the  mortgagor,  or  other  owner 
of  the  equity  of  redemption,  dies  after  the  sale  of  the 
mortgaged  premises  has  been  made.* 


'  Moses  V.  Murgatroyd,  1  Johns. 
Ch.  (N.  Y.)  119  (1814) ;  s.  c.  7  Am. 
Dec.  478. 

» See  Cope  v.  Wheeler,  41  N.  Y. 
803  (1869). 

»  American  Life  Ins.  &  Trust  Co. 
V.  VanEps,  56  N.  Y.  601  (1874), 
reversing  14  Abb.  (N.  Y.)  Pr.  N.  S. 
253. 

*  Dunning  v.  Ocean  Nat.  Bank,  61 
N.  Y.  497  (1875) ;  s.  c.  19  Am.  Rep. 
293;  American  Life  Ins,  &  Trust 
Co.  V.  VanEps,  56  N.  Y.  601  (1874); 
Sweezy  v.  Thayer,  11  N.  Y,  Leg. 
Obs.  50(1852);  Graham  v.  Dickinson, 
8  Barb.  Ch.  (N.  Y.)  169,  173  (1848) ; 
Fliess  V.  Buckley,  22  Hun  (N.  Y.) 
551,  556  (1880);  Roup  v.  Bradner, 
19  Hun  (N.  Y.)  517  (1880) ;  Cox  v. 
McBurney,  2  Sandf.  (N.  Y.)  561 
(1849) ;  Beard  v.  Smith,  71  Ala.  568 
(1882) ;  Kinner  v.  Walsh,  44  Mo.  69 
(1869)  ;  Chaffee  v.  Franklin,  11  R. 
L  579  (1877) ;  Freedman's  Savings 
&  Trust  Co.   V.  Earle,  110  U.   S. 


718  (1883);  bk.  28  L.  ed.  304 
Matson  v.  Swift.  8  Beav.  374  (1845) 
Bourne  v.  Bourne,  2  Hare,  39  (1842) 
Biggs  V.  Andrews,  5  Sim.  424  (1832) 
Wright  V.  Rose,  2  Sim.  &  8.  323 
(1825) ;  Van  v.  Bamett,  19  Ves.  102 
(1812);  Brown  v.  Bigg,  7  Ves. 
279  (1802) ;  Policy  v.  Seymour,  2 
Younge  &  Coll.  708  (1837). 

»Denham  v.  Cornell,  67  N.  Y. 
556  (1876);  Horton  v.  McCoy,  47 
N.  Y.  21  (1871) ;  Hoey  v.  Kinney, 
10  Abb.  (N.  Y.)  Pr.  400  (1860); 
Foreman  v.  Foreman,  7  Barb.  (N. 
Y.)  215  (1849) ;  Sweezey  v.  Willis,  1 
Bradf.  (N.  Y.)  495  (1851) ;  Sweezy 
V.  Thayer.  1  Duer  (N.  Y. )  286 
(1852) ;  Bogert  v.  Furman,  10  Paige 
Ch.  (N.  Y.)  496  (1843) ;  Davison  ▼. 
DeFreest,  3  Sandf.  Ch.  (N.  Y.)  456 
(1846) ;  Cox  v.  McBurney,  2  Sandf. 
(N.  Y.)  561  (1849) ;  Smith  v.  Smith, 
13  Mich.  258  (1865). 


§§  705-706.J   SURPLUS — when  PERSOisrALTY.  829 

§  705.  Surplus  personalty,  where  land  so  converted 
under  will. — Although  the  real  estate  may  be  charged  with 
the  payment  of  debts  by  mortgage  or  otherwise,  and  is 
regarded  as  thereby  converted  into  personal  property  so  far  as 
may  be  necessary  to  pay  such  debts,  yet  in  the  absence  of 
a  distinct  intention  to  convert  it,  the  whole  of  the  real  estate 
will  not  be  deemed  converted  into  personalty.' 

The  surplus  moneys  arising  from  the  sale  of  such  real 
estate  stand  in  the  place  of  the  land  for  the  purpose  of 
distribution  among  the  persons  having  vested  interests 
therein  or  liens  thereon.'  The  devisees  of  a  mortgagor 
are  therefore  entitled  to  the  whole  of  the  surplus  moneys 
arising  on  a  foreclosure  sale,  subject  to  the  claims  which 
have  become  liens  thereon.'  The  fact  that  the  surplus 
arising  from  such  sale  is  sometimes  entrusted  to  the  surro- 
gate for  distribution,  will  not  render  it  personal  property.* 

§  706.  Massachusetts  doctrine. — The  doctrine  estab- 
lished in  Massachusetts  varies  somewhat  from  that  stated 
above.  It  is  said  in  Varnum  v.  Meserve,*  where  a  mort- 
gage  contains  a  power  of  sale,  providing  that  the  surplus 
of  the  proceeds  after  the  payment  of  the  debt  and  the 
expenses  shall  be  paid  to  the  mortgagor,  his  executors  or 
administrators,  that  his  executors  may  maintain  an  action 
for  the  surplus,  although  the  mortgagor  by  will  devised  the 
land  to  others.     The    court   recognizes  the  doctrine   that 


'  Bourne  v.  Bourne,  3  Hare,  35,  by  the  sale,  and  the  court  will  apply 

38  (1842).  the  money  according  to  the  rights  of 

»  See  Clarkson  v.  Skidmore,  46  N.  the  parties  as  they  existed  before  the 

Y.  297 (1871);  Livingston  v.Mildrum,  sale.     Astor  v.  Miller,  2  Paige  Ch. 

19  N.  Y.  440  (1865);  Matthews  v.  (N.  Y.)  68,  76  (1830). 

Duryee,  45  Barb.  (N.  Y.)  69  (1865) ;  »  Delafield  v.  White,  43  Hun  (N. 

aff'd  4  Keyes  (N.  Y.)  525  ;  Averill  Y.)  641  (1887) ;   s.  c.  7  N.  Y.  St. 

T.  Loucks,  6  Barb.  (N.  Y.)  471  (1849);  Rep.  301. 

Blydenburgh  v.  Northrup,  13  How.  *  Dunning  v.  Ocean  Nat.  Bank,  61 

(N.   Y.)  Pr.   289  (1856) ;    Fliess  v.  N.  Y.  497  (1874);  s.  c.  19  Am.  Ptcp. 

Buckley,  22  Hun  (N.  Y.)  551  (1880);  293. 

aff'd90N.Y.  286(1883);  Elmendorf  '  90  Mass.    (8    Allen),    158,    160 

V.  Lockwood,  4  Lans.  (N.  Y.)  396  (1864).     See  Newhall  v.  Lynn  Fiv< 

(1871) ;  Snyder  v.  Stafford,  11  Paige  Cent  Sav.  Bank,  101  Mass.  428,  43? 

Ch.  (N.  Y.)  71  (1844).     The  rights  (1869) ;  s.  c.  3  Am.  Rep.  387 
of  parties  in  the  fund  are  not  affected 


830  SUKPLUS BELONGmO   TO    INFANT.  [§  707. 

the  surplus  under  such  circumstances  is  usually  real  estate, 
but  claims  that  the  legal  title  to  the  money  is  vested  in  the 
executor  or  administrator  by  force  of  the  contract  with 
the  mortgagee,  and  that  when  he  collects  it,  he  holds  it  in 
trust  for  the  heirs  or  devisees,  as  the  case  may  be. 

This  case  was  criticised  by  the  court  of  appeals  of  New 
York  in  Dunning  v.  Ocean  National  Bank,'  where  it  is  said 
to  be  in  conflict  with  Wright  v.  Rose,'  in  which  case  the 
contract  was  also  made  to  pay  the  mortgagor,  his  "  executors 
or  administrators."  The  court  held  that  "  the  true  con- 
struction of  these  words  undoubtedly  is  that  the  promise  is 
to  pay  the  executors  or  administrators  whenever  it  might 
have  been  paid  to  the  mortgagor,  as  for  example  when  the 
land  was  sold  in  his  life-time." 

§  707.  Character  of  surplus  belonging  to  infant. — It  is 
provided  by  statute  in  New  York,*  that  "  a  sale  of  real 
property,  or  of  an  interest  in  real  property,  belonging  to  an 
infant  or  incompetent  person,  made  as  prescribed  by  the 
statute,  does  not  give  to  the  infant  or  incompetent  person, 
any  other  or  greater  interest  in  the  proceeds  of  the  sale, 
than  he  had  in  the  property  or  interest  sold.  Those  proceeds 
are  deemed  property  of  the  same  nature,  as  the  estate  or 
interest  sold,  until  the  infant  arrives  at  full  age,  or  the 
incompetency  is  removed."* 


'  61  N.  Y.  497,  505  (1875) ;  s.  c.  (1849) ;  Cutting  v.  Lincoln,  9  Abb. 

19  Am.  Rep.  293.  (N.  Y.)  Pr.  N.  S.  436  (1870) ;  Slium- 

»  2  Sim.  &  S.  323  (1825).  way  v.  Cooper,  16  Barb.  (N.  Y.)  556 

8  N.  Y.  Code  Civ.  Proc.  §2359.  (1853);  Denham  v.  Cornell,  7  Hun 

This  statute  is  said  to  be  merely  an  (N.  Y.)  662  (1876) ;  In  re  Thomas,  1 

enactment  of  the  chancery  rule  as  Hun  (N.  Y.)  473  (1874) ;  s.  c.  4  T. 

applied  to  sales  of  such  property ;  «&    C.    ( N.    Y. )    410 ;    Davison  v. 

the  impress  of  realty  which    was  DeFreest,  3  Sandf.  Ch.  (N.  Y.)  456, 

formerly  given  by  the  rule  of  the  464(1846);  State  v.  Hirons,  1  Houst. 

court  of  chancery,  is  now  given  by  (Del.)  252  (1856) ;  Nelson  v.  Hagers- 

the  statute.   For  man  v.  Marsh,  11 N.  town    Bank,    27    Md.    51    (1867); 

Y.   544,   548  (1854) ;   Shumway  v.  Oberle  v.  Lerch,  18  N.  J.  Eq.  (3  C. 

Cooper,    16    Barb.    (N.    Y.)   556  E.    Gr. )    846    (1867);    Jones    v. 

(1853).  Edwards,  8  Jones  (N.  C.)  L.  336 

*  See  Forman  v.  Marsh,  11  N.  Y.  (1861). 

544,  548  (1854),  reversing  Foreman  v. 

Foreman,    7    Barb.    ( N.   Y. )   215 


§§  708-709.]    WHO  JIAY  APPLY  FOR  SURPLUS.  831 

§  708.  Who  entitled  to  apply  for  surplus.— All  liens 
upon  or  interests  in  the  mortgaged  premises,  which  are  inferior 
to  the  mortgage  sought  to  be  foreclosed,  are  transferred 
to  the  surplus  on  the  sale  of  the  premises ;'  consequently, 
all  persons  owning  such  liens  or  interests  are  entitled  to 
participate  in  the  distribution  of  the  surplus.'  The  plaintiff 
not  being  permitted,  in  most  cases,  to  allege  all  of  his 
demands  in  his  complaint,  is  entitled  to  an  order  of  reference 
to  enable  him  to  assert  and  prove  a  lien  junior  to  the  mort- 
gage foreclosed ;'  otherwise  such  demands  as  are  junior  to 
the  mortgage  foreclosed  and  are  not  alleged  in  the  complaint, 
would  be  cut  off  unless  the  sale  was  made  subject  to  them.* 

The  owner  of  a  lien  who  was  not  made  a  party  to  the 
suit  and  whose  lien  was  not  cut  off  by  the  foreclosure,  has 
no  right  to  share  in  the  surplus  arising  from  the  proceeds  of 
the  sale.*  Consequently,  a  person  whose  claim  upon  the 
property  is  prior  to  the  mortgage  foreclosed,  has  no  claim 
upon  or  right  to  the  surplus  ;*  and  a  senior  mortgagee,  or 
other  person  claiming  the  rights  of  a  senior  mortgagee  by 
subrogation  or  otherwise,  has  no  right  to  participate  in  the 
surplus  realized  from  a  sale  on  the  foreclosure  of  a  junior 
mortgage.' 

§  709.  Protecting  claims  to  surplus. — Where  surplus 
moneys  from  the  sale  of  mortgaged  premises  are  brought 
into  court,  they  take  the  place  of  the  land,  and  creditors 
having  liens  upon  or  interests  in  the  land  subsequent  to  the 


'SeeMatthewsv.  Duryee,45Barb.  1  Barb.   Ch.   (N.   Y.)   490  (1846); 

(N.  Y.)  69  (1865) ;  s.  c.  3  Abb.  App.  Roosevelt  v.  Elithorp,  10  Paige  Ch. 

Dec.  (N.  Y.)  220  ;  17  Abb.  (N.  Y.)  Fr.  (N.  Y.)  415  (1843) ;  Tower  v.  White, 

256 ;  Averill  v.  Loucks,  6  Barb.  (N.  10  Paige  Ch.  (N.  Y.)  395  (1843). 

Y.)    470    (1849) ;    Blydenburgh   v.  *  See    Emigrant    Industrial    Sav. 

Northrop,  13  How.  (N.  Y.)  Pr.  289  Bank  v. Goldman,  7oN.Y.  127(1878); 

(1856).  Bache  v.    Doscher,   67  N.   Y.   429 

"  Field    V.    Hawxhurst,   9  How.  (1876) ;   Root  v.  Wheeler,  12  Abb. 

(N.  Y.)  Pr.  75  (1853).  (N.  Y.)  Pr.  294  (1861) ;  Winslow  v. 

3  Mutual  Life  Ins.  Co.  V.  Trucht-  McCall,    32   Barb.    (N.    Y. )    241 

nicht,   3  Abb.  (N.  Y.)  N.  C.   135  (1860). 

(1877).  6  See    DeRuyter    v.    St.    Peter's 

*  Homeopathic  Mut.  Life  Ins.  Co.  Church,  2  Barb.  Ch.  (N.  Y. )  555  (1 848). 

V.   Sixbury,   17  Hun  (N.    Y.)    424  1  Firestone  v.  State,  100  Ind.  22G 

(1879).     See  Wheeler  v.  VanKuren,  (1884). 


832  PROTECTING    CLAIMS   TO    SURPLUS.  [§  710. 

decree  under  which  the  sale  is  made,  have  the  same  claim 
upon  the  surplus  moneys  which  they  had  upon  the  land 
previous  to  the  decree.'  The  rights  and  equities  of  junior 
claimants  are  before  the  court,  and  are  as  much  the  object  of 
its  care  as  are  those  of  the  owner  of  the  mortgage 
foreclosed,  and  the  surplus  moneys  can  not  be  disposed  of 
until  such  claimants  are  brought  into  court.' 

In  ordering  a  sale  of  the  mortgaged  premises  for  the 
satisfaction  of  the  debt,  the  court  should  take  into  considera- 
tion all  the  liens  which  exist  subsequent  to  that  of  the 
mortgage  foreclosed  ;  as  all  such  liens  are  cut  off  by  the  fore- 
closure, they  should  be  protected  by  the  court  in  the  decree 
of  sale ;  otherwise  they  will  be  lost.  In  such  cases  the  court 
should  not  content  itself  with  simply  giving  such  directions 
in  the  decree  as  will  certainly  produce  payment  of  the 
plaintiff's  lien,  without  regard  to  the  effect  such  directions 
may  have  upon  those  liens  which  are  subsequent,  but  it 
should  make  such  a  decree  as  will  fully  protect  the  rights 
and  preserve  the  equities  of  all,  at  the  same  time  maintaining 
the  priority  of  the  plaintiff's  claim.* 

§  710.  Adjusting  equities. — A  court  will  adjust  the 
equities  between  subsequent  lienors,  whenever  they  can  be 
established  without  regard  to  the  manner  in  which  the 
surplus  is  brought  into  court.*  Thus,  where  different 
parcels  of  mortgaged  premises  are  encumbered  by  separate 
judgments  or  mortgages,  the  equitable  rules  regulating  the 
marshaling  of  assets  will  control  the  proceedings  to  deter- 
mine their  priorities  and  to  distribute  the  surplus.* 


'  Matthews  v.  Duryee,  45  Barb.  ings  Bank   v.   Osley,    4  Hun   (N. 

(N.  Y.)  69  (1865) ;  s.  c.  3  Abb.  App.  Y.)  657  (1875) ;  Miller  v.  Dooley,  1 

Dec.  (N.  Y.)  220  ;  17  Abb.  (N.  Y.)  Law  Bull.  50  (1879). 

Pr.  256  ;  Averill  v.  Loucks,  6  Barb.  *  Livingston  v.  JMildrum,    19  N. 

(N.  Y.)  470  (1849) ;  Wiggin  v.  Hey-  Y.  440  (1859).    See  Snyder  v.  Staf- 

wood,  118  Mass.  514  (1875).  ford,  11  Paige  Cli.  (N.  Y.)  71  (1844). 

»  DeForest  v.   Farley,  62  N.  Y.  *  Oppenheimer  v.  Walker,  3  Hua 

628  (1875) ;  Livingston  v.  Mildrum,  (N.  Y.)  30  (1874) ;  s.  c.  5  T.  «&  C. 

19    N,    Y.    440    (1859) ;    Tator    v.  (N.  Y.)  325  ;  Snyder  v.  Stafford.  11 

Adams,  20  Hun  (N.  Y.)  181  (1880) ;  Paige    Ch.     (N.    Y. )    71    (1844); 

Beekman  v.  Gibbs,  8  Paige  Cb.  (N.  James  v.  Hubbart,  1  Paige  Ch.  (N. 

Y.)511  (1840).  See  Union  Dime  Sav-  Y.)  228,  234  (1828). 


§§  711-712.]    PAYMENT  OF  LIENS PEIOKITY. 


833 


§  711.  Liens  to  be  paid  in  order  of  priority  in  time. — 
All  incumbrances  on  mortgaged  premises  inferior  to  the 
mortgage  on  which  the  sale  is  based,  must  be  paid  in 
the  order  of  time  in  which  they  respectively  became  liens.* 

A  mortgage  will  be  preferred  to  a  judgment  lien  in  the  dis- 
tribution of  the  surplus,  where,  under  a  contract  of  sale,  the 
deed  was  left  in  escrow  until  a  certain  amount  should  be 
paid,  and  a  mortgage  given  to  secure  the  remaining  indebted- 
ness, and  the  judgment  was  recovered  against  the  purchaser 
prior  to  the  delivery  of  the  deed  and  the  execution  of  the 
mortgage,  because  the  equitable  Hen  which  the  mortgage 
secured  was  prior  in  fact  to  the  judgment.*  A  judgment 
will  not  be  preferred  to  a  prior  unrecorded  mortgage  given 
to  secure  future  advances  or  liabilities,  unless  there  has  been 
a  fraudulent  intention  on  the  part  of  the  mortgagee  in  with- 
holding his  mortgage  from  record.* 

§712.     Questions  of  priority  —  How  determined. — In 

New  York,  where  a  surplus  arises  upon  the  foreclosure  of 


»  New  York  Life  Ins.  &  Trust  Co. 
V.  Vanderbilt,  12  Abb.  (N.  Y.)  Pr. 
458  (1861) ;  Savings  Bank  of  Utica 
V.  Wood,  17  Hun  (N.  Y.)  133 
(1879) ;  Oppenheimer  v.  Walker,  8 
Hun  (N.  Y.)  80  (1874) ;  8.  C.  5  T.  & 
C.  (N.  Y.)  825.  See  Patty  v.  Pease, 
8  Paige  Ch.  (N.  Y.)  277  (1840); 
Skeel  V.  Sparker,  8  Paige  Cti.  (N. 
Y.)  182  (1840) ;  Guion  v.  Knapp, 
6  Paige  Ch.  (N.  Y.)  35  (1836) ;  Jen- 
kins V.  Freyer,  4  Paige  Ch.  (N.  Y.) 
53  (1833) ;  Iglehart  v.  Crane,  42  111. 
261  (1866) ;  Sheperd  v.  Adams,  32 
Me.  63  (1850) ;  Holdcn  v.  Pike,  24 
Me.  427  (1844);  Chase  v.  Woodbury, 
60  ]SIass.  (6  Cush.)  148  (1850) ;  Allen 
V.  Clark,  84  Mass.  (17  Pick.)  47 
(1835);  Wikoflf  v.  Daris,  4  N.  J. 
Eq.  (3  H.  W.  Gr.)  224  (1843); 
Shannon  v.  Marselis,  1  N.  J.  Eq.  (1 
Saxt. )  418  (1881);  Brown  v. 
Siuimons,  44  Vt.  475  (1871); 
Lyman  v.  Lyman,  82  Vt.  79  (1859) ; 


Jones  V.  Myrick,  8  Gratt.  (Va.)  179 
(1851) ;  Henkle  v.  Allstadt,  4  Gratt. 
(Va.)  284  (1848) ;  Herbert's  Case,  3 
Coke,  115  (1584).  Compare  Parkman 
V.  Welch,  86  Mass.  (19  Pick.)  281 
(1837). 

'  McKinstry  v.  Mervin,  cited  in  8 
Johns.  Ch.(N.Y.)  466  (1815);  Haines 
V.  Beach,  3  Johns.  Ch.  (N.  Y.)  459 
(1818).  See  People  v.  Bergen,  53 
N.  Y.  404  (1878) ;  Peabody  v.  Rob- 
erts, 47  Barb.  (N.  Y.)  91  (1866); 
Freeman  v.  Schroeder,  43  Barb.  (N. 
Y.)  618  (1864) ;  Averill  v.  Loucks,  6 
Barb.  (N.  Y.)  470  (1849).  As  to 
priority  of  liens  on  surplus  moneys 
on  foreclosure,  see  Savings  Bank  of 
Utica  V.  Wood,  17  Hun  (N.  Y.)  133 
(1879). 

«  Cook  V.  Kraft,  8  Lans.  (N.  Y.) 
512  (1871) ;  8.  c.  41  How.  (N.  Y.) 
Pr.  279  ;  60  Barb.  (N.  Y.)  410. 

«  Thomas  v.  Kelsey,  30  Barb,  (N. 
Y.)  268  (1859).  ^^      ^ 

(53) 


834  DETEimiKUNG    PRIORITIES.  [§713. 

a  first  mortgage  in  a  county  court,  the  claims  of  junior 
mortgagees  and  judgment  creditors  must  be  litigated  before 
a  referee  appointed  in  the  foreclosure  by  the  same  court ; 
an  action  for  that  purpose  can  not  be  maintained  in  the 
supreme  court.'  Where  there  is  a  surplus  arising  from 
the  sale  of  mortgaged  premises,  such  surplus  may,  in  the 
absence  of  contesting  creditors,  be  applied  directly  to  the 
payment  of  another  debt  owing  by  the  mortgagor  to 
the  assignee  of  the  mortgage  and  secured  upon  said 
premises.'  And  where  there  are  other  claimants,  the 
plaintiff  will  have  the  same  right  to  present  and  establish  a 
claim  to  the  surplus  as  a  defendant  to  the  foreclosure  or  any 
other  person.* 

Where  the  demands  of  the  plaintiff,  in  addition  to  the 
claim  on  his  mortgage,  are  junior  to  such  mortgage,  they 
should  be  set  out  in  the  complaint,  so  that  they  may  be 
litigated  and  disposed  of  by  the  decree  of  foreclosure.*  The 
sale  of  the  property  can  not  be  made  subject  to  subsequent 
liens  which  the  plaintiff  may  have  against  it.* 

§  713.  Claims  must  be  liens  on  mortgaged  premises. — 
To  enable  a  creditor  to  enforce  his  claim  to  the  surplus 
moneys,  he  must  establish  a  lien  on  the  mortgaged  premises. 
The  surplus  moneys  arising  from  a  sale  on  foreclosure  take 
the  place  of  the  land  for  the  purpose  of  distribution  among 
the   persons   having   claims   thereto.*      A   simple   contract 


'  Fliess  V.  Buckley,  90  N.  Y.  286  the  land  equal  to  the  surplus,  was  a 

(1882),  affirming  24  Hun  (N.  Y.)  514;  sufficient  defence.     Eddy  v.  Smith, 

fi.  c.  22  Hun  (N.  Y.)  551.  13  Wend.  (N.  Y.)  488  (1835). 

*  Beekman's  Fire  Ins.  Co.  v.  First  *  Tower  v.  While,  10  Paige  Ch. 

M.    E.    Church    of    New  York,  29  (N.Y.)  395  (1843).  See  Wheeler  v.  Van 

Barb.  (N.  Y.)  658  (1859);   8.  c.  18  Kuren,    1    Barb.    Ch.   (N.    Y.)  490 

How.  (N.  Y.)  Pr.  431.  (1846) ;    The  Homeopathic  Mutual 

3  Field  V.  Hawxhurst,  9  How.  (N.  Life  Ins.  Co.  v.  Sixbury,  17  Hun  (N. 

Y.)  Pr.  75  (1853) ;  Mutual  Ins.  Co.  v.  Y.)  424  (1879). 

Truchtnicht,   3   Abb.   ( N.    Y. )  N.  *  Roosevelt  v.  Elithorp,  10  Paige 

C.  135  (1877).     Thus,  where  a  mort-  Ch.  (N.  Y.)  415  (1843) ;  The  Homeo- 

gagee  sold  under  the  statute  and  had  pathic  Mutual  Life  Ins.  Co.  v.  Six- 

a  surplus    in    his    hands,   and  the  bury,  17  Hun  (N.  Y.)  424  (1879). 

mortgagor's  grantee  sued  for  it,  it  *  Clarkson  v.  Skidmore,  46  N.  Y, 

was  held  that    the    fact    that    the  297  (1871)  ;  Livingston  v.  Mildrum, 

former  had  a  judgment  lien  upon  19  N.   Y.  440  (1859);  Matthews  v. 


§  714.]        CLAIMS    MUST    BE   LIENS    ON    PREJnSES.  835 

creditor  can  not  claim  any  portion  of  the  fund  ;*  claims, 
however  just,  which  have  not  been  perfected  into  liens, 
under  which  the  property  could  be  sold  on  execution,  can 
not  be  taken  into  account  by  the  referee.'  The  general 
legal  liens  of  the  judgment  creditors  of  a  mortgagor,  however, 
can  not,  in  equity,  prevail  against  prior  equitable  claims  upon 
the  mortgaged  premises.* 

The  inchoate  rights  of  mechanics  and  material-men,  under 
the  statute  giving  them  a  lien,  seem  to  be  claims  of  such  a 
nature,  however,  that,  although  not  established  by  judg- 
ment, they  are  entitled  to  be  considered  by  the  referee  on 
an  application  for  the  surplus,  and  to  share  in  the  distri- 
bution thereof.* 

§714.  Equitable  distribution  —  Claims  liens  on  two 
funds. — In  the  distribution  of  surplus  moneys  arising  on  the 
sale  of  mortgaged  premises,  a  prior  general  lien  thereon  will 
be  preferred  to  a  subsequent  specific  lien,  especially  if 
the  holder  of  the  former  has  no  other  fund  to  resort  to  and  the 
owner  of  the  specific  lien  has.  This  rule  is  based  upon 
the  well  settled  principle  of  equity  that  where  one  creditor 
has  a  lien  upon  two  funds,  and  another  creditor  has  a  lien 
upon  only  one  of  those  funds,  the  latter  has  a  right  to  require 
the  former  to  exhaust  his  remedies  against  the  fund 
on  which  he  alone  has  a  lien  before  resorting  to  the 
other  fund.* 


Duryee,  45  Barb.  (N.  Y.)  69  (1865) ;  »  Husted  v.   Dakin,  17  Abb.  (N. 

afif'd  4  Keyes  (N.  Y.)  525  ;  Averill  Y.)  Pr.  137  (1857) ;  King  v.  West, 

V.    Loiicks,   6    Barb.    (N.   Y.)    471  10  How.  (N.  Y.)  Pr.  833  (iS5-l).   See 

(1849) ;   Blyden burgh  v.   Northrop,  Mutual  Life  Ing.  Co.  v.  Bowen,  47 

13  How.    (N.  Y.)  Pr.    289  (1856) ;  Barb.  (N.  Y.)  618  (18C6). 

Fliess  V.  Buckley,  22  Hun  (N.  Y.)  »  s^eet  v.  Jacocks,  6  Paige  Ch. 

551   (1880);  affirmed  90  N.  Y.  286  ;  (N.   Y.)  355  (1837);   s.  c.   31   Am. 

Elmendorf  v.  Lockwood,  4  Lans.  Dec.    252;    Arnold    v.    Patrick,   6 

(N.  Y.)  396  (1871) ;  fnyder  v.  Staf-  Paige  Ch.  (K  Y.)  310  (1837);  White 

ford,  11  Paige  Ch.  (N.  Y.)  71  (1844).  v.  Carpenter,  2  Paige  Ch.  (N.  Y.) 

»  Delafield  v.  White,  19  Abb.  (^.  217  (1830) ;  In  re  Howe,  1  Paige  Ch. 

Y.)  N.  C.  104  (1887).     See  People  e«  (N.  Y.)  125  (1838). 

rd.  Short  v.  Bacon,  99  N.  Y.  275  *  Livingston  v.  Mildrum,  19  N.Y. 

(1885);     Dunning  v.    Ocean  Nat.  440(1859). 

Bank,  61  N.  Y.  497  (1875) ;  s.  c.  19  '  ]Mecnanics'  Bank  v.  Edwnrd',  1 

Am.  Rep.  298.  Barb.   (N.  Y.)  271  (1817) ;   8.  c.    2 


636       DISTRIBUTINa  SURPLUS MORTGAGOR  DEAD.    [§715. 

§  715.  Distribution  of  surplus— Mortgagor  deceased. 
—Where,  after  the  death  of  a  mortgagor,  an  action 
is  brought  to  foreclose  a  mortgage  which  accrued  during 
his  Hfe-time,  and  letters  testamentary  or  of  administration 
were  issued  upon  his  estate  by  a  surrogate  within  four 
years  prior  to  the  sale,  the  New  York  Code  of  Civil  Procedure' 
requires  that  the  surplus  moneys  arising  from  such  sale  shall  be 
paid  into  the  surrogate's  court  from  which  the  letters  were 
issued.' 

Where,  after  the  death  of  a  mortgagor,  an  action  is 
commenced  to  foreclose  a  mortgage  on  his  real  estate,  in 
which  a  sale  is  had  in  accordance  with  the  decree  of  the 
court,  the  surplus  arising  on  the  sale  may  be  distributed 
by  and  under  the  direction  of  the  court  rendering  such 
decree  ;*  such  surplus  should  be  distributed  ratably  among 
all  the  general  and  judgment  creditors  of  the  deceased  owner, 
after  notice  to  them  and  after  an  opportunity  has  been 
given  them  to  be  heard.*  But  where  a  general  creditor,  who 
had  no  notice  of  the  proceedings  for  the  distribution  of 
such  surplus,  until  after  the  order  of  the  court  confirming 
the  report  of  the  referee  as  to  the  distribution  of  the 
moneys  was  granted,  applies  to  be  made  a  party  to  the  pro- 
ceedings and  for  an  opportunity  to  be  heard,  his  application 
will  be  granted.* 

Where  a  mortgage  is  foreclosed  after  the  death  of  the 
mortgagor  or  owner  of  the  equity  of  redemption,  the 
surplus  money  passes  to  his  heirs  or  devisees,  and 
can   not   be   collected   by   his   executor  or    administrator, 


Barb.  (N.  Y.)  545;  6  N.  Y.  Leg.  Obs.  427  (1871)  ;  German  Savings  Bank 

159.  V.    Sharer,    25    Hun   (N.   Y.)   409 

•  N.  Y.  Code  Civ.  Proc.  §§  2798,  (1881). 

2799.  «  German  Savings  Bank  v.  Sharer, 

'  Ag  to  the  right  to  have  the  sur-  25  Hun  (N.  Y.)  409  (1881). 

plus  paid  into  the  surrogate's  court,  *  Loucks  v.  VanAUen,   11  Abb. 

see  White  v.  Poillon,  25  Hun  (N.  Y.)  (N.  Y.)  Pr.  N.  S.  427  (1871) ;  Ger- 

69  (1881) ;  and  as  to  the  applicability  man  Sav.  Bank  v.  Sharer,  25  Hun 

of  this  section  of  the  Code  to  sales  (N.  Y.)  409  (1881) ;  White  v.  Poillon, 

where  the  foreclosure  is  conducted  25  Hun  (N.  Y.)  69  (1881). 

by  an  action,   see  Loucks  v.  Van-  »  German  Sav,  Bank  v.  Sharer,  25 

Allen,  11  Abb.  (N.  Y.)  Pr.  N.  S.  Hun  (N.  Y.)  409  (1881). 


§716.]      life-tenant's  interest  in  surplus.  837 

although  the  mortgage  may  contain  an  agreement  to 
pay  any  surplus  arising  on  such  sale  to  the  mortgagor,  his 
executors  or  administrators.'  In  such  a  case  creditors  must 
be  paid  before  legatees,'  because  debts  are  in  the  nature 
of  charges  upon  the  realty,  and  it  is  only  the  residue  left 
after  paying  such  debts  that  can  be  divided  among  the 
heirs  or  devisees.* 

Specific  devisees  of  the  land  sold  are  entitled  to  the 
surplus  moneys  arising  therefrom,  according  to  their  respec- 
tive liens  under  the  will,  subject,  however,  to  the  assertion  of 
other  legal  claims  which  were  liens  upon  the  land  before  its 
sale,  or  which  have  equitably  become  prior  liens  upon  the 
fund  arising  therefrom  since  that  time.* 

§  716.  Interest  of  life-tenant  in  surplus.— Upon  a  dis- 
tribution in  the  surrogate's  court  of  the  surplus  moneys 
arising  from  a  sale  of  mortgaged  premises  on  foreclosure, 
under  the  provisions  of  the  Code,*  where  there  is  a  life 
estate  in  the  land  sold,  the  fund  must  be  invested  under  the 
direction  of  the  court  and  the  income  thereof  paid  to 
the  beneficiary  until  the  determination  of  such  life  estate  ;  the 
surrogate  can  not  order  the  payment  of  a  gross  sum  in  lieu 
thereof.* 

But  in  the  matter  of  Zahrt,'  it  was  said  that  where  land,  in 
which  a  widow,  by  the  terms  of  her  deceased  husband's 
will,  has  a  life  estate,  is  sold  upon  foreclosure,  leaving  a  sur- 
plus, it  rests  in  the  sound  discretion  of  the  court  whether 
or  not  she  shall  recieve  a  gross  sum  for  the  value   of  such 


>  See    Dunning    v.    Ocean    Nat.  286  (1882) ;  Dunning  v.  Ocean  Nat. 

Bank,  61  N.  Y.  497  (1875) ;  8.  C.  19  Bank,  61  N.  Y.  497  (1875) ;  s.  c.  19 

Am.  Rep.  293,  aflf'g  6  Lans.  (N.  Y.)  Am.   Rep.  293. 

396.  '  N.  Y.  Code  Civ.  Proc.  §  2799. 

«  Clark's  Case,   15  Abb.  (N.   Y.)  «  See  Zalirt's  Estate,  11  Abb.  (N. 

Pr.  227  (1862).  Y.)  N.  C.  225  (1882),  citing  Arrow- 

»  German  Sav.  Bank  v.  Sharer,  25  smith  v.  Arrowsmith,  8  Hun  (N.  Y.) 

Hun  (N.  Y.)  409  (1881).    See  N.  Y.  606  (1876) ;  In  re  Isrglesden,  3  Redf. 

Code  Civ.  Proc.  §  2750.  (N.  Y.)  375,  378  (1879).     See  Lewis 

*  Delafield  v.  White,  19  Abb.  (N.  v.  Smitli,  9  N.  Y.  502  (1854). 

T.)  N.  C.  104  (1887).     See  People  ex  '  94  N.  Y.  605  (1S84).     See  N.  T. 

rd.  Short  v.  Bacon,  99  N.  Y.  275  Code  Civ.  Proc.  §  2793. 
(1885) ;  Fliess  v.  Buckley,  90  N.  Y. 


83S  PEIOB  LNCUMBKANCEKS SUllPLUS.   [§§717-718. 

estate,  to  be  estimated  by  the  rules  of  practice  established 
by  the  supreme  court.' 

§  717.  Rights  of  prior  incumbrancers  not  parties.— A 
prior  claimant,  whatever  his  lien  may  be,  is  not  entitled  to 
participate  in  the  distribution  of  the  surplus,  unless  he  was 
a  party  to  the  foreclosure,*  for  where  he  was  not  made  a 
party,  his  lien  will  not  be  affected,  nor  the  land  discharged 
of  his  incumbrance,  nor  the  lien  transferred  to  the  surplus 
moneys.'  Hence,  where  a  prior  incumbrancer  is  not  made  a 
party  and  his  lien  is  not  affected  by  the  foreclosure,  he  will 
have  no  claim  to  the  surplus,  unless  he  releases  to  the 
purchaser  all  future  claims  upon  the  equity  of  redemption.* 
It  is  said  that  this  rule  is  not  technical,  but  is  founded  on  the 
equitable  principle  that  such  a  party  can  not  have  a  lien  upon 
both  the  land  and  the  surplus.* 

§  718.  Liens  attaching  pendente  lite. — It  is  said  in 
Koch  V.  Purcell,*  that  one  who  takes  a  mortgage  after  a  lis 
pendens  has  been  filed,  will  have  a  right  to  be  heard  on  the 
reference  for  the  distribution  of  the  surplus,  although  he  was 
not  made  a  party  to  the  foreclosure.  And  it  has  been 
held  that  the  surplus  remaining  after  the  payment  of  the 
mortgage  debt,  may,  on  application,  be  paid  to  an  incum- 
brancer not  a  party  to  the  suit,  if  it  appears  that  he  is,  in 
equity,  entitled  to  receive  it.^ 

Incumbrancers,  and  persons  acquiring  other  interests  in 
the  mortgaged  premises  pendente  lite,  need   not   be  made 


*  N.  Y.  Supreme  Court  Rule  71.  *  Emigrant      Industrial     Savings 

»  Root  V.  Wheeler,  12  Abb.  (N.  Y.)  Bank  v.   Goldman,   75  N.    Y.    127 

Pr.  294  (1861) ;  Mutual  Life  Ins.  Co.  (1878) ;  Bache  v.  Doscher,  67  N.  Y. 

of  N.  Y.  V.  Truchtnicht,  3  Abb.  (N.  429  (1876) ;    Root  v.    Wiieeler,    13 

Y.)  N.  C.  135  (1877) ;    Winslow  v.  Abb.  (N.  Y.)  Pr.  294  (1861) ;  Wins- 

McCall.  32  Barb.  (N.  Y.)  241  (1860).  low  v.  McCall,  32  Barb.  (N.  Y.)  241 

See  Koch  v.  Purcell,  45  N.  Y.  Supr.  (1860). 

Ct.  (13  J.  &  S.)  162  (1879).  »  Mutual  Life  Ins.  Co.  of  N.  Y.  v. 

»  Mutual  Life  Ins.  Co.  of  N.  Y.  Truchtnicht,  3  Abb.  (N.  Y.)  N.  C. 

V.  Truchtnicht,  3  Abb.  (N.  Y.)  N.  135  (1877). 

C.  135  (1877) ;  Winslow  v.  McCall,  •  45  N.  Y.  Supr.  Ct.  (13  J.  «&  S.) 

32  Barb.  (N.  Y.)  247  (1860) ;  Waller  162  (l«7i)). 

V.  Harris,  7  Paige  Ch.  (N.  Y.)  167  '  Ellis  v.  Southwell,   29  111.    549 

(1838);  aff'd  20  Wend.  (N.  Y.)  555.  (1863) 


§  719.]  EQUITABLE   PEIOEITIES   TO   SURPLUS.  839 

parties  to  the  foreclosure,  because  their  interests  in  the 
subject  matter  of  the  suit  will  be  bound  and  concluded  by 
the  decree.'  If  the  liens  of  such  persons  are  not  presented 
and  shown  to  exist,  the  surplus  may  be  distributed  without 
notice  to  them ;  where  their  liens  are  presented  in  proper 
form,  they  will  be  entitled  to  notice  of  the  proceedings 
to  distribute  the  surplus,  and  their  rights  will  be  protected 
by  the  court." 

§  719.  Equitable  priorities  between  subsequent  mort- 
gagees.— Where  there  are  several  liens  upon  the  mortgaged 
premises,  the  surplus  money  is  to  be  applied  to  their  discharge 
in  the  order  of  their  priority,'  and,  presumptively,  the  mort- 
gage first  recorded  is  the  prior  lien.*  This  presumption, 
however,  may  be  overcome  by  proof  that  the  mortgage 
first  recorded,  by  verbal  agreement  between  the  mortgagor 
and  the  mortgagee,  is  not  to  become  operative  until  the 
whole  consideration  is  paid.* 

An  agreement  between  a  mortgagee  and  a  mortgagor 
that  the  mortgage  shall  be  second  in  time  to  another 
mortgage  on  the  same  premises  will,  if  such  agreement  is 
made  prior  to  the   delivery  of  the    mortgage,  be   binding 


'  Cook  V.  Mancius,  5  Johas.  Ch.  one  to  secure  $221.56,  payable  in 

( N.    Y. )   89    ( 1821 ) ;     Darling    v.  nine  equal  annual  installments,  and 

Osborne,    51   Vt.    158  (1878),     See  the  other  $86.23,  payable  in  three 

Harrington  v.  Slade,  22  Barb.  (N.  equal  annual  installments,  the  first 

Y.)  161  (1856) ;    People's  Bank  v.  installment  to  become  due  Dec.  4, 

Hamilton    Manuf.    Co.,    10    Paige  1856,  it  was  agreed  that  the  mort- 

Ch.  (N.  Y.)  481  (1843);    Sedgwick  gage  securing  the  $221.56  should  be 

V.   Cleveland,  7  Paige  Ch.  (N.  Y.)  the  first  lien  on  the  premises.     This 

287  (1838).  mortgage  was  subsequently  assigned 

*  Cook  V.  Mancius,  5  Johns.  Ch.  by  the  mortgagee  to  the  defendant, 
(N.  Y.)  89  (1«21).  See  N.  Y.  and  was  foreclosed  under  the  statute. 
Supreme  Court  Rule  64.  Upon  the  sale  of  the  premises  on  Jan. 

*  Averill  v.  Loucks,  6  Barb.  (N.  5,  1850,  they  were  struck  off  to  M. 
Y.)  470  (1849).  for  $431.50,  a  sum  larger  than  the 

*  Freeman  v.  Schroeder,  43  Barb.  asnount  due  upon  the  mortgage,  to- 
(N.  Y.)  618  (1864) ;  s.  c.  29  How.  getter  with  the  costs  of  foreclosure. 
(N.  Y.)  Pr.  263.  The  court  held  that  the  defendant 

*  Where  a  plaintiff  on  Dec.  4,  was  entitled  to  have  the  mortgage 
1846,  executed  two  mortgages  at  the  for  $86.23  first  satisfied  out  of  the 
lame  time  on  the  same  piece  of  surplus  moneys,  and  that  the  plain- 
i'toperty,  for  the  purchase  money,  tiflf  was  entitled  only  to  the  balance 


840  BURDEN    OF    PROOF PRIORITIES.    [§§720-721. 

upon  the  parties  as  well  as  upon  an  assignee  of  the  mortc^a- 
gee,'  because,  as  between  the  holders  of  different  mort- 
gages, an  assignee  occupies  no  better  position  than  did  his 
assignor." 

Thus,  in  a  case  where  a  mortgage  was  assigned,  but  the 
assignment  was  not  recorded,  and  subsequently  a  satisfaction 
piece  was  executed  by  the  original  mortgagee,  which  was 
duly  recorded,  and  a  second  mortgage  was  executed  upon 
the  same  premises,  it  was  held  that  the  recording  act 
protected  the  second  mortgagee  and  that  he  had  a  prior 
lien  upon  the  surplus.* 

§  720.  Burden  of  proof  in  showing  priorities. — To  over- 
come the  presumption  as  to  priority,  the  burden  of  proof  is 
upon  the  holder  of  the  subsequent  claim  to  show  his  prior 
right  by  positive  evidence.*  If  the  mortgage  first  recorded  is 
shown  not  to  have  been  a  valid  lien  for  its  amount  at 
the  time  a  subsequent  mortgage  was  given,  by  reason  of  the 
consideration  not  having  been  fully  paid,  and  there  was  a 
verbal  agreement  between  the  mortgagor  and  the  mort- 
gagee that  it  should  not  become  operative  until  the  whole 
consideration  was  paid,  the  presumption  of  priority  will  be 
destroyed.'  And  where  a  mortgage  is  recorded  with  notice 
to  the  mortgagee  of  the  existence  of  a  prior  unrecorded 
mortgage,  such  notice  will  destroy  the  priority  of  the  lien 
of  the  mortgage  last  executed.* 

§  721.  Rights  of  equal  mortgagees  —  Senior  mort- 
gagees.— Where  the  liens  are  equal  in  rank  they  will  be 
protected    by   the   court,    and    the  power  of  the  court    to 


remaininsr  after  paying  that  mort-  (N.  Y.)  Pr.  N.  8.  97(1873);  s.  c.  53 

gage,  w.ilimtfcresl.     Ijaiberv,  Gary,  N.  Y.  404;  Peabody  v.  Roberts,  47 

11  Barb.  (N.  Y.)  549  (1851).  Burb.  (N.  Y.)  91  (1866) ;  Freeman  v. 

'  Freeman  v.  Schroeder,  43  Barb.  Schroeder,    43    Barb.  (N.  Y.)    618 

(N.  Y.)  618  (1864);  e.  c.  29  How.  (1804);  s.  c.  29  How.  (N.  Y.)  Pr. 

(N.  Y.)  Pr.  2G3.  263. 

"^  Yerger  v.   Barz,    56    Iowa,    77  »  Freeman  v.  Schroeder,  43  Barb, 

(1881).  (N.  Y.)  618  (1864);   s.  c.  29  How. 

'  Eicon  V.  VanSchoonhoven,    19  (N.  Y.)  Pr.  263. 

Hun  (N.  Y.)  158  (1879).  «  Haywood  v.  Shaw,  16  How.  (N. 

*  People,  etc.  v.  Bergen,  15  Abb.  Y.)  Pr.  119(1858). 


§  721.] 


EIGHTS    OF  EQUAL   MOETGAGEES. 


841 


protect  such  equality  will  not  be  impaired  by  an  error  into 
which  the  referee  may  have  fallen  in  conducting  the  sale." 
A  senior  mortgagee,  or  one  who  has  acquired  his  prior 
rights  by  subrogation,  can  claim  no  right  to  the  surplus 
moneys  realized  on  the  foreclosure  of  a  junior  mortgage/ 


•  Eleventh  Ward  Savings  Bank  v. 
Hay,  55  How.  (N.Y.)  Pr.  444  (1878). 
In  this  case  three  actions  were  com- 
menced to  foreclose  eeparate  mort- 
gages of  equal  date,  lien,  time  of 
record,  and  amount  of  purchase 
money  upon  the  same  parcel  of  land, 
the  three  mortgages  having  been 
originally  made  to  secure  a  separate 
amount  to  each  of  the  several  gran- 
tors of  the  premises.  The  actions 
were  numbered  1,  3  and  3 ;  three 
separate  judgments  were  entered,  all 
of  which  were  dated  Nov.  20,  and 
were  filed  on  Nov.  22.  The  referee 
appointed  by  said  judgments  to  sell 
the  mortgaged  premises,  offered 
them  for  sale  under  the  judgment  in 
action  No.  1,  and  the  premises  were 
sold  for  $34,500.  Afterwards  the 
same  premises  were  offered  for  sale 
xrnder  judgment  No.  2,  and  were 
struck  off  to  the  same  purchaser  for 
$250,  and  immediately  thereafter 
the  same  premises  were  offered  by 
the  referee  for  sale  under  the  third 
judgment,  and  were  struck  off  to  the 
same  purchaser  for  $250.  On  the 
petition  of  one  of  the  sureties  for  the 
payment  of  said  mortgage  debt, 
asking  that  an  order  be  made  in 
said  actions  directing  the  referee  to 
apply  the  amount  of  the  proceeds  of 
the  sales  under  said  judgments 
equally  to  each,  the  court  held  :  (1) 
that  no  one  of  the  mortgages  had 
any  priority  over  the  others  and  that 
the  referee  should  not  be  permitted 
to  give  precedence  to  one  of  the 
judgments  simply  because  he  found 
it  marked    No.  1  ;    that  the  coiu't 


itaelf  had  no  power  to  give  that  judg- 
ment or  that  mortgage  priority ;  (2) 
that  it  is  the  duty  of  the  court  to 
protect  the  equality  of  liens  where  it 
exists,  and  that,  in  performing  that 
duty,  it  will  look  behind  the  proceed- 
ings of  the  referee  to  the  transaction 
out  of  which  the  liens  arose;  (3)  that, 
as  the  three  mortgages  were  equal 
liens,  equity  required  that  the  money 
received  at  the  sale  should  be  divided 
among  them  equally. 

*  See  Brown  v.  Crookston  Agricul- 
tural Assoc. ,  34  Minn.  545  (1886).  See 
Ward  V.  McNaughton,  43  Cal.  159 
(1872) ;  Soles  v.  Sheppard,  99  111. 
616  (1881).  In  a  recent  caf5e  it 
appeared  that  M.  and  C.  each  owned 
a  one-half  interest  in  a  piece  of  real 
estate  on  which  D.,  as  a  special 
guardian,  held  a  mortgage  executed 
by  M.  At  the  request  of  both  M. 
and  C,  and  upon  their  promise  to 
give  him  a  second  mortgage  upon 
the  same  property,  which  would 
amply  secure  his  claims,  without  an 
order  of  the  court,  D.  released  his 
mortgage  so  that  they  could  raise 
money  on  a  first  mortgage.  This 
mortgage  was  given  to  plaintiff's 
testator  to  secure  $1,500,  C.  signing 
as  surety  for  M.  thereun  ;  before 
another  mortgage  was  given  to  D., 
M.  executed  a  mortgage  upon  his 
undivided  share  to  C.  to  secure  her 
against  loss  on  the  mortgage  given 
to  plaintiff's  testator.  The  mortgage 
subsequently  given  to  D.  was  not 
executed  by  C.  In  proceedings  to 
obtain  the  surplus  arising  ou  the 
foreclosure  of  the  mortgage  given  to 


842  EQUAL    MORTGAGEES    CLAIMING    SURPLUS.     [§  722 

because  his  lien  is  not  disturbed  thereby  and  his  remedy  is 
to  foreclose  his  senior  mortgage.'  And  where  one  purchases 
at  a  judicial  sale  "  subject  to  all  incumbrances,"  he  is  not 
entitled  to  have  the  surplus  moneys  applied  to  the  payment 
of  a  prior  recorded  mortgage,  the  existence  of  which  was 
unknown  to  all  the  parties  because  of  an  error  in  index- 
ing it.* 

§  722.  Several  mortgages  security  for  same  debt,— 
In  a  case  where  the  plaintiff,  who  owned  two  mortgages 
against  the  same  defendant  upon  two  distinct  parcels  of 
land,  brought  actions  to  foreclose  both  mortgages,  and  on 
the  sale  of  one  of  the  parcels  there  was  a  surplus,  and  of  the 
other  a  deficiency,  the  court  held  that  the  surplus  of  the  one 
could  not  be  applied  to  supply  the  deficiency  of  the  other.' 

And  it  has  been  held  that  a  junior  mortgage,  taken  as 
collateral  security  for  another  obligation,  does  not  entitle  the 
mortgagee  to  receive  his  debt  out  of  the  surplus  arising  from 
the  foreclosure  of  a  mortgage  prior  to  his  collateral  mort- 
gage until  he  has  exhausted  his  principal  security.*  It  was 
held  in  Cox  v.  Wheeler,'  however,  that  where  a  mortgagee, 
whose  mortgage  was  payable  in  installments,  sold  the  prem- 
ises for  the  payment  of  one  installment  subject  to  the  future 
installments,  he  was  entitled  to  the  surplus  moneys  arising 
from  the  foreclosure  beyond  the  installment  which  was 
due  and  the  costs  of  the  sale. 


plaintiff's  testator,   the  court   held  was  held  by  the  court,  that  upon  the 

that  as  between  D's  and  C's  mort-  foreclosure  of  the  first  mortgage,  the 

gages,  the  former  was  the  prior  lien  mortgage    executed  by    the  sisters 

and    entitled  to  have    the    surplus  was    entitled   to   priority    over  the 

applied  thereon.     Plumb  v.  Thomp-  judgment  in  the  surplus  moneys. 
Bon,  15  N-.  Y.  Wk.  Dig.  310  (1882).  '  Firestone  v.  State,  100  Ind.  226 

In  Savings  Bank  of  Utica  v.  Wood,  (1884). 
17  Hun  (N.  Y.)  133  (1879),  it  appeared  '  Buttron  v.  Tibbitts,  10  Abb.  (N. 

that  a  nyjrtgage  was  made  for  the  Y.)  N.  C.  41  (1881). 
benefit  of  a  brother  on  two  tracts  of  '  Bridgen  v.  Carhartt,  Hopk.  Ch. 

land,  one  owned  by  himself  and  his  (N.  Y.)  234  (1824).     See  Fliess  v. 

sisters  as  tenants  in  common,  the  Buckley,  24  Hun  (N.  Y.)  514  (1881) 
other  owned  by  himself  individually;  ■*  Soule  v.  Ludlow,  3  Hun  (N.  Y.) 

a  judgment  was  afterwards  obtained  503  (1875) ;  s.  c.  6  T.  &  C.  (N.  Y.) 

against  him,  and  subsequently  the  24.     See  post  %  730. 
sisters  mortgaged  their  interest.     It         ■>  7  Paige  Ch.  (N.  Y.)  248  (1838). 


§§  723-724.]       UifiiEcuiiDED  mortgage.  843 

§  723.  Priority  of  unrecorded  mortg^age  over  subse- 
quent judgment. — In  order  that  mortgages  may  stand  in 
the  relation  of  being  prior  and  subsequent  to  one  another, 
they  must  cover  the  same  land.'  It  has  been  held  that  an 
unrecorded  mortgage  to  secure  future  advances  is  entitled 
to  priority  over  a  subsequently  docketed  judgment,'  unless 
there  has  been  a  fraudulent  intention  on  the  part  of  the 
mortgagee  in  withholding  his  mortgage  from  record.* 

A  mortgage  to  secure  future  indorsements,  if  recorded, 
will  have  priority  over  subsequent  judgments  against  the 
mortgagor,  as  well  for  indorsements  made  after  the  judg- 
ments as  before.*  And  where  a  mortgage  is  given  on  prop- 
erty, while  a  judgment  against  the  mortgagor  is  marked 
"  secured  on  appeal,"  on  which  it  would  otherwise  be  a  lien, 
and  such  judgment  is  thereafter  restored  as  a  lien,  the 
mortgage  will  be  entitled,  as  against  such  judgment,  to 
priority  of  payment  out  of  the  surplus  moneys  arising  on  the 
foreclosure  of  a  prior  mortgage.* 

§  724.     Second    mortgage    and  junior  judgments.  — 

Where  mortgaged  premises  are  sold  under  a  prior  judgment 
and  the  surplus  arising  from  such  sale  is  brought  into 
court,  it  will  belong  to  the  second  mortgagee,  and  subse- 
quent mortgagees  of  the  land  will  be  preferred  to  judg- 
ment creditors  of  the  mortgagor,  if  the  mortgages  are 
based    upon    equitable    matters   which  arose  prior  to  the 


'  Westervelt  v.  Voorhis,  42  N.  J.  the  railway  company,  it  mortgaged 

Eq.  (15  Stew.)  179  (1886).  its  property  to  the  plaintiff's  trust 

*  Thomas  v.  Kelsey,  30  Barb.  (N.  company.  It  was  held  that  the  trust 
Y.)  268  (1859).  See  Savings  Bank  company  knew,  or  was  bound  to 
of  Utica  V.  Wood,  17  Hun  (N.  Y.)  know,  that  the  title  of  the  railway 
133  (1879) ;  Wheeler  v.  Kirtland,  24  company  was  based  on  the  decree 
N.  J.  Eq.  (9  C.  E.  Gr.)  553  (1873).  and  order,   and  that  its  mortgage 

*  In  the  case  of  the  Central  Trust  was  inferior  as  a  lien  to  the  defen- 
Co.  V.  Sloan,  65  Iowa,  655  (1885),  dant's  judgment.  See  Sloan  v.  Cen- 
the  Central  Iowa  Railway  Co.  took  tral  Iowa  R.  Co.,  62  Iowa,  728 
the   title  to  its   property    under  a  (1883). 

decree  and  order  of  the  circuit  court  *  Ackerman  v,  Hunsicker,  85  N. 

of  the  United  States,  which  bound  Y.  43  (1881) ;  8.  c.  39  Am.  Rep.  621. 

it  to  pay  defendant's  claim.     After-  *  Union  Dime  Sav.  Inst.  v.  Dur- 

wards,  but  before  the  defendant  had  yea,  3  Hun  (N.  Y.)  210  (1874\ 
put  his  claim  into  judgment  against 


844  JTDGMENT    LIEN8.  [§§725-726. 

docketing  of  the  judgments,  notwithstanding  the  fact  that 
the  judgments  were  recovered  before  the  execution  of  the 
second  and  subsequent  mortgages;  because,  a  judgment 
creditor  is  entitled  only  to  such  rights  in  the  real  estate 
as  the  judgment  debtor  rightfully  possessed  at  the  time  the 
judgment  was  perfected.' 

§  725.  Preference  of  mortgage  over  mechanic's  lien.— 
In  the  distribution  of  the  proceeds  arising  from  the  sale  of 
mortgaged  premises,  a  mortgage  executed  prior  to  the  per- 
formance of  work  by  means  of  which  a  mechanic  secures  a 
lien  on  the  premises,  is  to  be  preferred  by  the  referee  to  such 
mechanic's  lien.* 

§  726.  Lien  of  judgment  on  surplus.— A  judgment 
recovered  against  the  owner  of  the  equity  of  redemption  in 
mortgaged  premises  prior  to  a  sale  on  foreclosure,  will  be 
a  lien  on  the  surplus  moneys  arising  from  such  sale;  but  if 
the  judgment  is  not  perfected  until  after  the  sale  is 
made,  although  docketed  before  the  surplus  moneys  are 
distributed,  it  will  not  be  a  lien  on  such  surplus.*  A 
mistake  in  docketing  a  judgment,  by  stating  erroneously 
the  date  on  which  it  was  recovered,  has  been  held  not 
to  affect  its  lien,  even  against  subsequent  judgment  cred- 
itors.* 

»  Tallman  v.  Farley,  1  Barb.  (N.  T.)  298  (1874) ;  Snyder  v.  Stafford, 

Y.)  280  (1847).     As  to  when  second  11   Paige    Ch.   (N.  Y.)   71   (1844) ; 

mortgagees  have  priority  over  judg-  German  Savings  Bank  v.  Carring- 

nient  creditors,  whose  judgments  are  ton,    14    N.    Y.    Week.     Dig.    475 

prior  to  the  recording  of  the  mort-  ( 1882 ) ;   affirmed    89   N.  Y.    632  ; 

gage,  see  Tallman  v.  Farley,  1  Barb.  Dempsey  v.  Bush,  18  Ohio  St.  376 

(N.  Y.)  280  (1847) ;  Ray  v.  Adams,  (1868).     Judgments  over  ten  years 

4  Hun  (N.  Y.)  332  (1875) ;   Cook  v.  old  are  not  liens  on  the  surplus. 

Kraft,   3   Lans.   (N.   Y.)   512,   615  Floyd  v.   Clark,   2    Law  Bull.   36 

(1871).  (1880). 

*  Oppenheimer  v.  Walker,  3  Hun         *  Fish  v.  Emerson,  44  N.  Y.  376 

(N.  Y.)  30  (1874).  (1871) ;    Sears  v.  Burnham,  17  N. 

"Denbam  v.  Cornell,   67  N.  Y.  Y.   445  (1858);   Sears  v.   Mack,   2 

556,  562  (1876) ;  Sweet  v.  Jacocks,  6  Bradf.  (N.  Y.)  394  (1853) ;  Edwards 

Paige  Ch.  (N.  Y.)  355  (1837) ;  s.  c.  v.  Sams,  3  111.  App.  168  (1879j.   See 

31  Am.  Dec.  352 ;  Douglass  v.  Hus-  Neele  v.  Berryhill,  4  How.  (N.  Y.) 

ton,  6  Ohio,  156  (1833).     See  Shep-  Pr.  16  (1849) ;  Hodgen  v.  Guttery, 

ard  V.  O'Neil,  4  Barb.  (N.  Y.)  125  58  111.  431  (1871) ;  Stedman  v.  Per- 

(1848) ;  Hull  v.  Spratt,  1  Hun  (N.  kins,  42  Me.  130  (1856). 


§  727.]  LIEN    OF   JUDGaiENT    ON    SURPLUS.  845 

A  judgment  creditor,  who  is  properly  made  a  defendant 
while  his  judgment  is  alive,  will  not  lose  his  right  to  share  in 
the  surplus  by  the  fact  that  the  lien  of  his  judgment  expires 
pending  the  action.'  But  a  judgment  creditor,  whose  judg- 
ment was  not  a  Hen  on  the  mortgaged  premises,  will  have  no 
right  to  share  in  the  proceeds  of  a  sale  of  the  decedent's  real 
estate.*  Thus,  the  vendee  of  land,  who  in  an  action  for 
specific  performance,  has  recovered  a  judgment  for  the 
purchase  money  paid,  which  was  adjudged  to  be  a  lien, 
from  the  time  of  filing  his  lis  pendens,  on  the  surplus 
arising  from  a  sale  made  upon  the  foreclosure  of  a  prior 
mortgage,  is  entitled  to  priority  in  the  payment  of  his 
judgment  out  of  such  surplus,  as  against  a  judgment  creditor 
whose  judgment  was  recovered  after  the  filing  of  such  lis 
pendens.* 

A  judgment  creditor,  who  purchases  mortgaged  premises 
at  an  execution  sale  under  his  judgment,  is  entitled  to  the 
surplus  arising  on  a  sale  made  under  a  prior  mortgage,  in 
preference  to  the  holder  of  a  junior  judgment.*  But  a 
mortgagee,  on  recovering  a  judgment  for  deficiency  against 
his  mortgagor's  administrator,  can  not  maintain  an  action 
to  have  his  judgment  declared  a  lien  upon  the  surplus 
moneys  arising  upon  the  foreclosure  of  a  mortgage  on  other 
lands  given  by  the  same  mortgagor  to  another  mortgagee.' 
The  only  remedy  of  such  a  judgment  creditor,  besides  that 
against  the  personalty  in  the  administrator's  hands,  is  an 
action  against  the  mortgagor's  heirs  or  devisees ;  if  they 
are  insolvent,  the  court  may  direct  the  surplus  to  be  held 
and  applied  in  satisfaction  of  the  judgment.* 

§  727.  What  interests  bound  by  lien  of  judg-ment. — 
The  only  interest  bound  by  a  judgment  lien  is  the  actual 


'  Dempsey  v.  Bush,  18  Ohio  St  *  Shepard  v.  O'Neil,  4  Barb.  (N. 

376  (1868).  T.)  125  (1848) ;  Snyder  v.  Stafford, 

»  Davis  V.  Davis,  4  Redf.  (N.  Y.)  11  Paige  Ch.  (N.  Y.)  71  (1844). 

355  (1879).  *  Fliess  v.  Buckley,  24  Hun  (N. 

»  Hull  V.  Bpratt,   1  Hun  (N.  Y.)  Y.)  514  (1881) ;  aff'd  90  N.  Y.  291. 

298  (1874).      But  he  is  not  entitled  •  Fliess  v.   Buckley,  24  Hun  (N. 

to  interest  thereon  from  the  time  of  Y.)  514    (1881) ;    aff'd    90    N.   Y. 

fi'ing  his  lis  pendent.  291.     See  ante  %  216. 


846  LIEN   OF   JUDGMENT   ON   SURPLUS.  [§  728. 

interest  which  the  debtor  has  in  the  property  at  the  time 
the  judgment  is  docketed ;  when  the  judgment  debtor  has 
no  interest  in  the  premises  other  than  the  mere  naked  legal 
title,  the  lien  of  the  judgment  will  not  attach.'  Thus,  if 
a  judgment  debtor  is  in  possession  merely  under  a  con- 
tract to  purchase,  a  court  of  equity  will  permit  the  actual 
owner  of  the  premises  to  show  that  the  judgment  debtor 
has  no  real  interest  therein. 

A  lien  thus  acquired  constitutes  no  legal  interest  in  the 
land  itself,  but  is  merely  a  general  claim  as  distinguished 
from  a  specific  lien  securing  a  preference  on  subsequently 
acquired  interests  in  the  property  ;*  still,  a  court  of  equity 
will  always  protect  the  equitable  rights  of  third  parties 
existing  at  the  time  the  judgment  lien  attaches  to  the 
property.* 

§  728.  Satisfying  judgments  from  surplus. — Where 
there  are  judgment  liens  upon  the  mortgaged  premises  when 
sold,  such  liens  are,  by  the  sale,  transferred  to  the  surplus 
and  must  be  satisfied  therefrom  in  the  order  of  their 
priority,  before  the  owner  of  the  equity  of  redemption  will 
be  entitled  to  receive  any  part  thereof  ;*  such  lienors  will  be 


'  Hays   V.    Reger,    102  Ind.   527  T.)  280  (1828) ;  Snyder  v.   Martin, 

(1885) ;    s.  c.   3    West.    Rep.    308  ;  17  W.  Va.  276  (1880) ;  8.  c.  41  Am. 

Thomas  v.  Kennedy,  24  Iowa,  397  Rep.  671.     See  Morris  v.  Mowatt,  2 

(1868) ;    8.  C.  95    Am.    Dec.    740  ;  Paige  Ch.  (N.  Y.)  586  (1831) ;  Coster 

Brown  v.  Pierce,  74  U.  S.  (7  Wall.)  v.   Bank  of   Georgia,   24    Ala.    37 

205  (1868) ;  bk.  19  L.  ed.  134.     See  (1853) ;    O'Rourke  v.  O'Connor,  39 

Wheeler  v.  Wheedon,  9  How.  (N.  Cal.  442  (1870) ;  Orth  v.  Jennings,  8 

Y.)  Pr.  303  (1853).  Blackf.  (Ind.)  420  (1847) ;  Churchill 

»  White  V.  Carpenter,  2  Paige  Ch.  v.  Morse,  23  Iowa,  229  (1867) ;  s.  c. 

(N.  Y.)  217  (1830) ;  Baker  v.  Mor-  92  Am.  Dec.  422 ;  Walke  v.  Moody, 

ton,  79  U.  S.  (12  Wall.)  158  (1870) ;  65  N.  C.   599  (1871) ;    Shryock  v. 

bk.  20  L.  ed.  265.     See  Buchan  v.  Waggoner,  28  Pa.  St.  430  (1857) ; 

Sumner,  3  Barb.  Ch.  (N.  Y.)  165  Cover   v.    Black.    1    Pa.    St.    493 

(1847) ;  s.  c.  47  Am.  Dec.  305  ;  Ells  (1845) ;  Ashe  v.  Livingston,  2  Bay 

V.  Tousley,  1  Paige  Ch.  (N.  Y.)  280  (S.  C.)  80  (1797) ;  Withers  v.  Carter, 

(1828) ;  Massingill  v.  Downs,  48  U.  4  Gratt.  (Va.)  407  (1848) ;    s.  c.  50 

S.  (7  How.)  767  (1849) ;  bk.   12  L.  Am.  Dec.  78 ;  Brown  v.  Pierce,  74 

ed.   906 ;    Conard  v.   Atlantic  Ins.  U.  S.  (7  Wall.)  205  (1868) ;  bk.  19 

Co.,  26  U.  S.  (1  Pet.)  443  (1828) ;  L.  ed.  134. 
bk.  7  L.  ed.  213.  *  Eddy  v.  Smith,  13  Wend.  (N. 

»  Ells  V.  Tousley,  1  Paige  Ch.  (N.  Y.)  488  (1835). 


§  729.]  LIEN    OF   JUDGMENT   ON    SURPLUS.  847 

entitled  to  the  payment  of  their  claims  before  a  widow 
can  receive  an  assignment  of  her  dower  from  the  sur- 
plus.* 

Where  there  is  a  surplus  fund  in  court  arising  from  a  fore» 
closure  against  the  executors  or  administrators  of  a  deceased 
mortgagor,  a  creditor  who  has  obtained  a  proper  decree  in  a 
surrogate's  court  will  be  preferred  in  its  distribution  to 
legatees  claiming  the  fund.* 

§  729.  Specific  lien  of  judgment  and  executory  con- 
tract.— Judgment  creditors  who  obtain  a  specific  lien  upon 
the  land  before  foreclosure,  are  entitled  to  priority  of  pay- 
ment out  of  the  surplus  according  to  the  dates  of  their 
respective  judgments.*  Where  mortgaged  premises  have 
been  sold  upon  execution  under  a  judgment  junior  to  the 
mortgage,  and  the  time  for  redemption  has  not  expired  at 
the  time  of  the  foreclosure  sale,  the  general  lien  of  the 
judgment  will  become  a  specific  lien  upon  the  surplus  to  the 
extent  of  the  purchaser's  bid  on  the  execution  sale,  and 
of  the  inter£st  thereon.* 

But  where  a  mortgagee  obtained  a  decree  of  foreclosure, 
by  virtue  of  which  the  property  was  sold,  and  being 
also  a  judgment  creditor  of  the  mortgagor,  had  an  execu- 
tion levied  on  the  mortgaged  premises,  to  which,  however, 
the  mortgagor  had  no  title  at  the  time  of  the  levy,  it  was 
held  that  such  judgment  creditor  was  not  entitled  to  partici- 
pate in  the  surplus,  even  though  the  mortgagor,  during  the 


'  New    York    Life    Ins.    Co.    v.  (1842) ;  Tennant  v.  Stoney,  1  Rich. 

Mayer,  19  Abb.  (N.  Y.)  N.  C.  92  (S.  C.)  Eq.  223  (1845) ;  s.  c.  44  Am. 

(1887).  Dec.  213  ;  Fiemoult  v.  Dedire,  1  P. 

»  Clark's  Case,    15  Abb.   (N.  Y.)  Wms.  429  (1718) ;  Finch  v.  Earl  of 

Pr.  227  (1862).  Winchelsea,  1  P.  Wms.  277(1715) ; 

*  Purdy  V.  Doyle,  1  Paige  Ch.  (N.  Lovegrove  v.  Cooper,  3  Sm.  &  G. 

Y.)  558  (1829).   As  to  the  proposition  271   (1854);  Wilson  v.   Fielding,   2 

that  specific  liens,  whether  legal  or  Vern.  763  (1718) ;  s.  c.  10  Mod.  426; 

equitable,    secured    on    mortgaged  Adams  Eq.  256  ;  1  Story  Eq.  Jur. 

premises  before    the  sale,   will    be  §§  551,  553  ;  2  White&T  &  L.  Cas. 

respected  by  courts  of  equity,   see  pt.  1,  290. 

Codwise  v.  Gelston,  10  Johns.  (N.  ■*  Snyder    v.    Stafford,   11    Paige 

Y.)    522    (1812);    Atlas    Bank    v.  Ch.  (N.  Y.)  71  (1844) 
Nahant  Bank,  44  Mass.  (3  Met.)  581 


848  JUDGMENT   BY   CONTESSION.      [§§  730-731. 

pendency  of  the   foreclosure   suit,  became   the   owner  of 
the  equity  of  redemption.* 

It  is  thought  that  an  agreement  to  execute  a  mortgage  on 
particular  lands  described  therein,  is  in  equity  a  specific 
lien  on  such  lands,  and  that  in  the  distribution  of  the 
surplus  arising  on  a  sale  under  a  prior  mortgage,  it  will  be 
preferred  to  subsequent  judgment  liens.*  While  an  oral 
agreement  to  execute  a  mortgage  is  executory  and  within  the 
statute  of  frauds  and  not  enforceable,  yet  if  the  promisor 
has  actually  completed  the  agreement  by  properly  executing 
and  delivering  a  formal  mortgage,  it  will  become  as  effective 
for  all  purposes  as  if  it  had  been  reduced  to  writing 
originally.* 

§  730.  Judgment  by  confession  as  an  indemnity. — A 
judgment  by  confession,  given  to  secure  and  indemnify  a 
party  as  a  surety,  is  a  lien  upon  the  equity  of  redemption 
of  the  defendant's  mortgaged  premises,  and  will  be  entitled 
to  payment  out  of  the  surplus  in  the  order  of  its  lien, 
although  the  party  may  not  have  been  damnified.  The 
security  will  be  transferred  from  the  equity  of  redemption 
to  the  surplus  arising  on  the  sale,  and  its  lien  can  be 
discharged  only  by  the  full  discharge  of  the  surety  from 
all  liability.* 

§  731.  Judgment  against  sheriff. — It  has  been  held  that 
where  a  judgment  creditor  is  entitled  to  the  surplus,  or 
a  part  thereof,  the  fact  that  he  has  recovered  a  judgment 
against  the  sheriff  for  not  returning  his  execution  upon  the 
judgment  will  not  affect  his  claim  to  the  surplus,  nor  the 
claim  of  his  assignee  of  the  first  judgment,  where  such 
judgment  has  been  assigned,  in  the  absence  of  a  showing  that 
the  assignment  was  made  for  the  benefit  of  the  sheriff;  the 


»  Smith  V.  Smith,  13  Mich.  258  Burdick  v.  Jackson,  7  Hun.  (N.  T.) 

(1865).  490  (1876) ;    Arnold    v.   Patrick,   6 

»  See  Otis  v.  SiU,  8  Barb.  (N.  Y.)  Paige  Ch.  (N.  Y.)  310  (1887).     See 

119  (1849) ;  White  v.  Carpenter,  2  Siemon  v.  Schurck,  29  N.  Y.  598 

Paige  Ch.  (K  Y.)  217  (1830).  (1864). 

■Dodge    V.    Wellman,    1    Abb.  '♦Lansingv.  Clapp,  3E[ow.  (N.  Y.) 

App.    Dec.    (N.   Y. )   512    (1869);  Pr.  238  (1847).     See  an^e  §  726. 


§§  732-733.]       JUDG3IENT   BY    CONFESSION.  849 

mere  fact  that  the  assignee  purchased  the  judgment  at  the 
request  of  the  sheriff  does  not  show  that  it  was  purchased 
for  the  sherifT's  benefit.' 

§  732.  Judgment  confessed  by  one  member  of  a  firm. 
— A  judgment  confessed  by  two  members  of  a  firm  of  three, 
for  a  partnership  debt,  has  a  priority  of  lien  over  a  subse- 
quent judgment  recovered  against  all  the  members  of  the 
firm.' 

In  a  proceeding  under  the  general  rules  of  practice  of  the 
New  York  supreme  court,'  to  ascertain  the  priorities  of 
the  several  liens  upon  the  surplus  moneys  arising  upon  the 
foreclosure  of  a  mortgage,  the  rule  in  equity  as  to  the  appli- 
cation of  partnership  and  individual  property  among  firm 
and  individual  creditors  does  not  apply,  but  the  rule  of  law 
controls  which  gives  a  judgment  creditor  of  the  firm,  who 
has  acquired  a  lien  upon  the  lands  of  a  partner  by  docketing 
the  judgment,  a  claim  upon  the  surplus  superior  to  the 
claim  of  a  junior  judgment  creditor  of  the  partner.* 

§  733.  Married  woman's  equitable  right  to  surplus. — 
It  has  been  said  that  upon  the  foreclosure  of  a  mortgage 
upon  real  property  belonging  to  a  married  woman,  the 
surplus  brought  into  court  is  subject  to  its  jurisdiction  as 
a  court  of  equity ;  and  that,  independently  of  the  married 
woman's  acts,*  the  court  will  not  allow  the  fund  to  be 
reached  by  the  husband's  creditors  without  first  making 
suitable  provision  for  the  wife  and  her  children.'  It  seems 
that  where  the  surplus  is  small  and  not  more  than  sufificient 
to  support  her,  the  whole  thereof  should  be  paid  to  the  wife.' 


'  Lansing  v.  Clapp,  8  How.  (N.  •  See  Udall  v.  Kenney,  3  Cow.  (N. 

Y.)  Pr.  238  (1847).  Y.)  590  (1824) ;  Sleight  v.  Read,  18 

»  Stevens  v.  Bank  of  Central  N.  Barb.  (N.  Y.)  159  (1854) ;  s.  c.   9 

Y.,  31  Barb.  (N.  Y.)  290  (1859).  How.  (N.  Y.)  Pr.  278  ;  Dumond  v. 

»  N.  Y.  Supreme  Court  Rule  64.  Magee,  4  Johns.   Ch.  (N,  Y.)  318 

<Meech    v.    Allen,     17    N.    Y.  (1820);    Wiswall  v.   Hall,   3  Paige 

300  (1858) ;  New  York  Life  Ins.  Co.  Ch.  (N.  Y.)  313  (1832) ;  Mumford  v. 

V.  Mayer,  19  Abb.  (N.  Y.)  N.  C.  92  Murray,   1  Paige  Ch.   (N.  Y.)  620 

(1887) ;  Averill  v.  Loucks,  6  Barb.  (1829). 

(N.  Y.)  470  (1849),  '  Sleight  v.  Read,  18  Barb.   (N. 

'  N.  Y.  Laws  of  1848,  chap.  200 ;  Y.)  159  (1854) ;  s.  c.  9  How.  (N.  Y.) 

1849,  chap.  375.  Pr.  278. 

(54) 


850 


DOWER   IN    SURPLUS. 


[§  734. 


§  734.  Dower  in  surplus  moneys. — Since  surplus  moneys 
arising  upon  the  sale  of  mortgaged  lands  take  the  place  of 
the  lands  for  parties  having  liens  or  vested  rights  therein,  the 
widow  of  the  owner  of  the  equity  of  redemption  is  entitled 
to  dower  in  the  surplus  the  same  as  she  was  in  the  land 
before  the  sale.'  But  where  she  unites  with  her  husband 
in  the  execution  of  a  mortgage  on  real  estate  belonging  to 
him,  and  the  property  is  afterwards  sold  under  such  mort- 
gage, she  will  be  entitled  to  dower  only  in  the  surplus  after 
the  payment  of  the  mortgage,'  because  her  mortgage  will 
operate  to  its  extent  to  extinguish  her  right.* 

The  right  of  the  wife  of  a  mortgagor  to  dower  in  the 
surplus  remaining  after  discharging  the  mortgage  lien,  was 
once  doubted  in  those  cases  where  the  husband  survived  the 
foreclosure  sale  but  died  before  the  distribution  of  the  sur- 
plus ;*  but  it  is  now  well  settled  in  New  York'  and  in  other 


*  See  Matthews  v.  Duryee,  17 
Abb.  (N.  T.)  Pr.  256  (1864);  affirmed 

4  Keyes  ( N.  Y. )  525 ;  Vartie  v. 
Underwood,  18  Barb.  (N.  Y.)  564 
(1854) ;  Denton  v.  Nanny,  8  Barb. 
(N.  Y.)  618  (1850) ;  Titus  v.  Neilson, 

5  Johns.  Ch.  (K  Y.)  458  (1821); 
Tarbele  v.  Tarbele,  1  Johns.  Ch.  (N. 
Y.)  45  (1814);  Elmendorf  v.  Lock- 
wood,  4  Lans.  (N.  Y.)  393  (1871) ; 
Kling  V.  Ballentine,  40  Ohio  St.  394 
(1883). 

"  Smith  V.  Jackson,  2  Edw.  Ch. 
(N.  Y.)  28  (1834) ;  Titus  v.  Neilson, 
5  Johns.  Ch.  (N.  Y.)  458  (1821); 
Hawley  v.  Bradford,  9  Paige  Ch. 
(N.  Y.)  200  (1841) ;  8.  c.  37  Am. 
Dec.  390 ;  Bank  of  Commerce  v. 
Owens,  31  Md.  320  (1869) ;  s.  c.  1 
Am.  Rep  63 ;  Hinchman  v.  Stiles, 
9  N.  J.  Eq.  (1  Stockt.)  361  (1853) ; 
Hartshorne  v.  Hartshorne,  2  N.  J. 
Eq.  (1  H.  W.  Gr.)  349  (1840). 

*  Elmendorf  v.  Lockwood,  4  Lans. 
(N.  Y.)  393  (1871).  In  the  case  of 
New  York  Life  Ins.  Co.  v.  Mayer, 
19  Abb.  (N.  Y.)  N.  C.  92  (1887),  it 


was  questioned  whether  a  claim  of 
the  wife  to  dower,  not  being  a 
vested  interest  in  the  lands  or  a  lien 
upon  them,  which  is  cut  off  by 
foreclosure,  can  be  entertained  in  pro- 
ceedings for  the  distribution  of  the 
surplus,  citing  Dunning  v.  Ocean 
Nat.  Bank,  61  N.  Y.  497  (1875) ;  8. 
c.  10  Am.  Rep.  293;  Mutual  Life  Ins. 
Co.  of  N.  Y.  V.  Truchtnicht,  3  Abb. 
(N.  Y.)  N.  C.  133  (1877) ;  Matthews  v. 
Duryee,  45  Barb.  (N.  Y.)  69  (1865) ; 
German  Savings  Bank  v.  Sharer,  25 
Hun  (N.  Y.)  409  (1881);  Fliess  v. 
Buckley,  24  Hun  (N.  Y.)  514  (1881) ; 
aff'd  in  90  N.  Y.  286. 

*  Frost  V.  Peacock,  4  Edw.  Ch. 
(N.  Y.)  678  (1846). 

»  Malloney  v.  Horan,  49  N.  Y.  Ill 
(1872);  8.  c.  10  Am.  Rep.  335; 
Matthews  v.  Duryee,  45  Barb.  (N. 
Y.)  69  (1865);  aff'd  3  Abb.  App. 
Dec.  (N.  Y.)  220 ;  17  Abb.  (N.  Y.) 
Pr.  256  ;  Denton  v.  Nanny,  8  Barb. 
(N.  Y.)  618  (1850) ;  Blydenburgh  v. 
Northrop,  13  How.  (N.  Y.)  Pr.  289 
(1856) ;  Titus  v.  Neilson,  5  Johns. 


§  735.]  DOWER  IN   SURPLUS.  851 

states,*  that  where  a  widow  joins  her  husband  in  a  mortgage 
on  land  of  which  he  was  seized,  she  is  entitled  to  dower  in 
the  surplus  moneys  arising  from  the  foreclosure  sale.  She 
will  have  a  right  of  dower  in  the  equity  of  redemption 
merely,  however,  and  not  in  the  whole  premises.* 

It  is  said  that  if  a  husband  dies  after  a  foreclosure  sale  and 
the  distribution  of  the  surplus,  the  wife  can  not  claim  an 
interest  in  such  surplus,  but  that  if  he  dies  after  the  sale 
and  while  the  surplus,  or  any  part  of  it,  is  within  the  control 
of  the  court,  she  will  be  dowable  of  the  surplus  so  far  as  her 
right  can  be  equitably  paid  from  the  portioft  remaining 
undistributed.  If  the  husband  is  living,  one-third  of  such 
surplus  should  be  invested  for  her  during  their  joint  lives; 
if  he  is  dead,  she  will  be  entitled  to  the  income  of  one-third 
thereof  for  life.* 

A  widow  is  dowable  only  in  that  portion  of  the  surplus 
which  still  remains  in  the  hands  of  the  court  at  the  time  her 
application  therefor  is  made ;  if  any  of  those  interested  in 
the  surplus  have  received  their  portion,  they  can  not  be 
called  upon  to  refund  it ;  neither  can  those  who  have  not 
received  their  share  be  required  to  suffer  loss  by  reason  of 
the  demand  made.* 

§  735.  Inchoate  right  of  dower. — Some  courts  have 
gone  to  the  extent  of  protecting  the  inchoate  right  of  dower 
of  the  wife  during  coverture  in  the  surplus  from  a  mort- 
gage sale  by'permitting  her,  as  against  subsequent  lienors, 
to  have  one-third  of  such  surplus  invested  for  her  benefit,  and 


Ch.   (N.  Y.)   453  (1821);    Bell   v.  Bank  of  Ohio  v.  HintoD,  21  Ohio 

Mayor,  etc.  of  New  York,  10  Paige  St.  509  (1871). 

Ch.   (N.  Y. )  49  (1843);    Hawley  «  Hawley  v.   Bradford,  9   Paige 

V.  Bradford,   9  Paige  Ch.  (N.  Y.)  Ch.  (N.  Y.)  200  (1841). 

200  (1841);    8.   0.    37    Am.    Dec.  » Vartie  v.  Underwood,  18  Barb. 

390.  (N.  Y.)  561  (1854);  Denton  v.  Nanny, 

>  Hinchman  v.  Stiles,  9  N.  J.  Eq.  8  Barb.  (N.  Y.)  618  (1850) ;  Matthews 

(1   Stockt.)  454  (1853);    Taylor   v.  v.   Duryee,   4  Keyes  (N.   Y.)    525 

Fowler,  18  Ohio,  567  (1849) ;  8.  c.  (1868).    In  Indiana,  Iowa  and  possi- 

51  Am.  Dec.  469;  Rands  v.  Kendall,  bly  some  other  states,  she  is  entitled 

15  Ohio,  671  (1846) ;  Fox  v.  Pratt,  to  one-third  in  fee. 

27  Ohio  St.  512  (1875) ;  Culver  v.  *  State  Bank  of  Ohio  v.  Hinton, 

Harper,  27  Ohio  St.  464  (1875) ;  State  21  Ohio  St.  509  (1871). 


852  INCHOATE   DOWER   EN   SURPLUS.  [§  736. 

kept  invested  during  the  joint  lives  of  herself  and  her 
husband,  the  interest  to  be  subject  to  the  order  of  the 
court  during  the  life  of  the  husband  and  to  be  paid  to  b«r 
during  her  life,  in  case  she  survives  him.* 

In  the  case  of  the  New  York  Life  Insurance  Company  v. 
Mayer,*  it  was  held  that  the  claim  of  the  wife  of  a  mortgagor, 
who  joined  in  the  execution  of  the  mortgage,  upon  the  surplus 
moneys  arising  on  a  foreclosure,  for  the  value  of  her  inchoate 
right  of  dower,  is  superior  to  the  claims  of  judgment  creditors 
of  the  mortgagor,  notwithstanding  the  fact  that  there  was  a 
provision  in  the  mortgage  for  the  return  of  the  surplus,  if 
any,  to  the  mortgagor,  his  heirs  or  assigns." 

§  736.  Investment  of  dower  in  surplus— Payment  of 
gross  sum. — It  is  thought  that  where  the  widow  of  a 
mortgagor,  or  owner  of  the  equity  of  redemption,  who  has 
answered  as  such  and  submitted  to  the  decree  of  the  court, 
is  entitled  to  dower  in  the  surplus  proceeds  of  the  sale 
of  the  mortgaged  premises,  one-third  thereof  may  be 
ordered  to  be  invested  at  interest  for  her  benefit  ;*  or,  under 
the  provisions  of  the  New  York  Code  of  Civil  Procedure* 
and  the  rules  of  the  supreme  court,*  such  widow  may 
consent  to  accept  a  gross  sum  in  lieu  of  the  annual  interest 


•  Vartie  v.  Underwood.   18  Barb.  Underwood,  18  Barb.  (N.  Y.)  561 

(N.  Y.)  561  (1854).    See  Malloney  v.  (1854) ;   Denton  v.  Nanny,  8  Barb. 

Horan,  49  N.  Y.  Ill  (1872) ;  8.  c.  10  (N.    Y.)  618  (188t));    Douglas  v. 

Am.  Rep.  335  ;  Mills  v.VanVoorhies,  Douglas,  11  Hun  (N.  Y.)  406  (1877); 

20  N.  Y.    413   (1859) ;    Denton    v.  Jackson  v.  Edwards,  7  Paige  Ch. 

Nanny,  8  Barb.  (N.  Y.)  618  (1850) ;  (N.  Y.)  386  (1839) ;  Hawley  v.  Brad- 

Blydenburgh  v.  Northup,  13  How.  ford,  9  Paige  Ch.  (N.  Y.)  200  (1841). 

(N.  Y.)  Pr.  289  (1856) ;  Matthews  v.  Contra,   Aikman  v.  Harsell,  98  N. 

Duiyee,  4  Keyes  (N.  Y.)  525  (1868) ;  Y.  186  (1885) ;   Moore  v.  Mayor,  8 

Vreeland  v.  Jacobus,  19  N.  J.  Eq.  N.  Y.  110  (1853) ;  Frost  v.  Peacock, 

(4  C.  E.  Gr.)  231  (1868).  4  Edw.   Ch.   (N.   Y.)    678   (1846) ; 

« 19  Abb.  (N.  Y.)  N.  C.  92  (1887).  Titus  v.  Neilson,  5  Johns.  Ch.  (N. 

«  See  Simar  v.  Canaday,  53  N.  Y.  Y.)  453  (1821) ;  Bell  v.  Mayor,  &c., 

298  (1873) ;  8.  c.  13  Am.  Rep.  523  ;  10  Paige  Ch.  (N.  Y.)  55  (1843). 

Mills  V.  VanVoorhies,  20  N.  Y.  412  *  Tabele  v.  Tabele,  I  Johns.  Ch. 

(1859) ;  Matthews  v.  Duryee,  3  Abb.  (N.  Y.)  45  (1814). 

(N.  Y.)  App.  Dec.  220  (1868),  affirm-  "  N.  Y.   Code  Civ.  Proc.  §  2793. 

ing  45  Barb.  (N.  Y.)  69 ;  s.  c.  17  «  N.  Y.   Supreme  Court  Rule  71. 
Abb,   (N.  Y.)  Pr.  256;    Vartie  v. 


§^  737-738.]   PAYING  GEOSS  SUM  FOR  DOWER.  853 

or  income  for  life  from  the  one-third  so  invested,  and  such 
gross  sum  shall  be  estimated  according  to  the  then  value  of 
an  annuity  of  five  per  centum  on  the  principal  sum,  during 
the  probable  period  of  her  life  as  ascertained  from  the  Ports- 
mouth or  Northampton  annuity  tables.' 

Where  the  husband  is  living,  the  value  of  the  wife's  inchoate 
right  of  dower  is  ascertained  by  computing  the  value  of  an 
annuity  for  her  life,  in  one-third  of  the  proceeds  of  the  estate 
to  which  her  inchoate  right  of  dower  attaches,  and  deduct- 
ing therefrom  the  value  of  a  similar  annuity  for  his  life; 
the  difference  between  these  two  sums  will  be  the  present 
value  of  her  inchoate  right  of  dower.* 

§  737.  Homestead  right  in  surplus. — It  has  been  held 
that  where  a  mortgaged  homestead  is  sold  for  more  than 
enough  to  pay  the  mortgage  debt,  the  surplus,  to  the  extent 
allowed  by  statute  for  a  homestead,  should  be  delivered  to 
the  debtor  for  the  purchase  of  another  homestead  ;  in  case 
of  his  death,  such  portion  should  be  invested  in  a  home  for 
his  widow  or  his  children.*  It  is  believed  where  a  sale 
is  made  under  a  mortgage  containing  a  waiver  of  exemption, 
that  the  mortgagor  is,  nevertheless,  entitled  to  the  exemption 
allowed  by  law  to  heads  of  families  out  of  the  surplus 
proceeds  of  such  sale,  as  against  subsequent  judgment 
creditors.* 

§  738.  Where  claim  of  collateral  assignee  less  than 
mortgage. — A  mortgagee  holding  several  notes  secured 
by  mortgage  may  assign  the  security  to  an  assignee  of  one  of 
the  notes,  so  as  to  give  him  a  preference  in  the  application 


>  See  Schell  v.  Plumb,  55  N.  Y.  » Jackson  v.  Edwards,   7    Paige 

592  (1874) ;  8.  c.  16  Abb.  (N.  Y.)  Pr.  Ch.  (N.  Y.)  386,  408  (1839).      See 

N.  S.   19 ;    46  How.    (N.   Y.)  Pr.  Doty  v.  Baker,  11  Hun  (N.  Y.)  225 

19  ;  Winslow  v,  McCall,  32  Barb.  (1877) ;  Gordon  v.  Tweedy,  74  Ala. 

(N.Y.)  249  (1860);  Davis  v.  Standish,  232  (1883);  8.  C.  49  Am.  Rep.  813. 

26  Hun  (N.Y.)  616  (1882);  Tabelev.  »  McTaggert   v.  Smith,  14  Bush 

Tabele,   1  Johns.   Ch.   (N.   Y.)  45  (Ky.)  414  (1878). 

( 1814 ) ;    Matthews    v.    Duryee,    4  *  Quinn's  Appeal,  86  Pa.  St.  447 

Keyes  (N.  Y.)  525  (18G8) ;  Wager  v.  (1878) ;  Hill  v.  Johnson,  29  Pa.  St. 

Schuyler,    1    Wend.    (N.   Y.)    553  362(1857). 
(1828). 


854        COLLATERAL  ASSIGNEE'S  CLAIM  TO  SURPLUS.  [§  739. 

of  the  proceeds  realized  from  a  sale  of  the  mortgaged  prem- 
ises ;  and  where  the  assignment  of  the  mortgaged  premises 
purports  to  "  bargain,  sell  and  assign  "  the  same  to  secure 
the  payment  of  the  note  so  assigned,  it  is  a  transfer  of  the 
entire  legal  estate  or  interest  of  the  mortgagee  therein,  and 
he  will  retain  only  an  equitable  interest  in  the  surplus  after 
satisfying  the  amount  due  to  the  assignee.' 

Where  a  bond  and  mortgage  are  assigned  as  collateral 
security  for  a  loan,  with  an  agreement  on  the  part  of  the 
lender,  that  on  payment  of  the  mortgage  he  will  account  for 
the  excess  of  the  principal  over  and  above  the  amount 
of  the  loan,  and  the  mortgage  is  foreclosed  by  the  lender 
without  making  the  borrower  a  party  to  the  action  and  the 
premises  are  bid  in  by  the  lender,  the  equitable  interest  which 
the  borrower  had  in  the  mortgage  will  attach  to  the  land, 
ajid  he  will  be  entitled  to  the  surplus  in  case  of  a  sale 
thereof  by  the  lender  for  more  than  the  amount  of  his 
claim.* 

If  one  mortgagor  is  surety  for  another,  where  they  own 
undivided  shares  in  the  property,  the  surety  will  have  a 
right  to  require  that  the  share  of  his  principal  shall  be  sold 
first  on  a  foreclosure,  if  enough  can  be  realized  in  that  way 
to  pay  the  mortgage  debt ;  if  the  entire  premises  are  sold 
and  a  surplus  is  produced,  the  surety  will  be  entitled  to  have 
such  surplus,  to  the  extent  of  his  entire  undivided  share, 
paid  to  him.* 

§  739.  Purchase  of  part  of  premises  by  mortgagee. — 
It  has  been  said  that  where  one  who  holds  a  mortgage, 
purchases  an  absolute  title  to  a  portion  of  the  premises,  and 
afterwards  forecloses  the  mortgage  and  sells  the  whole 
premises  under  a  decree,  he  will  be  entitled  in  the  distribution 


»  Solberg  v.  Wright,  33  Minn.  224  Albion    v.   Bums,    46   N.   Y.    170 

(1885).  (1871);  Smith  v.  Townsend,  25  N. 

»  Dalton  V.  Smith,  86  N.  Y.  176  Y.  479  (1862) ;  Vartie  v.  Uaderwood, 

(1881) ;  Hoyt  v.  Martense,  16  N.  Y.  18  Barb.  (N.  Y.)  561  (1854) ;  Neim- 

231  (1857);  Slee  v.  Manhattan  Ins.  cewicz  v.  Gahn,  3  Paige  Ch.  (N.  Y.) 

Co.,  1  Paige  Ch.  (N.  Y.)  48  (1828).  614  (1832) ;  Loomer  v. Wheelwright, 

'  Erie  County  Sav.  Bank  v.  Roop,  3  Sandf.  Ch.  (N.  Y.)  135  (1845). 
80  N.  Y.  591  (1880).     See  Bank  of 


§1  740-741.]    LESSEE   FOK  YEARS — SURPLUS.  855 

of  the  surplus,  not  to  the  amount  which  he  paid  for  the 
portion  purchased  by  him,  but  only  to  so  much  as  his  portion 
ratably  contributed  to  the  price  brought  by  the  whole 
tract.* 

§  740.  Interest  of  lessee  for  years  in  surplus. — Where 
a  tenant  for  years  holds  under  a  lease  without  covenants, 
which  is  subject  to  a  mortgage,  he  will  not  be  entitled  to  share 
in  the  surplus  arising  from  the  sale  upon  the  foreclosure  of 
such  mortgage."  But  a  lessee  for  years  of  mortgaged 
premises,  holding  under  a  lease  containing  a  covenant  for 
quiet  enjoyment,  is  entitled,  on  the  contrary,  to  receive  from 
the  surplus  moneys  arising  on  the  sale,  the  value  of  the 
use  of  the  premises  during  the  remainder  of  his  term,  less 
the  rents  reserved  and  other  payments  to  be  made  by 
him  under  the  lease.* 

In  the  absence  of  proof  that  the  value  of  the  leasehold  is 
in  excess  of  the  rents  reserved,  or  that  it  has  such  value,  the 
lessee  of  mortgaged  premises  is  not  entitled  to  receive 
any  portion  of  the  surplus  arising  from  a  sale  thereof, 
because  in  the  absence  of  such  proof,  the  presumption  is 
that  the  rent  reserved  is  the  fair  value  of  the  use  and  that 
no  injury  is  sustained  by  the  lessee.*  Where,  therefore, 
a  lessee  and  the  owner  of  the  equity  of  redemption  were  the 
only  claimants  for  the  surplus  arising  on  a  foreclosure  sale, 
and  no  evidence  was  produced  by  the  former  tending  to 
show  that  the  leasehold  estate  had  any  value  in  excess 
of  the  rents,  it  was  held  that  the  whole  surplus  was  properly 
awarded  to  the  owner.* 

§  741.  Mechanic's  lien. — The  Inchoate  rights  of  mechanics 
and  material  men  under  the  statute  giving  them  liens,  are 
entitled  to  share  in  the  surplus  funds  arising  on  a  mortgage 
foreclosure  sale,  although  such  liens  may  not  be  established 


«  Frost  V.  Peacock,  4  Edw.  Ch.  *  Larkin  v.  Misland,  100  N.  Y.  212 

(N.  Y.)  678  (1846).  (1885) ;   Ckrkson  v.   Skidmore,  46 

«  Burr  V.  Stenton,  43  N.  Y.  463  N.  Y.  297,  303  (1871). 

(1871).  '  Larkiu  v.  Misland,  100  N.  Y.  213 

»  Clarkaon  v.  Skidmore,  46  N.  Y.  (1885). 
297(1871). 


856  MEOHAino's  lien — SURPLUS.  [§742. 

by  judgment ;'  but  they  will  always  be  inferior  to  the  lien 
of  a  prior  bona  fide  mortgage.' 

The  delivery  and  acceptance  of  a  deed  to  premises,  "  sub- 
ject to  all  contracts  outstanding  relating  to  said  premises 
and  buildings"  then  in  course  of  erection,  and  all  "  moneys 
now  due  or  to  grow  due  on  account  of  said  contracts  or 
either  of  them,  and  all  incumbrances  of  whatsoever  nature 
and  kind  now  a  lien  upon  said  premises  or  any  part  thereof," 
has  been  held  to  charge  the  premises  with  an  equitable  lien 
in  favor  of  the  mechanics  and  material  men  for  their  claims  ; 
and  such  lien  will  attach  to  the  surplus  moneys  arising  on 
the  foreclosure  of  a  prior  mortgage.* 

But  such  a  clause  in  a  deed  covers  only  claims  in  existence 
at  the  time  of  the  execution  of  the  deed,  and  not  claims 
arising  pursuant  to  contracts  made  after  the  transfer.  It  is 
immaterial  that  such  claims  arise  upon  contracts  with  the 
husband  of  the  grantor  for  the  erection  of  the  building, 
so  that  the  grantor  is  not  personally  liable  for  their  payment ; 
the  consideration  for  the  equitable  liens  so  created  is  the 
transfer  of  the  land.* 

§  742.    Rights  of  cestuis  que  trust  in  surplus. — In  the 

distribution  of  the  surplus  arising  from  the  sale  of  mort- 
gaged premises  made  under  the  foreclosure  of  a  mortgage 
executed  by  one  who  held  the  legal  title  to  the  premises  as 
trustee  ex  maleficio,  the  owner  of  the  equitable  title  under 
such  trust  ex  maleficio  is  entitled  to  claim  the  surplus  after 
the  payment  of  the  mortgage  debt,  to  the  exclusion  of 
judgment  creditors  of  the  mortgagor.' 

Where  the  grantee  in  a  deed  of  trust  subsequently  con- 
veyed the  premises  by  a  deed  of  warranty  and  afterwards 


'  Livingston  v.  Mildrum,   19  N.  *  See  Oppenheimer  v.  Walker,  3 

Y.  440  (1859).     See  Bergen  v.  Sned-  Hun  (N.  Y.)  30  (1874). 

eker,  8  Abb.  (N.  Y.)  N.  C.  50,   56  »  Crombie  v.  Rosenstock,  19  Abb. 

(1879).     As  to  the  right  to  the  sur-  (N.  Y.)  N.  0.  312  (1887). 

plus  under   a  mechanic's  lien  not  *  Crombie  v.  Rosenstock,  19  Abb. 

continued  by  the  court,  after  the  ex-  (N.  Y.)  N.  C.  312  (1887). 

piration    of   one   year,    where  the  *  Landell's  Appeal,  105  Pa.  St.  153 

premises  are  sold  under  foreclosure,  (1884). 
Bee  Emigrant  Industrial  &c.,  Bank 
V.  Goldman,  75  N.  Y.  127  (1878). 


§§  743-744.]    LIEN  roK  attorney's  fees.  857 

transferred  them  again  by  a  deed  of  trust,  the  benefi- 
ciary in  the  latter  knowing  of  the  warranty  deed,  and 
upon  a  foreclosure  under  the  first  incumbrance  there  was  a 
surplus,  the  grantor  being  insolvent  and  a  non-resident,  it 
was  held  that  the  grantee  in  the  warranty  deed  was  entitled 
to  the  surplus  in  preference  to  the  beneficiary  in  the  deed 
of  trust.' 

§  743.  Lien  for  attorney's  fees  on  surplus. — The  lien 
of  an  attorney  on  a  judgment  for  his  fees  extends  to  the  sur- 
plus moneys  arising  on  a  foreclosure,  as  such  fees  are  a  part  of 
the  judgment,"  and  will  be  protected.*  In  the  case  of  Atlantic 
Savings  Bank  v.  Hetterick,*  the  order  of  reference  for  the 
distribution  of  the  surplus  moneys  on  a  foreclosure  sale 
directed  that  the  amount  due  to  the  claimant  thereof  be 
ascertained  by  the  referee,  and  also  the  amount  due  to  any 
other  person  having  a  lien  on  such  surplus  moneys.  The  court 
held  that  the  lien  of  the  attorney  who  procured  the  judg- 
ment for  the  claimant,  upon  which  he  founded  his  claim 
to  the  surplus  moneys  and  another  judgment  decreeing 
it  to  be  paid  out  of  such  moneys,  was  properly  sustained.* 

§  744.  Disposition  of  surplus  moneys  not  applied  for. — 
The  New  York  Code  of  Civil  Procedure'  provides  that  "  if 
there  is  any  surplus  of  the  proceeds  of  the  sale  of  mortgaged 


'  Johnson  v.  Wilson,   77  Mo.  639  •  Atlantic  Savings  Bank  v.  Hiler, 

(1883).  8Hun(N.  Y.)  209  (1874);  Atlantic 

'  Atlantic  Savings  Bank  v.  Het-  Savings  Bank  v.  Hetterick,  5  T.  &  C. 

terick,  5  T.  «&  C.  (N.  Y.)  239  (1875).  (N.  Y.)  239  (1875). 

In  the  case  of  Kennedy  v.  Brown,  *  5  T.  &  C.  (N,  Y.)  239(1875). 

50Mich.  336(1883),  the  mortgagee  bid  »  The  claimant  having  appeared 

off  the  premises  on  foreclosure  at  a  before  the  referee  and  been  heard, 

figure  exceeding  the  amount  of  the  without  objecting  to  the  examination 

debt,  costs,  taxes,  and  insurance  by  of  the  attorney's  account  on  which 

about  $40 ;  the  mortgage  provided  his  demand  was  based,  it  was  held, 

for  an  attorney's  fee  of  $50  ;   the  that  the  proceeding  amounted  to  an 

court  held  that  the  mortgagee  was  arbitration,   if  not  a   reference,  to 

bound  to  pay  over  the  surplus  of  determine  the  attorney's  demand,  by 

$40  to  the  sheriff  for  the  benefit  of  which    the   claimant    was   bound, 

the  owner  of  the  equity  of  redemp-  Atlantic  Savings  Bank  v.  Hetterick, 

lion,  and  that  if  he  did  not  do  so,  the  5  T.  &  C.  (N.  Y.)  239  (1875). 

latter  could  sue  him  for  money  had  •  N.  Y,  Code  Civ.  Proc.  §  1633, 
and  received  to  his  use. 


858  DISPOSING  OF  SUEPLUS  NOT  APPLIED  FOR.     [§  744. 

premises,  after  paying  the  expenses  of  the  sale  and  satisfying 
the  mortgage  debt  and  the  costs  of  the  action,  it  must 
be  paid  into  court  for  the  use  of  the  person  or  persons 
entitled  thereto.^  If  any  part  of  the  surplus  remains  in 
court  for  the  period  of  three  months,  the  court  must,  if  no 
application  has  been  made  therefor,  and  may,  if  an  applica- 
tion therefor  is  pending,  direct  it  to  be  invested  at  interest, 
for  the  benefit  of  the  person  or  persons  entitled  thereto,  to 
be  paid  upon  the  direction  of  the  court."* 

The  rules  of  the  supreme  court'  provide  for  the  deposit 
and  investment  of  surplus  moneys,  the  taking  of  securities 
therefor,  and  the  inspection  of  the  county  treasurer's  and 
chamberlain's  accounts  thereof. 


>  The    surplus   moneys    derived  (N.  Y.)  N.  C.  135  (1877) ;  Tator  v. 

from  a  sale  under  foreclosure,  be-  Adams,  20  Hun  (N.  Y.)  131  (1880) ; 

long  to  the  mortgagor  or  owner  of  the  Savings  Bank  of  Utica  v.  Wood,  17 

equity  of  redemption,  and  not  to  the  Hun  (N.  Y.)  133  (1879);  Hurst  v.  Har- 

purchaser  on  the  foreclosure  sale.  per,  14  Hun  (N.  Y.)  280  (1878);  Sav- 

Day  V.  Town  of  New  Lots,  11  N.  Y.  ings  Institution  v.  Osley, 4  Hun  (N.Y.) 

State  Rep.  361  (1887).  657  (1875) ;  Oppenheimer  v.  Walker, 

«N.  Y.  Code  Civ.  Proc.    §1633  3  Hun  (N.  Y.)  30  (1874);  Atlantic 

See  White   v.   Bogart,    73   N.   Y.  Savings  Bank  v.  Hiler,  5  T.   &  C. 

256  (1878) ;  Dunning  v.  Ocean  Nat.  (N.  Y.)  239  (1874) ;  s.  c.  3  Hun  (N. 

Bank,  61  N.  Y.  497  (1875) ;    s.  c.  Y.)  209. 

19  Am.  Rep.  293  ;  Mutual  Life  Ins.  »  N.  Y.  Supreme  Court  Rules  68, 

Co.  of  N.  Y.  V.  Truchtnicht,  3  Abb.  69,  70. 


CHAPTER  XXXIII. 


PROCEEDINGS  ON  STJBPLUS  MONEYS. 

PRACTICE- DISTRIBUTION   BY   SURROGATE'S  AND   SUPREME   COURTS 

—APPLICATION  FOR  SURPLUS-APPOINTING  REFEREE-HIS 

POWERS  AND  DUTIES-WHAT  MAY  BE  LITIGATED 

—TESTIMONY  SIGNED— REFEREE'S  REPORT 

—CONFIRMATION  —  ORDER   FOR 

DISTRIBUTION— APPEAL. 


I  745.  Distribution  of  surplus    by 
surrogate. 

746.  Distribution  of    surplus    by 

surrogate— Foreclosure    by 
advertisement. 

747.  Distribution     by     supreme 

court. 

748.  Action  to  enforce  claim  to 

surplus. 

749.  Recovering  surplus    wrong- 

fully paid. 

750.  Application      for      surplus 

moneys. 

751.  Who    entitled   to   notice  — 

How  served. 

752.  Certificate  and  proof  of  de- 

positing surplus. 

753.  Appointment  of  referee. 

754.  Order  of  reference  and  oath 

of  referee. 

755.  Presenting  proof  of  claim. 


§  756.  Conduct  of  the  reference. 

757.  Powers  of  the  referee. 

758.  What   claims   may  be    liti- 


759.  Extent  of  referee's  inquiry. 

760.  Right  of  claimant  not  filing 

notice  to  appear. 

761.  Testimony  to  be  signed  and 

filed. 

762.  Referee's       report  —  Filing 

same. 

763.  Exceptions  to  the   referee's 

report. 

764.  Hearing  exceptions  to  report. 

765.  Confirmation     of     referee's 

report. 

766.  Opening   and   setting   aside 

referee's  report. 

767.  Appeal  from  order  for  dis- 

tribution. 


§  745.  Distribution  of  surplus  by  surrogate.—  The 
New  York  Code  of  Civil  Procedure'  provides,  that  "where 
real  property,  or  an  interest  in  real  property,  liable  to  be 
disposed  of  as  prescribed  by  the  statute,  is  sold  in  an  action 
or  a  special  proceeding,  to  satisfy  a  mortgage  or  other  lien 
thereupon,  which  accrued  during  the  decedent's  life-time, 
and  letters  testamentary  or  letters  of  administration  upon 
the  decedent's  estate,  were,  within  four  years  before  the  sale,* 


«N, 
2799. 


Y.  Code  Civ.  Proc.  §§  2798, 


'  The  words  "  within  four  years  be- 
fore the  sale,"  as  used  in  the  Code  Civ. 


8.'9 


860  SURROGATE   DISTRIBUTING   SURPLUS.  [§  746 

Issued  from  a  surrogate's  court  of  the  state,  the  surplus 
money  must  be  paid  into  the  surrogate's  court  from  which 
the  letters  issued."  "Where  money  is  thus  paid  into  a 
surrogate's  court,  and  a  petition  for  the  disposition  of 
property,  as  prescribed  by  the  statute,  is  pending  before 
him,  or  is  presented  at  any  time  before  the  distribution  of 
the  money,  the  money  must  be  distributed  as  if  it  was  the 
proceeds  of  the  decedent's  real  property,  sold  pursuant  to 
the  decree." 

These  sections  of  the  Code  of  Civil  Procedure  are  very  sim- 
ilar in  language  to  those  of  the  former  statute.*  The  former 
statute  was  held  not  to  apply  to  a  foreclosure  by  advertise- 
ment," and  for  that  reason  it  is  thought  by  some  that  these 
sections  of  the  Code  do  not  now  apply,  where  a  foreclosure 
is  conducted  by  advertisement.  It  is  certain,  however, 
that  whether  these  sections  do  or  do  not  apply  to  such 
proceedings,  the  surplus  proceeds  of  a  sale  made  under  a 
decree  of  foreclosure,  rendered  more  than  four  years  after 
a  grant  of  letters  testamentary  or  of  administration,  are  to 
be  distributed  in  the  action,  though  the  judgment  directing 
the  sale  was  entered  within  the  four  years.* 

§746.  Distribution  of  surplus  by  surrogate — Fore- 
closure by  advertisement. — The  New  York  Code  of  Civil 


Proc.§  2798,  and  the  words  "making  German  Sav.  Bank  v.  Sharer,  25 

the  sale"  in  Laws  of  1871,   chap.  Hun  (N.  Y.)  409  (1881);   Fliess  v. 

834,— relating  to  the  payment  into  Buckley,  24  Hun  (N.  Y.)  514  (1881). 

the  proper  surrogate's  court  of  sur-  *  See  White  v.  PoUlon,  25  Hun 

plus  moneys  arising  on  the  sale  of  (N.  Y.)  69  (1881).     Upon  the  distri- 

real  property,  if  letters  testamentary  bution    in    the    surrogate's   court, 

or    of    administration    have    been  under  §2799,    of   surplus   moneys 

issued  within  a  certain  time, — refer  to  arising   on    a    foreclosure,    where 

the  date  of  the  sale,  and  not  to  the  there  is,  under  a  will,  a  life  tenancy 

commencement  of  the  action  or  pro-  in  the  lands  sold,   the  fimd  must 

ceedings    resulting    in    the    sale ;  be  invested   and  the  income  paid 

White  V.  Poillon,  25  Hun  (N.  Y.)  69  to  the  beneficiary  until  the  determi- 

(1881).  nation  of  the  life  estate.    The  surro- 

'  See  Laws  of  1867,  chap.  658,  as  gate  can  not  order  the  payment  of  a 

amended  by  Laws  of  1870,  chap.  gross  sum  in  lieu  thereof.      Zahrt's 

170.  Estate,  11  Abb.  (N.  Y.)  N.  C.  225 

•  See    Loucks   v.    VanAllen,    11  (1882),  citing  Arrowsmith  v.  Arrow- 

Abb.  (N.  Y.)  Pr.  N.  S.  427  (1871) ;  smith,  8  Hun  (N.  Y.)  606  (1876); 


§  747.]  DISTELBUTING    SURPLUS.  861 

Procedure'  provides,  that  "the  commencement  or  pendency 
of  an  action  or  special  proceeding,  having  for  its  object  the 
sale,  either  absolutely  or  contingently,  of  property  liable  to 
be  disposed  of  as  prescribed  by  this  statute;  or  the  foreclosure 
by  advertisement  of  a  mortgage  thereupon  ;  or  any  proceed- 
ing to  sell  such  property,  taken  pursuant  to  a  judgment,  or 
by  virtue  of  an  execution,  does  not  affect  any  of  the  proceed- 
ings taken  in  the  surrogate's  court  for  the  sale  of  such  prop- 
erty, unless  the  surrogate  so  directs.  After  making  a  decree 
directing  a  mortgage,  lease  or  sale,  the  surrogate  may,  and 
in  a  proper  case,  he  must,  stay  the  order  to  execute  the  decree, 
with  respect  to  the  property  affected  by  the  action,  or  special 
proceeding,  or  by  the  proceedings  then  pending,  until  the 
determination  thereof,  or  the  further  order  of  the  surrogate 
with  respect  thereto.  If,  in  the  course  thereof,  a  sale  of 
any  of  the  property  has  been  made,  before  making  the 
decree  in  the  surrogate's  court,  the  decree  must  provide 
for  the  application  of  the  surplus  proceeds  belonging  to  the 
decedent's  estate.  If  such  a  sale  is  made  afterwards, 
the  directions  contained  in  the  decree,  relating  to  the 
property  sold,  are  deemed  to  relate  to  those  proceeds."* 

§  747.  Distribution  by  supreme  court. — The  New  York 
Code  of  Civil  Procedure  provides,  that  "  an  attorney  or  other 
person  who  receives  any  money,  arising  upon  a  sale,  made 
as  prescribed  in  the  title  regulating  foreclosures  by  adver- 
tisement, must,  within  ten  days  after  he  receives  it,  pay 
into  the  supreme  court  the  surplus,  exceeding  the  sum  due 
and  to  become  due  upon  the  mortgage,  and  the  costs  and 
expenses  of  the  foreclosure,  in  like  manner  and  with  like 
effect,  as  if  the  proceedings  to  foreclose  the  mortgage  were 
taken  in  an  action,  brought  in  the  supreme  court,  and  triable 
in  the  county  where  the  sale  took  place."* 

The  Code  provides  further,  that  "  a  person  who  had,  at 
the  time  of  the  sale,  an  interest  in  or  lien  upon  the  property 


In  re  Igglesden,  3  Red!  (N.  T.)  McJimsey,  1  Edw.  Ch.  (N.  T.)  551 

375,  378  (1877).  ( 1833 ) ;    Stilwell  v.   Swarthout,  10 

'  N.  T.  Code  Civ.  Proc.  §  2797.  N.  Y,  Week.  Dig.  369  (1880). 

*  See  Hoey  v.  Kinney,  10  Abb.  »N.  Y.  Code  Civ.  Proc.  §2404. 
(N.  Y.)  Pr.  400  (1860) ;  Breevoort  v. 


862  DISTRIBUTION    BY    SUPREME    COURT.  [§  748. 

sold,  or  a  part  thereof,  may,  at  any  time  before  an  order  is 
made,  as  prescribed  by  the  statute,  file  in  the  office  of  the 
clerk  of  the  county,  where  the  sale  took  place,  a  petition 
stating  the  nature  and  extent  of  his  claim,  and  praying  for 
an  order,  directing  the  payment  to  him  of  the  surplus 
money,  or  a  part  thereof,*" 

"A  person  filing  a  petition,  as  prescribed  in  the  above 
section,  may,  after  the  expiration  of  twenty  days  from  the 
day  of  sale,  apply  to  the  supreme  court,  at  a  term  held 
within  the  judicial  district,  embracing  the  county  where  his 
petition  is  filed,  for  an  order,  pursuant  to  the  prayer  of 
his  petition.  Notice  of  the  application  must  be  served,  in 
the  manner  prescribed  by  statute  for  the  service  of  a  paper 
upon  an  attorney  in  an  action,  upon  each  person,  who  has 
filed  a  like  petition,  at  least  eight  days  before  the  applica- 
tion ;  and  also  upon  each  person,  upon  whom  a  notice  of  sale 
was  served,  as  shown  in  the  affidavit  of  sale,  or  upon  his 
executor  or  administrator.  But,  if  it  is  shown  to  the 
court,  by  affidavit,  that  service  upon  any  person,  required  to 
be  served,  can  not  be  so  made  with  due  diligence,  notice 
may  be  given  to  him  in  any  manner  which  the  court 
directs.'" 

§  748.  Action  to  enforce  claim  to  surplus. — A  party 
entitled  to  the  surplus  moneys  arising  from  a  sale  on  fore- 
closure may  maintain  an  action  therefor."  Thus,  where  an 
attachingcreditor  recovered  a  judgment,  and  the  land  attached 
was  sold  on  a  prior  mortgage  under  a  power  of  sale  contained 
therein,  it  was  held  that  the  attaching  creditor  could,  by 
an  action  in  equity,  enforce  his  lien  against  the  surplus 
proceeds  of  the  sale  remaining  in  the  hands  of   the   first 


*  N.  Y.  Code  Civ.  Proc.  §  2405.  uted  by  the  surrogate's  court,  con- 
»  N.  Y.  Code  Civ.  Proc.  §  2406,  tract    creditors    are    in    no    better 

*  See  Cope  v.  Wheeler,  41  N.  Y.  position  to  assert  any  further  equit- 
303,  308(1869);  Matthews  V.  Dury 66,  able  lien  against  moneys  arising 
45  Barb.  (N.  Y.)  69  (1865) ;  Bevier  from  the  sale  of  a  decedent's  real 
V.  Schoonmaker,  39  How.  (N,  Y,)  estate,  than  they  would  be  if  he  were 
Pr.  411  (1864),  The  remedy  of  living,  Delafield  v.  White,  19  Abb. 
parties  having  a  lien  on  the  surplus,  (N.  Y.)  N,  C.  104,  109  (1887) ;  B,  0. 
Is  by  motion  and  not  by  action,  and,  7  N.  Y.  St.  Rep.  301. 

except  where  the  surplus  is  distrib- 


§§  749-750.]  ACTION  ON  claim  to  surplus.  8G3 

mortgagee.*  And  it  has  been  held,  that  after  the  surplus 
has  been  paid,  under  an  order  of  the  court,  to  an  assignee 
of  the  mortgagor,  if  the  widow,  who  neglected  to  appear 
in  the  foreclosure,  was  not  notified  of  the  reference  for 
the  distribution  of  the  surplus,  she  can  maintain  an  action 
against  such  assignee  to  recover  her  dower  in  the  surplus.* 

Where  a  surplus  arises  upon  the  foreclosure  of  a  first 
mortgage,  the  claims  thereon  of  a  second  mortgagee  and  of 
judgment  creditors  may  be  determined  before  a  referee 
appointed  by  the  court  in  which  the  judgment  of  foreclosure 
was  rendered,  and  an  action  can  not  be  maintained  for  that 
purpose.* 

A  mortgagee  on  recovering  a  judgment  of  deficiency  against 
the  administrators  of  a  deceased  mortgagor,  can  not  maintain 
an  action  to  have  his  claim  declared  a  lien  on  the  surplus 
arising  on  the  foreclosure  of  a  mortgage  on  other  lands 
given  by  the  same  mortgagor  to  another  mortgagee  ;  his 
only  remedy,  aside  from  that  against  the  personal  estate  of 
the  decedent,  is  by  an  action  against  the  mortgagor's 
heirs  or  devisees ;  if  they  are  insolvent,  the  court  may 
direct  the  surplus  to  be  held  and  applied  to  the  judgment.* 

§  749.  Recovering  surplus  wrongfully  paid.  —  It  is 
believed  that  where  surplus  moneys  have  been  paid  to  a 
person  not  entitled  thereto,  under  an  order  irregularly 
obtained,  the  court  has  authority  by  a  summary  proceeding 
to  compel  such  person  to  restore  the  fund  thus  irregularly 
obtained  without  the  proper  order  of  the  court.' 

§  750.  Application  for  surplus  moneys. — In  New  York, 
on  filing  the  referee's  report  of  the  sale,  "  any  party 
to  the  suit,  or  any  person  who  had  a  lien  on  the  mortgaged 
premises  at  the  time  of  the  sale,  upon  filing  with  the  clerk 
where  the  report  of  sale  is  filed  a  notice,  stating  that  he 
is  entitled  to  such  surplus  moneys  or  some  part  thereof,  and 


'  Wiggin  V.  Hey  wood,  118  Mass.  *  Fliess  v,  Buckley,  24  Hun  (N. 

514  (1875).  Y.)  514  (1881) ;  afE'd  90  N.  Y.  286. 

^  Matthews  v.  Duryee,  45  Barb.  *  Burchard  v.  PhiUips,  11  Paige 

(N.  Y.)  69  (1865).  Ch.  (N.  Y.)  66,  70  (1844). 

»  Fliess  V.  Buckley.  90  N.  Y.  286 
(1882). 


864  NOTICE   OF   CLAIM   TO    SURPLUS.  [§  751. 

the  nature  and  extent  of  his  claim,  may  have  an  order 
of  reference,  to  ascertain  and  report  the  amount  due  to  him, 
or  to  any  other  person,  which  is  a  lien  upon  such  surplus 
moneys,  and  to  ascertain  the  priorities  of  the  several  liens 
thereon;  to  the  end  that,  on  the  coming  in  and  confirma- 
tion of  the  report  on  such  reference,  such  further  order  may 
be  made  for  the  distribution  of  such  surplus  moneys  as 
may  be  just.  The  referee  shall,  in  all  cases,  be  selected  by 
the  court.* 

Questions  of  priority  between  parties  having  claims  upon 
the  equity  of  redemption  may  be  properly  litigated 
upon  the  application  for  the  surplus  after  it  has  been 
paid  into  court ;'  but  until  it  is  ascertained  that  there  is 
a  surplus,  such  parties  should  not  be  permitted  to  litigate 
their  claims  as  between  themselves.* 

An  application  for  surplus  moneys,  made  either  by 
petition  or  on  motion,  will  be  fatally  defective,  unless  it  estab- 
lishes a  prima  facie  right  to  a  part  at  least  of  the  surplus; 
and  it  does  not  do  this  unless  it  shows  how  the  parties  cited 
claim  an  interest  in  the  mortgaged  lands.* 

§751.  Who  entitled  to  notice — How  served. — "The 
owner  of  the  equity  of  redemption,  and  every  party  who 
appeared  in  the  cause,  or  who  shall  have  filed  a  notice  of 
claim  with  the  clerk,  previous  to  the  entry  of  the  order 
of  reference,  shall  be  entitled  to  service  of  a  notice  of  the 
application  for  the  reference,  and  to  attend  on  such  refer- 
ence, and  to  the  usual  notices  of  subsequent  proceedings 
relative  to  such  surplus.  But  if  such  claimant  or  such 
owner  has  not  appeared,  or  made  his  claim  by  an  attorney 
of  this  court,  the  notice  may  be  served  by  putting  the  same 
into  the  post-ofifice,  directed  to  the  claimant  at  his  place  of 
residence,  as  stated  in  the  notice  of  his  claim,  and  upon  the 
owner  in  such  manner  as  the  court  may  direct.'" 


'  N.  Y.  Supreme  Court  Rule  64.  *  Allen  v.  Wayne  Circuit  Judges, 

»  Schenck  v.  Conover,  13  N.   J.  57  Mich.  198  (1885). 

Eq.  (2  Beas.)  31  (1860) ;  s.  c.  78  Am.  »  N.  T.  Supreme  Court  Rule  64. 

Dec.  95.  See  FrankUn  v.  YanCott,  11  Paige 

»  Union  Ins.  Co.  v.  VanRensselser,  Ch.  (N.T.)  129  (1844);  Hulbert  v.  Mc- 

4  Paige  Ch.  (N.  Y.)  85  (1883).  Kay,  8  Paige  Ch.  (N.  Y.)  652  (1841); 


§§  752-753.]   APPOINTMENT  OF  REFEREE.  8G5 

§  752.  Certificate  and  proof  of  depositing  surplus. — 
On  an  application  for  the  distribution  of  the  surplus,  the 
moving  party  should  produce  to  the  referee  the  certificate 
of  the  county  treasurer  or  of  the  chamberlain  of  New  York, 
if  the  suit  is  pending  there,  or  of  the  person  with  whom  the 
surplus  is  required  to  be  deposited,  either  by  law  or  by 
the  decree  of  the  court,  showing  the  amount  thereof ;'  and 
showing  also,  that  no  notice  of  claim  to  such  surplus  was 
annexed  to  the  report  of  sale,  and  that  no  claim  to  the  same 
was  filed  previous  to  the  order  of  reference :  or,  if  claims 
have  been  filed,  the  certificate  should  set  forth  the  names  of 
the  claimants,  and  of  their  attorneys,  if  any,  and  their  places 
of  residence.* 

The  party  moving  for  the  reference  should  also  show  by 
affidavit,  what  unsatisfied  liens  appear  by  the  official 
searches  used  in  the  progress  of  the  action,  where  there 
are  any,  and  what  other  unsatisfied  liens  are  known  to 
exist.* 

§  753-  Appointment  of  referee.— Upon  the  filing  of  a 
claim  to  the  surplus  moneys  by  a  party  to  the  suit,  or  by 
any  person  who  claims  an  interest  in  such  surplus,  the  court 
may  appoint  a  referee  to  ascertain  and  determine  the  rights 
of  the  several  claimants.*  Such  a  reference  is  not  a  collat- 
eral action  ;*  it  is  a  special  proceeding,*  and  decides  direct 
issues  necessary  to  be  determined  before  the  court  can  finally 
and  completely  distribute  the  surplus  arising  from  the  sale 
of  the  mortgaged  premises.* 


In  re  Solomon,  4  Redf.  (N.  Y.)  509  some  courts  such  a  reference  is 
(1880) ;  Allen  v.  Wajne  Circuit  allowed  as  a  maUer  of  course;  but  in 
Judges,  57  Mich.  198  (1885) ;  Smith  otliera,  it  is  allowed  only  on  applica- 
V.  Smith,  13  Mich.  258  (1865) ;  N.Y.  tion  upon  notice.  Ward  v.  Mont- 
Code  Civ.  Proc.  §  2406.  clair  R.  R.  Co.  26  N.  J.  Eq.   (11  C. 

>  N.  Y.  Supreme  Court  Rules  61,  E.  Gr.)  260  (1875). 

64.  *  Mutual  Life  Ins.  Co.  v.  Bowen, 

«  Hulbert  v.  McKay,  8  Paige  Ch.  47  Barb.  (N.  Y.)  618  (ISGG). 

(N.  Y.)  651  (1841).     See  Franklin  v.  •  Mutual  Life  Ins.  Co.  v.  Anthony, 

VanColt,  11  Paige  Ch.  (N.  Y.)  129  23  N.  Y.  Week.  Dig.  437  (1886). 

(1845).  '  Mutual  Life  Ins.  Co.  v.  Bowen, 

•  N.  Y.  Supreme  Court  Rule  64.  47  Barb.  (N.  Y.)  618  (1866). 


♦  According   to   the    practice   in 


(55) 


866       •  THE   REFERENCE.  [§§  754-755. 

Where  there  are  surplus  moneys  in  the  hands  of  a 
mortgagee,  arising  upon  the  foreclosure  of  a  mortgage  by 
advertisement,  and  two  separate  actions  have  been  brought 
by  judgment  creditors  of  the  mortgagor  to  have  such  sur- 
plus applied  towards  the  payment  of  their  respective 
judgments,  and  a  reference  has  been  ordered  to  determine 
to  whom  such  surplus  shall  be  paid,  and  neither  party 
appeals  from  such  order,  or  applies  for  an  order  requiring 
the  referee  to  report  the  evidence,  the  proceeding  must 
be  treated  in  all  respects  as  a  reference  made  in  pursu- 
ance of  the  supreme  court  rule  to  settle  claims  to  surplus 
moneys  in  foreclosure  cases.  By  neglecting  to  appeal  from 
such  order  of  reference,  both  parties  tacitly  consent  to  that 
method  of  determining  their  respective  rights.' 

§  754.    Order  of  reference  and  oath  of  referee. — The 

New  York  Code  of 'Civil  Procedure'  provides,  that  "upon 
the  presentation  of  the  petition,  with  due  proof  of  notice 
for  application,  the  court  must  make  an  order,  referring 
it  to  a  suitable  person,  to  ascertain  and  report  the  amount 
due  to  the  petitioner,  and  to  each  other  person,  which  is 
a  lien  upon  the  surplus  money,  and  the  priorities  of  the 
several  liens  thereupon.  Upon  the  coming  in  and  confirma- 
tion of  the  referee's  report,  the  court  must  make  such 
an  order,  for  the  distribution  of  the  surplus  money,  as  justice 
requires." 

The  referee  in  a  proceeding  for  the  distribution  of  surplus 
moneys,  before  proceeding  to  examine  the  certificates  or  to 
receive  evidence,  should  be  sworn  faithfully  and  fairly  to  try 
the  issues  referred  to  him,  according  to  the  best  of  his 
understanding;*  the  neglect  of  the  referee  to  take  such  oath, 
is  not  a  fatal  error,  however,  and  the  omission  may  be 
subsequently  supplied.* 

§  755-  Presenting  proofs  of  claims.— The  parties  prose- 
cuting a  reference  for  the  distribution  of  surplus  moneys, 


'  Kirby  v.   Fitzgerald,  31  N.  Y.  *  N.  Y.   Code  Civ.  Proc.   §  721. 

417  (1865).-  See  Mutual  Life  Ins.  Co.  v.  Anthony, 

'  §  2407.  23  N.  Y.  Week.  Dig.  427  (1886). 
»  N.  Y.  Code  Civ.  Proc.  8  1016. 


§  755.]  PRESENTIN-G    PROOFS    OF    CLAIJIS.  807 

must  establish  their  respective  claims  and  the  amounts 
thereof  before  the  referee,  in  the  same  manner  as  is  required 
of  creditors  coming  in  under  a  decree  in  the  settlement  of 
the  estate  of  an  insolvent  debtor ;  the  referee  should 
examine  the  parties  upon  oath  concerning  their  respective 
claims.* 

In  a  case  where  the  claimants  offered  in  evidence  a 
transcript  of  a  judgment  recovered  by  them,  in  an  action 
commenced  against  a  person  of  the  same  name  as  the  owner 
of  the  equity,  it  was  held  that  there  was  a  presumption  that 
the  owner  of  the  equity  and  the  judgment  debtor  were  the 
same  person." 

Under  the  former  chancery  rules  the  correct  practice,  where 
a  person  had  an  equitable  lien  upon  the  surplus  moneys, 
was  to  deliver  a  notice  of  his  claim  to  the  master  who  made 
the  sale,  or  to  file  it  with  the  clerk  in  whose  office  the 
surplus  moneys  were  deposited  by  the  master ;  or,  in  case 
an  order  of  reference  was  entered  upon  the  application  of 
some  other  claimant  before  he  became  aware  of  his  rights,  to 
appear  before  the  master,  upon  the  reference,  and  to  present 
and  establish  his  claim  there.  If  he  neglected  to  do  this, 
without  a  sufficient  excuse,  the  court  would  not  hear  his 
claim  to  such  surplus  moneys  upon  a  petition." 

But  now  any  party  to  the  suit,  or  any  person  not  a  party  to 
the  suit,  who  has  a  lien  on  the  mortgaged  premises  at  the 
time  of  the  sale,  is  entitled  to  appear  before  the  referee  and 
to  prove  his  claim.*  A  plaintiff  who  holds  mortgages  or 
other  liens  which  are  junior  to  the  mortgage  foreclosed,  is 
entitled  to  appear  and  prove  such  liens  the  same  as  any 
other  party  to  the  action  or  any  other  holder  of  a  lien.* 


»  Hulbert  v.  McKay,  8  Paige  Ch.  14   New   York  Week.  Digest,  143 

(K  Y.)  651  (1841).    See  DeRuyter  v.  (1883). 

St.  Peter's  Church,  2  Barb.  Ch.  (N.  »  DeRuyter  v.  St.  Peter's  Church, 

Y.)  555  (1848).  Aref eree  appointed  to  2  Barb.  Ch.  (N.  Y.)  555  (1818). 

take  and  report  testimony,    is  not  *  Field  v.  Hawxhurst,  9  Plow.  (N. 

bound  to  take  irrelevant  testimony.  Y.)  Pr.  75  (1853). 

In  re  Silvernail,  45  Hun  (iN.  Y.)  575  "  Mutual  Life  Ins.  Co.  of  N.  Y.  v. 

(1887).  Truchtnicht,  '6  Abb.  (N.  Y.)  N.  0. 

«  Bowery  Sav.  Bank  v    Keenan,  135  (1877). 


868  CONDUCT    OF    REFERENCE.         [§§  756-757. 

§  756.  Conduct  of  the  reference.— The  Code  of  Civil 
Procedure  and  the  rules  of  the  supreme  court  do  not 
prescribe  the  general  powers  of  the  referee  on  a  reference 
for  the  distribution  of  surplus  moneys.'  The  object  of  such 
a  proceeding  is  to  ascertain  the  amount  due  to  each  of  the 
persons  having  liens  upon  the  surplus  and  the  priorities  of 
such  liens,  in  order  that  on  the  coming  in  of  the  report, 
the  court  may  make  an  order  for  the  distribution  of  such 
fund.'  The  proceedings  on  such  a  reference  are  similar 
to  those  taken  earlier  in  the  foreclosure  to  compute  the 
amount  due  on  the  mortgage. 

The  referee  appointed  in  proceedings  to  distribute  the 
surplus,  is  a  substitute  for  the  former  master  in  chancery 
under  the  old  chancery  practice,  and  his  general  powers  and 
duties,  not  being  prescribed  by  statute  nor  by  the  rules  of  the 
supreme  court,  are  the  same  as  those  possessed  by  a  master 
in  chancery,  and  that  part  of  the  former  practice,  which  is 
not  inconsistent  with  the  Code,  is  thought  to  be  still  in  force 
in  its  application  to  such  references.* 

§  757-  Powers  of  the  referee. — The  proceedings  on  a 
reference  to  ascertain  the  priority  of  liens  on  surplus 
moneys  are  a  part  of  the  original  action ;  the  reference  is 
not  a  collateral  matter,  and  any  issue  may  be  litigated 
in  it,  which  must  be  determined  by  the  court  before 
the  whole  of  the  fund  can  be  fully  and  completely  dis- 
tributed.* Thus,  it  has  been  held  that  the  referee  has 
authority  to  inquire  into  the  validity  of  conveyances  or  liens; 
and  such  conveyances  as  well  as  liens  may  be  attacked 
as  fraudulent  ;*  he  also  has  power  to  examine  into  questions 


>  N.  T.  Code  Civ.   Proc.   §  1018,  *  Mutual  Life  Ins.  Co.  v.  Bowen, 

applies  only  to  the  trial  of  issues  47  Barb.  (N.  Y.)  618  (1866). 

joined  in  an  action.  *  Fliess  v.  Buckley,  90  N.  Y.  288 

«  See  Laws  of  1868,  chap.  804,  §  3.  (1882) ;  Bergen  v.  Carman,  79  N.  Y. 

»Ketchum    v.    Clark,    22    Barb.  146  (1879).  citing  Halsted  v.  Halsted, 

(N.  Y.)  319  (1856);  Palmer  v.  Pal-  55  N.Y.  442(1874);  Schaf er  v.  ReiUy, 

mer,  13  How.  (N.  Y.)  Pr.  363  (1856);  50  N.  Y.    61  (1872) ;  McRober^s  v. 

VanZandt  v.  Cobb,  10  How.  (N.  Y.)  Pooley,  12  N.  Y.  Civ.  Proc.  Rep.  139 

Pr.  348  (1854) ;  Graves  v.  Blanchard,  (1887). 
4  How.  (N.  Y.)  Pr.  303  (1850)  ;  1 
Van  Sant.  Eq.  Pr.  21,  22,  523. 


§  757.]  POWEKS    OF   REFEREE.  869 

of  usury  ;'  but  he  can  not  examine  into  an  allegation  of 
usury  as  against  a  prior  judgment.* 

A  referee  is  authorized  to  make  an  equitable  adjustment 
of  all  claims  to  the  surplus  moneys.  He  has  full  power  to 
hear  all  the  evidence  that  may  be  offered  affecting  the 
matters  in  controversy.  The  reference  is  provided  to  afford 
an  opportunity  to  the  parties  interested  to  litigate  and  dispose 
of  their  claims  and  liens  upon  the  surplus.  He  may  receive 
proof  that  an  asserted  lien  is  for  any  cause  without  foun- 
dation, or  that  it  has  been  over  stated  in  amount  or 
satisfied  and  discharged,  or  that  the  claimant  has  placed 
himself  in  a  position  where  the  law  will  not  permit  him  to 
participate  in  the  distribution  of  the  surplus.  In  fact, 
the  authority  which  the  referee  is  entitled  to  exercise  in  the 
hearing  and  disposition  of  claims,  is  as  extensive  as  the  claims 
themselves,  or  as  the  legal  and  equitable  objections  that 
may  be  made  to  their  allowance.* 

The  court  held  in  the  case  of  Tator  v.  Adams,*  that 
although  there  had  previously  been  some  doubt  as  to  the 
powers  of  referees  in  proceedings  to  distribute  surplus 
moneys,  the  decision  of  Bergen  v.  Snedeker'  has  settled  the 
matter.  It  was  held  there,  that  a  question  of  fraud  may  be 
investigated  before  the  referee;  and  it  follows,  by  analogy^ 
than  any  question  may  be  examined  tending  to  show  the 
equities  of  the  claimants.* 

The  power  of  a  referee,  to  determine  the  validity  of  a  claim 
in  proceedings  to  distribute  surplus  moneys,  is  not  confined 
to  so  much  thereof  only  as  will  exhaust  the  surplus,  but 
his   decision   sustaining   a    claim   and    overruling   defences 


'  Mutual  Life  Ins,  Co.  v.  Bowen,  enlarged  the  rule,  as  it  was  supposed 

47  Barb.  (N.  Y.)  618  (1866),  to  exist  when  the  case  of  the  Union 

•  Slosson  V.  Duff,  1  Barb.  (N.  T.)  Dime  Savings  Institution  v.  Osley,  4 

432  (1847).  Hun  (N,Y,)  657  (1875),  was  decided. 

»  Kingsland  v.  Chetwood,  39  Hun  *  20  Hun  (N.  Y.)  131  (1880). 

(N.  Y.)  602,  607  (1886),  which  holds  »8  Abb.   (N,    Y,)  N,   C.    50,  57 

that    this    measure     of     authority  (1879) ;  s.  c.  21  Alb.  L,  J.  54. 

seems  to  be  within  the  decision  of  •  See  Schafer  v.  Reilly,  50  N.  Y. 

Bergen  v.   Carman,    79  N.    Y.    146  61  (1872) ;  Mutual  Life  Ins.  Co.  v. 

(1879),  and  Fliess  v.  Buckley,  90  N.  Bowen,  47  Barb.  (N.  Y.)  618  (1866) 
Y.   286   (1882),   which    very  much 


870  WHAT   CLAIMS    MAY   BE   LITIGATED.  [§758. 

thereto  will  be  binding  and  conclusive  upon  the  parties  in  all 
other  matters.'  Whenever  the  facts  in  a  case  would  warrant 
an  action  in  equity  to  declare  a  claim  to  be  a  lien  on  a  fund,  a 
referee  in  surplus  money  proceedings  may  hear  and  deter- 
mine an  application  to  establish  such  lien,  and  if  he  is  of 
the  opinion  that  it  should  be  granted,  he  may  report  directly 
in  favor  thereof.* 

§  758.  What  claims  may  be  litigated.— The  only  claims 
that  can  be  considered  in  a  proceeding  before  a  referee  for 
the  distribution  of  surplus  moneys,  are  such  Hens  as  would 
subject  the  estate  to  be  sold  without  the  further  intervention 
of  the  court ;  claims  which  have  not  been  perfected  into  liens 
can  not  be  considered,  however  equitable  they  may  be.*  It 
would  seem,  however,  that  the  inchoate  rights  of  mechanics 
and  material-men,  where  liens  are  given  to  them  by  statute, 
are  claims  of  such  a  nature  that,  although  not  established  by 
judgment,  they  are  entitled  to  be  considered  by  the  referee 
and  to  share  in  the  distribution  of  the  surplus  moneys.* 

On  a  reference  to  ascertain  to  whom  surplus  moneys  arising 
on  a  foreclosure  belong,  the  referee  is  authorized  to  state 
the  account  of  a  tenant  in  common  who  has  been  in  posses- 
sion of  the  premises  and  collected  the  rents,  and  to  charge  his 


'  Bergen  v.   Carman,    79  N.   Y.  '  Crombie  v.  Kosentock,  19  Abb. 

146  (1879) ;  Halstad  v.  Halsted,  55  N.  (N.  Y.)  N.  C.  312  (1887).  See  Fliess  v. 

Y.  442  (1874) ;  Husted  v.  Dakin,  17  Buckley,  90  N.  Y.  286  (1882) ;  Ber- 

Abb.  (N.  Y.)  Pr.  137  (1857) ;  King  gen    v.    Carman,     79    N.     Y.    146 

V.  West,  10  How.  (N.  Y.)  Pr.  333  (1879);  Halsted  v.  Halsted,  55  N.  Y. 

(1854) ;  Sleight  v.  Read,  9  How.  (K  442  (1874) ;  Kingsland  v.  Cbetwood, 

Y.)  Pr.  278  (1854)  ;  Rogers  v.  Ivers,  39  Hun  (N.  Y.)  602  (1886) ;  Tator  v. 

23  Hun  (N.  Y.)  424  (1881) ;  Tutor  v.  Adams,  20  Hun  (N.  Y.)  131  (1880) ; 

Adams,  20  Hun  (N.  Y.)  131  (1880)  ;  Bowen  v.  Kaugbran,  1  N.  Y.  State 

Union  Dime  Sav.  Inst.  v.  Osley,  4  Rep.  121  (1886). 

Hun  (N.    Y.)  657  (1875);    Mutual  3  Husted  v.  Dakin,  17  Abb.   (N. 

Life  Ins.  Co.  v.  Salem,  5  T.  &  C.  Y.)  Pr.   137  ( 1857 ) ;    Mutual  Life 

(N.   Y.)  246  (1875) ;  Atlantic  Sav.  Ins.  Co.  v.  Bowen,  47  Barb.  (N.  Y.) 

Bank  v.  Hetterick,  5  T.  «fc  C.  (N.  618(1866);  King  v.  West,  10  How. 

Y.)  239  (1875) ;  Bergen  v.  Snedeker,  (N.  Y.)  Pr.  333  (1854). 

21  Alb.  L.  J.  54  (1880) ;  s.  c.  8  Abb.  *  Livingston  v.   Mildrum,    19   N. 

(N.    Y.)    N.    C.    50  ;  McRoberts  v.  Y.  440  (1859). 
Pooley,  12  N.  Y.  Civ.  Proc.  Rep. 
139  (1887). 


§758.]  WUAT    CLAIMS    MAY    BE   LITIGATED.  871 

share  of  the  surplus  with  the  excess  so  collected  over  the  part 
to  which  he  was  entitled  ;'  and  it  was  held  in  the  case  of  Atlan- 
tic Savings  Bank  v.  Hiler,*  that  where  an  attorney  for  a  judg- 
ment creditor  claims  a  lien  upon  the  judgment  for  his  fees 
in  procuring  it,  the  referee  may  protect  such  lien  by  order- 
ing a  portion  of  the  amount  due  on  the  judgment  to  be 
paid  to  such  attorney. 

So  the  referee  may  determine  whether  or  not  a  clause 
reserving  a  life  estate  to  the  mortgagor,  appearing  in  a 
mortgage  produced  by  a  claimant,  was  inserted  by  mistake : 
and  if  he  finds  that  it  was  so  inserted,  he  may  give  the 
mortgage  priority  as  against  subsequent  judgment  creditors 
who  ask  to  have  the  value  of  such  life  estate  first  set  apart 
from  the  surplus  and  applied  to  the  payment  of  their  debts." 

Where  it  appears  tliat  the  intention  in  executing  cer- 
tain* written  instruments  was  to  assign  the  rights  of  the 
parties  in  the  surplus  moneys,  though  express  words  of 
assignment  were  not  used,  such  instruments  will  be  held  to 
be  equitable  assignments,  and  the  referee  may  report 
directly  in  favor  of  the  equitable  assignee.* 

A  judgment  lien  upon  surplus  moneys  can  not  be 
attacked  on  such  a  reference  by  a  junior  claimant,  because  of 
a  mere  irregularity  not  affecting  the  jurisdiction  of  the  court 
in  which  it  was-  rendered.'  Subsequent  incumbrancers  of 
mortgaged  premises  have  no  claim  upon  and  are  not 
entitled  to  share  in  the  surplus  moneys  arising  upon  a 
statutory  foreclosure  of  which  they  had  no  notice,  because 
their  liens  are  not  affected  by  the  proceedings  and  are 
not  transferred  from  the  land  to  the  surplus.* 

In  a  proceeding  for  the  distribution  of  surplus  moneys, 
arising  from  the  sale  of  mortgaged  premises  under  a  decree 
for  the  foreclosure  of  a  first  mortgage,  where  the  holders  of 


«  Kingsland  v.  Clietwood,  39  Hun  «  White  v.  Bogart,  73  N.  Y.  256 

(N.  Y.)0U2(1886).  (1878). 

»  3  Hun  (N.  y.)  209  (1874).  «  Root  v.  Wheeler,  12  Abb.  (N.  Y.) 

«  Tator  V.  Adams,  20  Hun  (N.  Y.)  Pr.  294  (1861) ;   Wiiislow  v.  McCall. 

131  (1880).  32  Barb.  (N.  Y.)  241  (1860). 

■*  Bowen  v.    Kaiighran,  1  N.   Y. 
State  Rep.  121  (1886). 


872  EXTENT  OF  eeferee's  lnquiet.  [§§  759-760. 

a  fourth  mortgage  set  up  before  the  referee  usury  in  a  third 
mortgage,  it  was  held  that  the  third  mortgage,  being 
affected  or  tainted  with  usury,  was  void  as  to  the  holders  of 
the  fourth  mortgage,  and  was  no  lien,  either  at  law  or  in 
equity,  on  the  surplus  moneys.' 

§  759.  Extent  of  referee's  inquiry. — It  has  been  said 
that  where  an  order  of  reference  directs  the  referee  to  inquire 
and  report,  not  only  as  to  the  amount  due  to  the  party 
obtaining  such  order,  but  also  as  to  the  liens  of  any  other 
persons  upon  the  surplus  moneys,  the  referee  therefor  should 
ascertain  the  whole  amount  of  such  surplus  by  the  certificate 
of  the  treasurer  of  the  county  or  of  the  city  chamberlain,  as 
the  case  may  be,  and  if  the  lien  of  the  party  obtaining  the 
reference  and  entitled  to  priority  is  not  large  enough  to 
exhaust  the  whole  surplus,  it  is  then  the  duty  of  the  referee 
to  go  further  and  to  ascertain  who  is  entitled  to  the  residue 
of  such  surplus;  so  that,  upon  the  coming  in  of  the  report, 
an  order  may  be  made  which  will  dispose  of  the  whole 
surplus  fund.  Prima  facie  the  owner  of  the  equity  of 
redemption  is  entitled  to  the  surplus,  and  if  no  one  attends 
before  the  referee  and  produces  evidence  of  a  better  right, 
and  there  is  no  evidence  before  him  that  the  person  entitled 
thereto  prima  facie  has  parted  with  his  right,  it  is  the  duty 
of  the  referee  to  report  that  the  residue  of  such  suplus 
belongs  to  the  owner  of  the  equity  of  redemption.* 

§  760.    Right  of  claimant  not  filing  notice  to  appear. 

— An  incumbrancer  or  lienor  who  has  neglected  to  file 
a  notice  of  his  claim  upon  the  surplus  moneys,  may  appear 
before  the  referee  pending  the  reference  as  to  such  surplus, 
and  file  his  claim  in  proper  manner;  he  will  then  be  entitled 
to  be  heard  upon  the  reference  as  to  the  validity  of  his 
claim,  upon  such  equitable  terms  as  to  costs  as  the  referee 
may  direct.* 

Where  an  order  of  reference  has  been  entered  upon  the 
application  of  another  claimant,  before  the  petitioner  became 


>  Mutual  Life  Ins.  Co.  of  N.  Y.  v.  Bowen,  47  Barb.  (N.  Y.)  618  (1866). 
»  Franklin  v.  VanCott,  11  Paige  Ch.  (N.  Y.)  129  (1844). 
»  Hulbert  v.  McKay,  8  Paige  Ch.  (N.  Y.)  651  (1841). 


§§  761-762.]  TESTIMONY  SIGNED  AND  FILED.  873 

aware  of  his  rights,  he  will,  nevertheless,  be  authorized  to 
appear  on  the  reference  and  to  present  and  establish  his 
claim  to  the  surplus.'  But  he  can  not,  pending  such 
reference,  maintain  an  independent  proceeding  by  a  new 
petition  or  motion.* 

§  761.  Testimony  to  be  signed  and  filed. — Under  the 
New  York  practice,  the  testimony  upon  a  reference  in  pro- 
ceedings for  the  distribution  of  the  surplus,  must  be  signed 
by  the  witnesses  and  filed  with  the  report  of  the  referee ;  a 
note  of  the  time  of  the  filing  must  be  entered  by  the  clerk 
in  a  proper  book  under  the  title  of  the  foreclosure  ;  and  such 
report  will  become  absolute  and  stand  in  all  things  confirmed, 
unless  exceptions  thereto  are  filed  and  served  within  eight 
days  after  the  service  of  the  notice  of  the  filing.* 

This  rule  is  imperative,  unless  its  provisions  are  waived  by 
some  act  of  the  parties ;  the  mere  omission  of  the  parties  to 
request  that  the  signatures  of  the  witnesses  be  affixed  to  their 
testimony,  will  not  amount  to  a  waiver.* 

Where  a  witness  fails  to  sign  his  testimony,  the  remedy 
for  the  irregularity  is  by  motion  for  the  purpose  of  securing 
its  correction  and  not  by  filing  exceptions  to  the  report 
of  the  referee.*  The  testimony  taken  by  a  referee  must  be 
filed  with  his  report ;  until  this  is  done,  the  filing  will 
be  incomplete,  and  the  time  within  which  exceptions  to  the 
report  must  be  filed  and  served  will  not  begin  to  run.* 

§  762.  Referee's  report — Filing  same.— Upon  a  refer- 
ence to  ascertain  who  are  entitled  to  the  surplus  moneys 
brought  into  court  under  a  foreclosure,  the  referee   must 


»  See   DeRuyter   v.     St.    Peter's  See  Greene  v.  Bishop,  1  Cliff.  C.  C. 

Church,   2  Barb.    Ch.   (N.  Y.)  555  186  (1858). 

(1848) ;  Hulbert  v.  McKay,  8  Paige  «  Pope  v.  Perault,  22  Hun  (N.  Y.) 

Ch.  (K  Y.)  651  (1841).  468    (1880).     And    it    is    said    that 

*  DeRuyter  v.  St.  Peter's  Church,  although    a    court  stenographer  is 
2  Barb.  Ch.  (N.  Y.)  555  (1848).  not  obliged  to  part  with  his  notes 

•  N.  Y.  Supreme  Court  Rule  30.  until  his  fees  are  paid,  yet  if  he  deliv- 

*  Bowne  v.  Leveridge,  2  Month.  ers  them  to  the  referee  to  be  examined 
Law  Bull.  88  (1880).  by  him  or  used  as  the  basis  of  his 

•  National  State  Bank  v.  Hibbard,  report,  but  not  to  be  filed  until  his' 
45  How.  (N.  Y.)  Pr.  281,  287  (1873).  fees    are    paid,    the    referee    must, 


874  EXCEPTIONS   TO    REFEREE's    REPORT.  [§763. 

ascertain  and  report  the  facts  as  directed  in  the  order  of  his 
appointment ;  such  report  should  show  on  its  face  that 
every  party  entitled  to  notice  to  attend  upon  the  reference, 
was  duly  summoned  to  appear;  it  should  also  state  what 
parties  appeared  on  the  reference.' 

After  the  report  of  the  referee  has  been  prepared  it  should 
be  filed,  and  an  order  for  the  confirmation  thereof  should  be 
entered  with  the  order  for  the  distribution  of  the  surplus. 
The  latter  will  be  granted  as  a  matter  of  course,  unless 
exceptions  to  the  report  have  been  filed  within  the  time 
allowed.  The  order  of  distribution,  however,  should  never 
be  granted  until  the  time  has  expired  within  which  excep- 
tions to  the  report  may  be  filed.* 

§  763.  Exceptions  to  the  referee's  report— Any  person 
interested  in  the  distribution  of  the  surplus  moneys  may 
file  exceptions  to  the  report  of  the  referee,  if  he  considers 
himself  aggrieved  thereby  ;  if  two  or  more  persons  wish 
to  file  the  same  objections  to  the  report,  they  may  do  so 
either  by  joining  in  the  same  exceptions  or  by  stating  their 
exceptions  separately.  Parties  who  have  appeared  on  the 
reference,  are  entitled  to  notice  of  the  filing  of  the  referee's 
report,*  and  their  exceptions  thereto,  if  any,  must  be  filed 
within  eight  days  from  the  date  of  the  service  of  such 
notice,  or  the  report  will  stand  confirmed.  If  such  excep- 
tions to  the  referee's  report  are  filed  and  served  as  above 
specified,  they  may  be  brought  to  a  hearing  at  any  special 
term  of  the  court,  on  the  notice  of  any  party  interested 
therein.* 

Where  parties  who  have  appeared  on  the  reference  are 
entitled  to  file  exceptions  to  the  report,  they  must  be  served 


nevertheless,    file    them    with    his  v.   Phillips,  3  N.  T.  Leg.  Obs.  35 

report,   even  though   the    stenogra-  (1844). 

pher's  fees  leuiaiu  unpaid.     Pope  v.  '■'Franklin  v,  VanCott,  11  Paige 

Perault,  23  Huu  (N.  Y.)  468  (1880).  Ch.    (N.  Y.)  129   (1844);   Ex  parte 

•Franklin  v.  VanCott,    11  Paige  Allen,  2  N.    J.   Eq.  (1  II.  W.  Gr.) 

Ch.  (N.  Y.)  129  (1844) ;    Hulbert  v.  888  (1841). 

McKay,   8  Paige  Ch.   (N.  Y.)  651  »  N.  Y.  Supreme  Court  Rule  64. 

(1841).     See  Cram  v.  ]\Iitchcll,  3  N.  *  N.  Y.   Supreme  Court  Rule  30. 
Y.  Leg.  Obs.   163  (1844);  Eurchard 


§  764.]     HEAEENG  EXCEPTIONS  TO  EEPOET.        875 

with  notice  of  the  filing  thereof ;  unless  exceptions  are  served 
and  filed  by  them  within  eight  days  after  the  service  of  the 
notice  of  filing  the  referee's  report,  such  report  will  become 
absolute.*  And  where  no  exceptions  are  taken  to  the 
report  by  such  parties,  it  must  be  confirmed  by  the  entry  of 
the  usual  order;  proof  by  certificate  or  affidavit  that 
such  report  has  become  absolute  must  be  produced,  before 
an  order  to  pay  the  amounts  reported  will  be  granted.* 

§  764.  Hearing  exceptions  to  report. — Where  excep- 
tions have  been  filed  to  the  referee's  report  and  a  motion 
for  the  final  hearing  is  brought  on,  the  party  excepting 
must  furnish  the  court  with  copies  of  the  report  and  of  the 
exceptions  and  proofs  of  claims.*  The  rules  of  the  New 
York  supreme  court*  require  that  the  testimony  taken  by 
the  referee  shall  be  signed  and  filed.*  But  in  those  states 
where  the  testimony  is  not  required  to  be  annexed  to  and 
returned  with  the  report,  if  the  party  excepting  thereto 
desires  to  review  some  question  upon  the  evidence  taken 
before  the  referee,  or  if  any  party  desires  to  use  such 
evidence  on  the  argument  of  the  exceptions,  a  duly  certified 
copy  thereof  must  be  obtained  from  the  referee." 

At  such  hearing  the  court  will  not  only  look  to  the 
proofs  of  claims,  but  it  will  also  receive  any  other  evidence 
in  its  discretion,  such  as  stipulations,  and  the  admissions 
of  the  parties  presented  on  the  hearing.^  But  affidavits 
taken  subsequently  to  the  report  can  not  be  read  at  such 
hearing,  and  no  evidence  can  be  produced  which  was  not 
introduced  before  the  referee.* 

If  the  court  allows  the  exceptions  or  any  of  them,  it  may 
modify  or  set  aside  the  report,  or  send  it  back  to  the  referee 
with  proper  directions  to  proceed  thereon  de  novo,  or  to 


>  Catlin  V.  CatUn,  2  Hun  (N.  Y.)  •  In  re  Merritt,  1  VanSant.   Eq. 

878  (1874) ;  N.  Y.    Supreme  Court  Pr,  566  n ;  1  Hoff.  Ch.  Pr.  545  ;  1 

Rule  30.  Barb.  Ch.  Pr.  549. 

*  Franklin  v.   VanCott,   11  Paige  ■"  Gregory  v.  Campbell,  16  How. 

Ch.  (N.  Y.)  129  (1844).  (N.  Y.)  Pr.  417  (1858). 

»  1  VanSant  Eq.  Pr.  571.  *  Hedges  v.  Cardonnel,  2  Atk.  408 

«  N.  Y.  Supreme  Court  Rule  30.  (1743).     See  Jenkins  v.  Eldredge,  3 

»  See  ante  §  761.  Story  C.  C.  299,  306  (1845). 


876  OPENING  referee's  report.  [§§  765-766. 

correct  specified  defects  therein,  as  by  ascertaining  some  fact 
which  may  be  necessary  to  enable  the  c^urt  to  reach  a 
proper  decision.  In  any  event,  a  new  order  of  reference 
should  be  made,  reserving  the  distribution  of  the  surplus 
and  the  costs  of  the  proceeding  until  the  coming  in  of  the 
new  report. 

§  765.  Confirmation  of  referee's  report. — The  court  has 
power  in  its  discretion  to  confirm,  or  set  aside,  or  refer 
back  the  report  of  a  referee  appointed  to  ascertain  the 
rights  of  claimants  to  surplus  moneys  on  foreclosure,  and  is 
not  restricted  in  the  exercise  of  this  power  by  the  rules 
governing  a  motion  for  a  new  trial.' 

§  766.  Opening  and  setting  aside  referee's  report. — 
After  a  sale  under  a  foreclosure,  and  before  the  distribution 
of  the  surplus  moneys,  a  party  who  has  a  judgment  lien  on 
the  premises  at  the  time  of  the  sale  may  have  the  proceed- 
ings opened,  so  that  he  may  be  heard  upon  his  right  to 
share  in  the  surplus;*  because,  while  the  moneys  remain  in 
the  court  undistributed,  it  may  at  any  time  vacate  an 
order  confirming  the  report  and  refer  the  matter  back  to  the 
referee  for  a  further  report.*  Thus,  it  has  been  held  that 
where  a  general  creditor,  who  had  no  notice  of  the  proceed- 
ings to  distribute  the  surplus  until  after  the  entry  of  the 
order  confirming  the  report  of  the  referee,  applies  to  be 
made  a  party  to  the  proceeding,  his  application  should 
be  granted.* 

But  where  the  report  of  the  referee  directs  a  distribution 
of  the  surplus  as  it  should  be  legally  and  equitably  made, 
his  report  will  not  be  set  aside  or  disregarded,  or  the  order 
confirming  it  vacated,  simply  on  account  of  an  irregularity 


'  Mutual  Life  Ins.  Co.  v.  Anthony,  ( 1883 ) ;  s.  c.  5  Month.  Law  Bull. 

23  N.  Y.  Week.    Dig.  427  (1886);  50. 

Dold  V.  Haggerty,  24  Hun  (N.  Y.)  »  Mutual  Life  Ins.  Co.  v.  Salem,  3 

883   (1881) ;    s.    c.    11    Rep.    746  ;  Hun  (N.  Y.)  117  (1874) ;  s.  c.  5  T.  & 

Mutual  Life  Ins.   Co.   v.  Salem,  3  C.  (N.  Y.)  246. 

Hun  (N.  Y.)  117  (1874) ;  s.  c.  5  T.  «&  <  Germai.  Savings  Bank  v.  Sharer, 

C.  (N.  Y.)  246.  25  Hun  (N.  Y.)  409  (1881). 

•  Citizens'  Savings  Bank  v.  Van 
Tassel,  N.  Y.  Daily  Reg.,  May  28 


§767.]      APPEAL  FROM  ORDER  FOR  DISTRIBTTTIOIf.  877 

in  receiving  or  considering   claims   which   were   not  filed 
with  the  county  clerk.' 

§  767.  Appeal  from  order  for  distribution. — Where  a 
party  finds  himself  aggrieved  by  the  decision  of  the  court 
on  a  motion  for  the  confirmation  of  a  referee's  report,  his 
remedy  is  by  appeal.*  But  it  was  held  in  the  case  of  the 
Mutual  Life  Insurance  Company  v.  Anthony,'  that  an  order 
of  the  general  term  reversing  an  order  of  the  special  term, 
which  confirmed  the  report  of  a  referee  appointed  to  decide 
conflicting  claims  to  surplus  moneys  arising  on  a  foreclosure 
sale,  and  ordering  a  new  hearing  before  another  referee, 
is  not  reviewable  by  the  court  of  appeals.* 

If  the  inquiry  is  considered  as  a  special  proceeding  under 
the  Code,  then  the  order  of  the  general  term  is  not  final  and 
consequently  not  reviewable.  If  it  is  regarded  as  an 
inquiry  made  for  the  information  of  the  court,  then  the  order 
is  not  appealable,  both  because  it  is  not  final  and  because  it  is 
discretionary.  But  where  such  an  order  imposes  costs  of  the 
appeal  upon  the  appellant  absolutely,  and  not  conditionally, 
it  is  in  that  respect  a  final  determination  from  which  an 
appeal  can  be  taken.* 


'  Kingsland  v.  Chetwood,  39  Hun  146  (1879) ;  s.  c.  sub  mm.  Eergen  v. 

(N.  Y.)  602  (1886).  Snedeker,  8  Abb.  (N.  Y.)  N.  C.  50 

-  McRoberts  v.  Pooley,  13  N.  Y.  (1879). 

Civ.  Proc.  Rep.  139  (1887).  *  Bergen  v.  Snedeker,  8  Abb.  (N. 

»  105  N.  Y.  57  (1887).  Y.)  N.  C.  50  (1879). 

*  See  Bergen  v.  Caimen,  79  N.  Y. 


CHAPTER  XXXIV. 


STATUTORY  FORECLOSURE  OR  FORECLOSURE  B"? 
ADVERTISEMENT. 

POWER  OP  SALE— NOTICE  OF  SALE— PUBLISHING,  POSTING,  SERVING 
—CONTENTS  OP  NOTICE— CONDUCT  OF  SALE— SETTING  ASIDE— 
ENJOINING— EFFECT  OF  SALE— AFFIDAVITS  OF  PROCEED- 
INGS—RECORDING   SAME— OPERATE  AS  DEED 
TO  PASS  TITLE-U.  S.  LOAN  COMMIS- 
SIONERS' MORTGAGES. 


g  768.  General  nature.  ^ 

769.  Stipulation  for  foreclosure  by 

advertisement. 

770.  "What    mortgages     may    be 

foreclosed  by  advertisement. 

771.  Foreclosure     by     advertise- 

ment,  vfhere  part  of  debt 
otherwise  collected. 

772.  Who  may  foreclose  by  ad- 

vertisement. 

773.  Notice  of  sale — Publication. 

774.  What  is  a  valid  publication 

of  the  notice. 

775.  Posting  notice  of  sale. 

776.  Delivering  notice  of  sale  to 

county  clerk — His  duty. 

777.  Personal  service  of  notice — 

Who  entitled  to. 

778.  Service    on    personal    repre- 

sentatives. 

779.  Service  of  notice  on  subse- 

quent grantees  and  lienors. 

780.  Service  of  notice  on  wife  or 

widow  of  mortgagor  or  his 
grantee. 

781.  Service  of  notice  upon  subse- 

quent lienors. 

782.  Service  of  notice  of  sale — 

How  made. 

783.  Service  of  notice  by  mail. 

784.  Contents  of  notice  of  sale. 

785.  Description     of     mortgaged 

premises  in  notice. 

786.  Desciiption  of  mortgage  in 

notice. 


I  787.  Notice  should  state  place  ot 
sale. 

788.  Stating  amount  due  in  notice. 

789.  Stating  amount  where  only 

part  of  debt  is  due. 

790.  Statement  in  notice  of  prior 

incumbrances. 

791.  Date  of  sale  and  signature  to 

notice. 

792.  Objections  to  notice  of  sale. 

793.  Postponement  of  sale. 

794.  Place  of  sale. 

795.  By   whom  sale  to   be  con- 

ducted. 

796.  Sale  iff  parcels. 

797.  Terms  of  sale. 

798.  Mortgagee  may  become  pur- 

chaser. 

799.  Setting  sale  aside. 

800.  Grounds  for  setting  sale  aside. 

801.  Enjoining  sale. 

803.  Damages  for    wrongful    in- 
junction. 

803.  Lands    situated   in    another 

state. 

804.  Sale  under  loan  commission- 

ers' mortgage. 

805.  Notice  of  sale  by  loan  com- 

missioners—Contents. 

806.  Publication  of  notice  of  loan 

commissioners'  sale. 

807.  Posting  notice  of  loan  com- 

missioners' sale — Terms. 

808.  Validity  of  loan  commi:ibion' 

ers'  sale. 


§§  768-769.]    FOKECLOSUEE  BY  ADVEETISEMENT.  879 


809.  Purchaser  presumed  to  know 

authority  of  loan  commis- 
sioners. 

810.  Conduct    of   sale — Deed   of 

loan  commissioners. 

811.  Effect  of  sale  by  advertise- 

ment. 

812.  Sale  firm  and  binding  on  all 

parties. 

813.  Effect  of  sale  on  omitted  par- 

ties— Rights  of  tenants. 

814.  Purchaser's  title— What  pass- 

es by  sale. 

815.  Defective  foreclosure. 


§  816.  Afladavits  of  the  proceedingg. 

817.  Sufficiency  of  the  affidavits. 

818.  Contents  of  affidavits. 

819.  Amending  affidavits. 

820.  Recording  affidavits. 

821.  Necessity  of  recording  affida- 

vits. 

822.  Contradicting  affidavits. 

823.  Effect  of  affidavits. 

824.  A  deed  not  necessary. 

825.  Purchaser  obtaining  posses- 

sion —  Summary    proceed- 
ings. 


§  768.  General  nature. — Statutory  foreclosure,  or  fore- 
closure by  advertisement,  is  exclusively  a  creature  of  legisla- 
tive enactment  in  the  various  states  where  it  is  allowed  ;* 
every  requirement  of  the  statute  must  be  strictly  complied 
with,  as  failure  to  comply  with  any  of  its  material  directions 
will  render  the  foreclosure  irregular  and  void." 

§  769.  Stipulation  for  foreclosure  by  advertisement. — 
While  it  is  true  that  the  parties  to  a  mortgage  may  contract 
for  a  private  sale   of  the  premises  without  notice,*  in  the 


'  As  to  the  provisions  in  New 
York,  see  N.  Y.  Code  Civ.  Proc 
§  2387.  et  seq. 

»Cole  V.  Moffltt,  20  Barb.  (N. 
Y.)  18  (1854);  St.  John  v.  Bump- 
Stead,  17  Barb.  (N.  Y.)  100  (1852) ; 
Stanton  v.  Kline,  16  Barb.  (N.  Y.) 
9  ( 1852 )  ;  Cohoes  v.  Goss,  18 
Barb.  (N.  Y.)  137  (1852);  King 
V.  Duntz,  11  Barb.  (N.  Y.)  191 
(1851);  VanSlyke  v.  Sbelden,  9 
Barb.  (K  Y.)  278  (1850)  ;  Low  v. 
Purdy,  2  Lans.  (N.  Y.)  422  (1869). 
See  Lawrence  v.  Farmers'  Loan  & 
Trust  Co.,  13  N.  Y.  200  (1855); 
8.  c.  64  Am.  Dec.  512 ;  Pow- 
ell v.  Tuttle,  3  N.  Y.  396,  401 
(1850) ;  People  v.  Board  of  Police,  6 
Abb.  (N.  Y.)  Pr.  162,  164  (1858) ; 
Doughty  V.  Hope,  3  Den.  (N.  Y.) 
694  (1847) ;  s.  c.  1  N.  Y.  79  ;  Striker 
V.  Kelly,  2  Den.  (N.  Y.)  323,  330 
(1845) :  Sherwood  v.  Reade,  6  Hill 


(N.  Y.)  431  (1844) ;  Sharp  v.  John, 
son,  4  Hill  (N.  Y.)  92,  99  (1843) ;  s. 
c.  40  Am.  Dec.  259  ;  Sharp  v.  Spear. 
4  Hill  (N.  Y.)  76,  84  (1843) ;  Bloom 
V.  Burdick,  1  Hill  (N.Y.)  141  (1841); 
s.  c.  37  Am.  Dec.  299  ;  Thatcher 
V.  Powell,  19  U.  S.  (6  Wheat.) 
119  (1821);  bk.  5L.ed.  221 ;  Lockett 
V.    Hill,  1  Wood  C.  C.  552  (1873). 

For  a  history  of  the  statute  for 
foreclosure  by  advertisement  in 
New  York,  see  Mowry  v.  Sanborn, 
68  K  Y.  153  (1877);  s.  c.  72 
N.  Y.  534  (1878);  65  N.  Y.  581 
(1875) ;  62  Barb.  (N.  Y.)  223  (1872); 
11  Hun  (N.  Y.)  545  (1877) ;  7  Hun 
(N.  Y.)  380  (1876)." 

3  Elliott  V.  Wood,  45  N.  Y.  71, 
78  (1871).  See  Lawrence  v.  Farmers' 
Loan  &  Trust  Co.,  13  N.  Y.  200 
(1855) ;  Montague  t.  Dav/es,  94 
Mass.  (12  Allen),  397  (1866).  The 
validity  of  such  a  power  was  at  first 


880 


STATUTORY   FORECLOSURE. 


[§  769. 


absence  of  a  positive  statutory  prohibition,  yet  such  contracts 
>are  contrary  to  the  general  policy  of  statutes  providing  for 
foreclosure  by  advertisement ;  to  render  such  sales  valid  and 
to  bar  the  equity  of  redemption,  they  must  be  made  strictly 
in  accordance  with  the  requirements  of  such  statutes.' 

The  statute  of  a  state  regulating  the  foreclosure  of  mort- 
gages by  advertisement,  does  not  apply  to  mortgages  on 
real  estate  without  the  state ;'  consequently,  the  courts  of 
New  York  have  refused  to  enjoin  a  resident  mortgagee 
of  lands  situated  without  the  state,  from  selling  them  by 
public  sale  within  the  state  according  to  the  terms  of  the 
mortgage,  merely  on  the  allegation  that  such  power  is  void, 
where  it  does  not  appear  that  the  power  is  void  by  the  law 
of  the  state,  or  territory,  where  the  lands  are  situated.* 

While  it  is  necessary  under  the  statute  to  have  a  mortgage 
duly  recorded  in  the  county  where  the  premises  are  situated, 
before  it  can  be  foreclosed  by  advertisement,*  such  provision 
is  wholly  for  the  benefit  of  the  purchaser,  and  an  omission 
to  have  it  so  recorded  will  not  affect  the  validity  of  the 
sale.* 


doubted,  although  it  is  believed  that 
there  is  no  case  in  which  sales,  there- 
under, were  held  void.  This  doubt 
first  appeared  in  the  case  of  Croft  v. 
Powel,  Comyns.  603  (1739),  and  was 
subsequently  fortified  by  the  remarks 
of  Lord  Eldon  in  the  case  of  Roberts 
V.  Bozon,  1  Pow.  Mort.  9a,  note, 
(1825).  There  seems,  however,  to 
be  no  reason  why  the  absolute  owner 
of  the  fee  should  not  have  the  power 
to  authorize  any  one  to  sell  it  for  his 
benefit,  except  that  when  such  a 
power  is  given  to  the  mortgagee  for 
his  own  benefit  he  may  abuse  the 
trust.  See  Demarest  v.  Wynkoop, 
3  Johns.  Ch.  (N.  Y.)  129  (1817) ;  s. 
C.  8  Am.  Dec.  467  ;  Waters  v.  Ran- 
dall. 47  Mass.  (6  Mete.)  479  (1843) ; 
Kinsley  v.  Ames,  43  Mass.  (2  Mete.) 
29  (1840);  Eaton  v.  Whiting,  20 
Mass.  (3  Pick.)  484  (1826) ;  Clark  v. 
Condit,   18  N.  J.  Eq.    (3  C.  E.  Gr.) 


358  (1867) ;  Corder  v.  Morgan,  18 
Ves.  344  (1811). 

'  Lawrence  v.  Farmers'  Loan 
&  Trust  Co.,  13  N.  T.  200,  211 
(1855). 

«  Elliott  V.  Wood,  45  N.  T.  71 
(1871). 

*  Central  Gold  Mining  Co.  v. 
Piatt,  3  Daly  (N.  T.)  263  (1870).  See 
Carpenter  v.  Black  Hawk  Co.,  65 N. 
Y.  43  (1875) ;  Elliott  v.  Wood,  45  N. 
Y.  71  (1871),  aflE'g  53  Barb.  (K  Y.) 
285. 

<  Wells  V.  Wells,  47  Barb.  (N. 
Y.)  416  (1867). 

*  Jackson  v.  Colden,  4  Cow.  (N. 
Y.)  266  (1825)  ;  Wilson  v.  Troup,  3 
Cow.  (N.  Y.)  195  (1823) ;  s.  c.  14 
Am.  Dec.  458,  aff'g  7  Johns.  Ch. 
(N.Y.)  25  (1825) ;  and  see  Bergen  v. 
Bennett,  1  Cai.  Cas.  (N.Y.)  1  (1804). 
Compare  Wells  v.  Wells,  47  Barb. 
(N.  Y.)  416  (1867). 


§§  770-771.]    WHAT  may  be  foeeclosed.  881 

§  770.  What  mortgages  may  be  foreclosed  by  adver- 
tisement.— Every  mortgage  containing  a  power  of  sale 
may  be  foreclosed  by  advertisement,  providing  it  was 
executed  by  parties  of  competent  age  ;  but  if  it  was  executed 
by  persons  under  the  statutory  age,  it  can  not  be  so  fore- 
closed.* Where  a  mortgage,  containing  a  power  of  sale, 
covenants  for  insurance,  a  failure  to  comply  with  the  cove- 
nant will  constitute  such  a  default  as  to  entitle  the 
mortgagee  to  sell  under  the  power  contained  in  the  mort- 
gage, even  though  it  may  be  impossible  to  comply  with 
the  covenant," 

To  this  general  rule,  however,  there  are  some  exceptions. 
Thus,  it  has  been  held  that  a  mortgage  given  to  secure 
unliquidated  damages  can  not  be  foreclosed  by  advertise- 
ment under  the  statute,'  and  that  a  mortgage  upon  the 
property  of  an  habitual  drunkard  can  not  be  so  foreclosed, 
because  proceedings  for  foreclosure  can  not  be  instituted 
against  the  property  of  an  habitual  drunkard  unless  leave  of 
the  supreme  court  is  first  obtained.*  In  VanBergen  v. 
Demarest,'  it  was  held  that  on  the  application  of  an  infant 
heir  of  the  mortgagor,  chancery  will  intervene  and  order 
the  sale  to  be  made  under  the  direction  of  a  master  or 
referee,  associated  with  the  mortgagee. 

§  771.  Foreclosure  by  advertisement,  where  part  of 
debt  otherwise  collected. — Where  a  mortgage  has  been 
foreclosed  by  an  action  for  a  part  of  the  debt,  and  the 
decree  provided  for  a  second  sale  on  a  subsequent  default,  a 
foreclosure  can  not  be  conducted  by  advertisement.'  And 
if  a  suit  or  a  proceeding  at  law  has  been  commenced  to 
recover  the  debt  secured  by  a  mortgage,  a  foreclosure  by 
advertisement  can  not  be  had,  unless  such  suit  or  proceed- 
ing is  first    discontinued,  or  an    execution    issued   on   the 


'  Burnet  v.  Denniston,    5  Johns.  *  In  re  Parker,  6  Alb.  L.  J.  G24 

Ch.  (N.  Y.)  35  (1821).  (1872). 

8  Walker  v.   Cockey,  38  Md.  75  *  4  Johns.  Ch.  (N.  Y.)  37  (1819). 

(1873).  «  Cox  V.    Wheeler,    7  Paige  Ch. 

» Ferguson  v.    Kimball,  3  Barb.  (N.  Y.)  248,  250  (1838).     See  Gros- 

Oh.  (N.  Y.)  619  (1846).     See  Fergu-  vernor  v.  Day,  Clarke  Cli.  (N.  Y.) 

«on  V.  Ferguson,  2  N.  Y.  360  (1849).  109  (1839). 

(56) 


882  TvrnERE  paet  of  debt  collected.        [§  772. 

Judgment  recovered  therein  has  been  returned  unsatisfied  in 
whole  or  in  part.* 

It  is  thought,  however,  that  the  right  to  foreclose  will 
not  be  extinguished,  where  an  assignee  of  the  mortgage 
takes  a  quit-claim  deed  of  one-half  of  the  mortgaged 
premises;  at  most,  such  a  deed  can  operate  only  to  extinguish 
a  portion  of  the  mortgage  debt,  and  the  assignee  will  be  at 
liberty  to  foreclose  for  the  residue,*  because,  in  the  absence 
of  any  words  of  restriction,  an  assignment  of  a  legal  interest 
in  a  mortgage  passes  the  power  of  sale  with  the  debt 
secured.* 

The  payment  of  a  mortgage  extinguishes  the  power  of 
sale  contained  in  it ;  if  a  statutory  foreclosure  is  conducted 
thereafter,  a  bona  fide  purchaser  at  the  sale  will  acquire  no 
title  in  the  premises.*  A  sale  under  a  power,  after  a  tender 
of  the  mortgage  debt  by  one  entitled  to  redeem,  will  be 
irregular  and  void.* 

§  772.    Who  may  foreclose  by'  advertisement.  — The 

foreclosure  of  a  mortgage  by  advertisement  must  be  made 
by  or  in  the  name  of  the  real  party  in  interest.*  In  those 
states  where  mortgages  are  regarded  as  mere  chattel  interests 
in  the  premises,  the  personal  representatives  of  a  deceased 
mortgagee  may  prosecute  a  statutory  foreclosure.*  This 
rule  includes  the  assignee  of  a  mortgage,'  or  his  executors 
or  administrators.  A  surviving  executor  may  foreclose  by 
advertisement ;"  so  may  a  foreign  executor  or  administrator.** 


•  Grosvenor  v.  Day,  Clarke  Ch.  '  Demarest  v.  Wynkoop,  3  Johns. 
(N.  Y.)  109  (1839).  Ch.  (N.  Y.)  129  (1817). 

«  Klock  V.  Cronkhite,   1  Hill  (N.  «  Cohoes  Co.  v.  Goss,  13  Barb.  (N. 

Y.)  107  (1841).  Y.)  137  (1852) ;  Wilson  v.  Troup.  2 

«Slee  V.  Manhattan  Ins.   Co.,  1  Cow.  (N.  Y.)  195,  231  (1823);  s.  c. 

Paige  Ch.  (N.  Y.)  48  (1828).  14  Am.  Dec.  458. 

•  Cameron  v.  Irwin,  5  Hill  (N.Y.)  »  Demarest  v.  Wynkoop,  3  Johns. 
272  (1843).  See  Warner  v.  Blake-  Ch.  (N.  Y.)  129  (1817) ;  8.  c.  8  Am. 
man,  36  Barb.  (N.  Y.)  501  (1862);  Dec.  467. 

aS'd  4  Keyes  (N.  Y.)  487.  '<»  Averill  v.  Taylor,  5  How.  (N. 

»  Burnet  v.  Denniston,  5  Johns.  Y.)  Pr.  476(1850);  s.  c.  1  N.  Y.  Code 

Ch.  (N.  Y.)  35  (1821).  Rep.  N.  S.  213  ;  Doolittle  v.  Lewis, 

•  Cohoes  Co,  V.  Goss,  13  Barb.  (N.  7  Johns.  Ch.  (N.  Y.)  45  (1823). 
Y.)  137  (1852) ;  Wilson  v.  Troup,  3 

Cow.  (N.  Y.)  195  (1823). 


§  773.]  NOTICE    OF    SALE PUBLICATION.  883 

It  has  been  held  in  Wilson  v.  Troup,*  that  the  fact  that  a 
mortgagee  has  attempted  to  convey  portions  of  the  mort- 
gaged premises  will  not  affect  his  right  to  foreclose  in  his 
own  name. 

Where  a  mortgage  secures  several  notes  held  by  different 
parties,  only  the  holder  of  the  mortgage  is  entitled  to  fore- 
close under  the  power  of  sale.  After  a  foreclosure  and  sale, 
he  will  be  deemed  to  hold  the  proceeds  as  trustee  for  the 
parties  in  interest.'  It  is  believed,  however,  to  be  the  better 
practice  in  those  cases  where  two  or  more  persons  are 
jointly  interested  in  the  mortgage,  for  all  to  join  in  its 
foreclosure.* 

§773.  Notice  of  sale— Publication.— The  New  York 
Code  of  Civil  Procedure  provides,*  that  the  person  entitled 
to  execute  a  power  of  sale,  must  give  notice  to  all  parties 
in  the  manner  prescribed,*  that  the  mortgage  will  be 
foreclosed  by  a  sale  of  the  mortgaged  premises,  or  a  part 
thereof,  at  the  time  and  place  specified  in  the  notice.  It 
requires  that  "  a  copy  of  the  notice  must  be  published,  at 
least  once  in  each  of  the  twelve  weeks,  immediately  preced- 
ing the  day  of  the  sale,*  in  a  newspaper  published  in  the 
county  wherein  the  property  to  be  sold,  or  a  part  thereof^, 
is  situated.'" 


«  7  Johns.  Ch.  (N.  T.)  25  (1833),  plied  with,  or  the  proceedings  will 

aff'g  2  Cow.  (N.  Y.)  195 ;  s.  c.  14  be  void.     Cole  v.  Moffltt,  20  Barb. 

Am.  Dec.  458.  (N.  Y.)  18  (1854) ;  Stanton  v.  Kline, 

»  Solberg  v.  Wright,  33  Minn.  224  16  Barb.  (N.  Y.)  9  (1852);  King  v. 

(1885);  Bottineau  v.  ^tna  Ins.  Co.,  Duntz,  11  Barb.  (N.  Y.)  191  (1851) ; 

31  Minn.    125    (1888) ;     Brown    v.  VanSlyke  v.  Shelden,  9  Barb.  (N. 

Delaney,  22  Minn.  349  (1876).     See  Y.)  278(1850). 

Wilson  V.  Troup,  2  Cow.  (N.  Y.)  195  ^Incomputingthetimcforthepub- 

(1823) ;  s.  c.  14  Ara.  Dec.  458  ;  Slee  lication,  posting  and  service  of  the 

V.  Manhattan  Ins.  Co.,  1  Paige  Ch.  notice,  the  first  day  is  to  he  exchuled 

(.N.  Y.)  48  (1828).  and  the  last  day  included.     Bunce 

»  Wilson  V.  Troup,  7  Johns.  Ch.  v.  Reed,  16  Barb.  (N.  Y.)  347  (1853); 

(X.  Y.)  25  (1823),  afE'g  3  Cow.  (N.  Hornby  v.  Cramer,  12  How.  (N.  Y.) 

Y.)  195,   231;  s.   C.   14  Am.  Dec.  Pr.490,493(1855);  Weslgate  v.  Hand- 

458.  lin,  7  How.  (N.  Y.)  Pr.  372  (1853). 

*N.  Y.  Code  Civ.  Proc.  §2388.  'N.  Y.   Code  Civ.  Proc.  §2383. 

'  The  provisions  of  the  statute  as  Astothenoticeof  sale  by  publication, 

to  the  publication,  posting  and  ser-  see  ante  §477.     Where  the  land  is 

vice  of  the  notice  must  be  strictly  com-  situated  in  more  than  oue  county,  the 


884  PUBLISHING    NOTICE    OF    SALE.  [§  774. 

Where  the  notice  is  published  once  in  each  week  fo< 
twelve  successive  weeks,  it  will  be  sufficient,  even  though 
all  the  publications  are  made  within  seventy-eight  days, 
provided  the  first  publication  is  eighty-four  days  prior  to 
the  day  of  sale,  excluding  the  day  on  which  the  sale  is 
made.'  The  first  publication,  to  be  sufficient,  must  in  all 
cases  be  at  least  eighty-four  days  before  the  day  of  sale, 
the  first  day  being  excluded  and  the  last  one  included.* 

§  774.    What  is  a  valid  publication  of  the  notice. — The 

validity  of  the  publication  will  not  be  affected  by  the  fact 
that  the  paper  in  which  the  notice  was  published  was  not 
calculated  to  give  general  information  of  the  sale.*  Neither 
will  a  change  in  the  name  of  the  paper  in  which  the  notice 
is  inserted,  and  its  removal  to  and  consolidation  with 
another  paper  in  the  same  county,  affect  the  validity  of  the 
publication  of  the  notice,  provided  the  paper  otherwise 
retains  its  identity  and  the  advertisement  is  regularly 
inserted.* 

Where  the  publication  of  the  notice  of  sale  is  defective,  in 
not  being  made  as  required  by  statute,  the  proceedings  will 
be  void.  Thus,  the  publication  of  such  a  notice  in  a  weekly 
newspaper  dated  on  Saturday,  the  greater  part  of  the 
edition  being  printed  on  Friday,  has  been  held  not  to  be 
a  sufficient  publication  within  the  statute  for  the  fore- 
closure of  a  mortgage  maturing  on  such  Friday.*  Where 
the  original  publication  of  a  notice  is  defective,  a  republi- 
cation thereof,  with  several  notices  of  postponement,  for 
twelve  weeks,  will  be  a  sufficient  compliance  with  the  statute.' 

The  Code  requires  that  the  first  publication  of  the  notice 
must  be  eighty-four  days  prior  to  the  day  of  sale  specified 


publication  required  by  statute  may  ^  Blake  v.    Dennett,   49  Me.  102 

be  made  in  a  newspaper  in  either  (1861).     See  Bragdon  v.  Hatch,  77 

county.     Wells  v.  Wells,  47  Barb.  Me.  433  (1885). 

(N.  Y.)  416(1867).  '•Perkins  v.  Keller.  43  Mich.  53 

'  Howard  v.  Hatch,  29  Barb.  (N.  (1880). 

Y.)  297  (1859).     See  Anonymous,  1  *  Pratt    v.    Tinkcom,     21    Minn. 

Wend.  (N.  Y.)  90  (1828).     See  post  142  (1874). 

§  774.  6  Cole  V.  Moffitt.  20  Barb.  (N.  Y.) 

*  Bunce  v.  Reed,  16  Barb.  (N.  Y.)  18  (1854). 
347  (1853). 


|§  775-776.]      posTiN^G  kotice  of  sale.  885 

in  the  notice,  but  it  is  thoug^lit  that  the  twelve  publications 
may  be  made  in  less  than  eighty-four  days,  if  they  are  made 
once  a  week  for  twelve  weeks.* 

§  775-  Posting  notice  of  sale. — The  Code  provides,'  that 
"a  copy  of  the  notice  must  be  fastened  up,  at  least  eighty- 
four  days  before  the  day  of  sale,  in  a  conspicuous  place,  at 
or  near  the  entrance  of  the  building,  where  the  county 
court  of  each  county,  wherein  the  property  to  be  sold  is 
situated,  is  directed  to  be  held ;  or,  if  there  are  two  or 
more  such  buildings  in  the  same  county,  then  in  a  like 
place,  at  or  near  the  entrance  of  the  building  nearest  to  the 
property;  or,  in  the  city  and  county  of  New  York,  in  a  like 
place,  at  or  near  the  entrance  of  the  building,  where  the 
court  of  common  pleas  for  that  city  and  county  is  directed 
by  law  to  be  held." 

It  is  only  required  that  the  notice  should  be  affixed  to  the 
door  of  the  building  where  the  county  courts  are  held  ;  it  is 
not  necessary  for  the  person  who  afifixed  the  notice  to  see  it 
there  afterwards,'  because,  where  the  notice  is  once  affixed, 
it  is  presumed  that  it  will  remain  so.  Affixing  the  notice  once 
seems  to  satisfy  the  words  of  the  statute,  and  it  is  said  that 
a  weekly  inspection,  though  prudent,  is  not  necessary.* 
Where  the  land  is  situated  in  two  or  more  counties,  the 
notice  of  sale  must  be  fastened  up  at  or  near  the  court 
house  door  in  each  county,  in  order  to  sustain  the  sale  of 
the  land  in  that  county.* 

§  776.  Delivering  notice  of  sale  to  county  clerk — His 
duty. — The  Code  also  provides,*  that  "  a  copy  of  the  notice 
must  be  delivered,  at  least  eighty-four  days  before  the  day 
of  sale,  to  the  clerk  of  each  county,  wherein  the  mortgaged 


>  N.   Y.  Code  Civ.  Proc.    §  2388.  13  (1827) ;   Hornby  v.    Cramer,   12 

Howard  v.  Hatch,  29  Barb.  (N.  Y.)  How.  (K  Y.)  Pr.  490  (1855). 

297(1859)  ;  George  v.  Arthur,  2  Hun  "  Hornby  v.  Cramer,  12  How.  (N. 

(N.  Y.)  406  (1874) ;  Gautz  v.  Toles,  Y.)  Pr.  490  (1855). 

40    Mich.    725    ( 18T9  ).     See    ante  "  Wells  v.  Wells,  47  Barb.  (N.  Y.) 

§  773.  416  (1867). 

«  N.  Y.  Code  Civ.  Proc.  §  2388.  •  N.  Y.  Code  Civ.  Proc.  §  2388. 

»  Merrit  v.  Bowen,  7  Cow.  (N.  Y.) 


886  WHO   TO    BE    SEEVED    WITH   NOTICE.  [§777. 

property,  or  any  part  thereof,  is  situated.'"  Where  a 
notice  of  sale  filed  in  the  clerk's  ofifice  and  published  for 
the  first  four  weeks,  was,  by  mistake,  dated  April  23,  1858, 
instead  of  1868,  the  court  held  that  the  mistake  was  obvious 
on  inspection  and  could  not  have  misled  any  one,  and  for 
that  reason  did  not  invalidate  the  proceedings.* 

"  A  county  clerk,  to  whom  a  copy  of  a  notice  of  sale  is 
delivered,  as  prescribed  by  the  Code,  must  forthwith  affix 
it  in  a  book,  kept  in  his  office  for  that  purpose ;  must  make 
and  subscribe  a  minute,  at  the  bottom  of  the  copy,  of 
the  time  when  he  received  and  affixed  it;  and  must  index  the 
notice  to  the  name  of  the  mortgagor."* 

§  777.  Personal  service  of  notice  —  Who  entitled 
to. — The  parties  who  are  to  be  served  with  the  notice 
of  sale  on  a  foreclosure  by  advertisement,  are  those  whom 
the  statute  directs  to  be  served  and  no  others,  because  a 
sale  under  a  power,  which  conforms  to  the  statute  regu- 
lating such  sales,  forecloses  all  rights  and  interests  which 
are  subject  to  the  power,*  and  service  upon  parties  not 
subject  to  such  power  is  invalid. 

The  Code  requires  that  a  copy  of  the  notice  must  be 
served  on  the  mortgagor,  or  his  personal  representatives,  on 
the  wife  or  widow  of  the  mortgagor,  and  on  all  subsequent 
grantees  and  lienors.'  Service  of  the  notice  on  the  mortgagor, 
subsequent  grantees,  mortgagees  and  judgment  creditors,  is 
as  necessary  as  the  publication  or  posting  thereof.* 

"The  notice  is  required  to  be  subscribed  by  the  person 
entitled  to  execute  the  power  of  sale,  unless  his  name  dis- 
tinctly appears  in  the  body  of  the  notice,  in  which  case  it 
may  be  subscribed  by  his  attorney  or  agent."^     If  service  of 


•  Wells  V.  Wells,  47  Barb.    (N.  »  N.  Y.  Code  Civ.  Proc.  §  2388. 
T.)  416  (1867).  •  Rathbone  v.  Clarke.  9  Abb.  (N. 

«Mowry  v.    Sanborn,   68  N.  Y.  Y.)  rr.66 (1859),  note;  Cole  v.  Moffitt, 

163  (1877),  reversing  63  Barb.  (N.  20  Barb.  (N.  Y.)  18(1854);  Stanton  v. 

Y.)    223  (1872);    s.    c.  65    N.    Y.  Kline,  16  Barb.  (N.  Y.)  9  (1852); 

581  (1875).  King  v.  Duntz,  11  Barb.  (N.  Y.)  191 

»  N.  Y.  Code  Civ.  Proc.  §  2390.  (1851) ;    VanSlyke    v.    Sheldon,    9 

*  Brackett  v.   Baum,    50    N.    Y.  Barb.  (N.  Y.)  278  (1850). 

8  (1872).  '  N.  Y.  Code  Civ.  Proc.  8  2388. 


§  778.]     seeyijS-g  persojs^al  representatives.  887 

the  notice  is  not  made  upon  a  party  entitled  thereto,  his 
claim  will  not  be  barred  or  foreclosed,  nor  will  his  rights  be 
affected  by  the  sale;  the  assignee  of  a  subsequent  incumbrance 
stands  in  the  place  of  the  original  owner  thereof.  Actual 
notice  of  the  sale  will  not  be  sufficient.' 

Notice  of  the  sale  must  be  given  to  the  mortgagor,*  and 
also  to  the  owner  of  the  equity  of  redemption,  or  the  sale 
will  be  void  as  to  them.* 

§  778.  Service  on  personal  representatives.  — Where 
the  mortgagor  is  dead,  the  notice  must  be  served  on  his 
executor  or  administrator,*  and  where  there  is  none,  one 
must  be  appointed,  and  the  prescribed  service  must  be  made 
upon  him,  in  order  to  secure  a  vahd  foreclosure.* 

It  has  been  said,  however,  that  if  personal  representatives 
have  not  been  appointed,  the  provision  requiring  notice  to 
be  served  on  them  is  inoperative,  and  the  foreclosure  must 
be  conducted  by  an  action  in  equity.*  The  words  "  personal 
representative,"  as  used  in  the  statute  regulating  foreclosures 
by  advertisement,  mean  "executor  or  administrator,"  and 
not  heir  or  devisee.^ 


'  Mowry  v.  Sanborn,  65  N.  Y.  581  (N.  Y.)  Pr.  388  (1882) ;  VnnSrTiaack 

(1875);  Root  v.  Wheeler,   12  Abb.  v.    Saunders,  32  Hua  (N.   Y.)  515 

(N.  Y.)  Pr.  294  (1861) ;    Dwight  v.  (1884). 

Phillips,  48  Barb.  (N.  Y.)  116  (1865);  «  Anderson  v.  Austin,  34  Barb.  (N. 

Winslow  V.  McCall,    32  Barb.  (N.  Y.)  319  (1861). 

Y.)  241  (1860);  Wetmore  v.  Roberts,  '  See    Anderson    v.     Austin,     34 

10  How.   (N.    Y.)    Pr.    51    (1853);  Barb.(KY.)319(1861),wIieretherule 

JNIickles  v.  Dillaye,  15  Hun  (N.  Y.)  that,  under  a  statutory  foreclosure  by 

296  (1878).  advertisement, notice  of  the  sale  must 

*  N.  Y,  Code  Civ.  Proc.  §  2388.  be  given  to  the  personal  representa- 
'  St.  John  V.  Bumpstead,  17  Barb.  lives  of  a  deceased  mortgagor,  was 

<N.  Y.)  319  (1852).  construed  in  an  action  for  partition 

••  Cole  V.  Moffitt,  20  Barb.  (N.  Y.)  between  the  heirs  at  law  of  such 

18  (1854);  St.  John  v.  Bumpstead,  mortgagor,  and   a  purchaser  upon 

17  Barb.  (N.  Y.)  100  (1852) ;    Mac-  such  a  foreclosure  sale, — where  two 

kenzie  v.  Alster,  64  How.  (N.  Y.)  mortgagors,     husband    and     wife, 

Pr.    388    (1882) ;     VanSchaack    v.  owning  separate  parcels,  united  in  a 

Saunders,  32  Hun  (N.  Y.)  515  (1884);  mortgage  covering  both  parcels,  and 

Low  v.  Purdy,  2  Lans.  (N.  Y.)  422  the  husband  left  a  will  devising  the 

(1869) ;    N.     Y.    Code    Civ.    Proc.  premises  and  naming  executors,  but 

§  23S8.  none  were  ever  appointed  or  quali- 

*  Mackenzie  v.    Alster,  64  How.  lied,  nor  were  administrators  witb 


888  SERVING    SUBSEQUENT    GRANTEES.  [§779. 

§  779.  Service  of  notice  on  subsequent  grantees  and 
lienors. — It  is  necessary  to  give  the  owner  of  the  equity  of 
redemption  notice,  in  order  to  make  a  foreclosure  vaUd  as 
against  him.'  As  it  is  also  necessary  to  give  notice  to  a 
junior  mortgagee,  or  his  assignee,  in  order  to  render  the 
foreclosure  of  a  senior  mortgage  valid  as  against  him,  the 
assignment  should  be  recorded,  or  the  assignee  will  not  be 
entitled  to  notice."  The  holder  of  a  junior  mortgage, 
through  an  unrecorded  assignment,  must  be  served  with 
notice,  where  the  foreclosing  mortgagee  has  actual  knowl- 
edge of  the  interest  of  such  assignee." 

Subsequent  grantees  and  mortgagees,  whose  conveyances 
or  mortgages  are  not  recorded  at  the  time  of  the  first 
publication  of  the  notice,  are  not  entitled  to  service  thereof, 
where  their  interests  are  unknown  to  the  foreclosing  mort- 
gagee ;*  but  where  the  statute  requires  notice  to  be  served, 
not  only  on  those  subsequent  grantees  and  mortgagees 
"  whose  conveyances  shall  be  upon  record  at  the  time  of  the 
first  publication  of  the  notice,"  but  also  upon  all  persons 
having  a  lien  by  or  under  a  judgment,  it  has  been  held,  that 
the  lien  of  a  judgment  perfected  after  the  publication  of  the 


the    will    annexed    ever    appointed  (1882) ;  s.  c.  12  Abb.  (N.  Y.)  N.  C. 

upon  his  estate,  and  the  wife  died  110;  Northrup  v.  Wheeler,  43  How. 

intestate,  and  no  letters  of  adminis-  (N.  Y.)  Pr.  123  (1872) ;  Leonard  v. 

tration  were  issued  upon  her  estate.  Morris,    9    Paige    Ch.    (N.    Y.)    90 

VanSchaack  v.   Saunders,   32  Hun  (1841) ;  Shillaber  v.  Robinson,  97  U. 

(N.  Y.)  515  (1884),    citing   Mowry  S.  (7  Otto),  68  (1877) ;  bk.  24  L.  ed. 

V.  Sanborn,  68  N.  Y.  153(1877);  In  967;  2  Barb.  Ch.  Pr.  (2d  ed.)  176. 

re  Second    Ave.    Methodist  Episc.  '  St.  John  v.  Bumpstead,  17  Barb. 

Church.  66  N.  Y.  395  (1876) ;  Hart-  (N.  Y.)  100  (1852) ;  N.  Y.  Code  Civ. 

nett  V.  Wandell,  60  N.  Y.  346,  349  Proc.  §  2388. 

(1875) ;    s.    c.    19  Am.    Rep.    194  ;  «  Winslow  v.  McCall,  82  Barb.  (N. 

Lawrence  v.  Farmers'  Loan  &  Trust  Y.)  241  (I860)*;  Wetmore  v.  Roberts, 

Co.,  13  N.  Y.  211  (1855);  Anderson  10    How.    (N.    Y.)    Pr.    51    (1853); 

V.    Austin,   34  Barb.    (N.    Y.)  319  Decker  v.  Boice,  19  Hun(N.  Y.)  153 

(1861);    Bryan   v.    Butts,   27   Barb.  (1879). 

(N.  Y.)  503  (1857) ;  Cole  v.  Moffitt,  ^  So„ie  v.  Ludlow,  3  Hun  (K  Y.) 

20  Barb.  (N.  Y.)  18  (1854) ;  Cohoes  503  (1875)  ;  s.  c.  6  T.  «&  C.  24. 

Co.    v.    Goss,    13    Barb.   (N.    Y. )  *  See  Decker  v.  Boice,  19  Hun  (N. 

137  (1852) ;  King  v.  Duntz,  11  Barb.  Y.)  152  (1879) ;  aff  d  83  N.  Y.    215 

(N.   Y.)  191  (1851) ;    Mackenzie  v.  (I88O) ;    N.    Y.    Code    Civ.    Proc. 

Alster,   64  How.   (N.    Y.)  Pr.    38S  ^  2388,  subd.  4. 


§  780.]  SERVING    WIFE    OF   MOETGAGOE.  8S9 

first  notice,  but  before  the  sale,  will  not  be  extinguislied, 
unless  notice  is  served  upon  the  judgment  creditor  as 
required  by  statute.' 

§  780.  Service  of  notice  on  wife  or  widow  of  mort- 
gagor or  his  grantee. — The  Code  requires,'  that  a  copy 
of  the  notice  of  sale  shall  be  served  "  upon  the  wife  or 
widow  of  the  mortgagor,  and  upon  the  wife  or  widow  of 
each  subsequent  grantee,  whose  conveyance  was  so  recorded, 
then  having  an  inchoate  or  vested  right  of  dower,  or  an 
estate  in  dower,  subordinate  to  the  lien  of  the  mortgage." 
Where  a  wife  has  joined  her  husband  in  the  execution 
,  of  a  mortgage,  she  thereby  becomes  a  mortgagor,  and  as 
such  is  entitled  to  service  of  notice.' 

The  inchoate  dower  of  the  wife  of  the  owner  of  premises, 
which  are  subject  to  a  mortgage  for  purchase  money,  will  not 
be  barred  by  foreclosure  by  advertisement,  unless  she  is 
served  with  a  notice  of  the  sale.*  Service  on  her  husband 
alone  will  not  be  sufficient,  for  while  a  wife  does  not  derive 
title  from  her  husband,  yet  she  claims  under  him  within  the 
meaning  of  the  statute,  and  a  sale  under  the  power  must  be 
regularly  made  in  order  to  bar  her  dower.* 

While  an  omission  to  serve  the  notice  on  the  mortga- 
gor's widow,  where  she  joined  him  in  the  execution  of  the 
mortgage,  is  probably  not  fatal  to  the  foreclosure,  yet  it  is 
such  a  defect  that  her  dower  will  not  be  barred.'  The  wife 
of  a  subsequent  grantee  of  mortgaged  premises,  is  entitled 
to  service  of  the  notice  of  foreclosure  by  advertisement;  if  she 
is  not  served,  her  right  of  dower  will  not  be  cut  off.'  And 
the  wife  of  a  grantee   of   premises  already  mortgaged  for 


'    •  GrofiE  V.  Morehouse,   51  N.  Y.  '  Biackett  v.  Baum,   50  N.  Y.  8 

503  (1873).  (1872). 

»  N.  Y.  Code  Civ.  Proc.  §  2388.  «  Kins:  v.  Duntz,  11  Barb.  (N.  Y.) 

«  Anderson  v.    Austin,   34   Barb.  191  (1851). 

(N.  Y.)  319  (1861) ;  King  v.  Duntz,  '  Raynor  v.  Raynor,  21  Tlun  (N. 

11  Barb.   (N.  Y.)  191  (1851) ;   Low  Y.)    36    (1880).     See    Northrop    v. 

V.    Purdy,    2    Lans.    (N.    Y.)    423  Wheeler,  43  How.  (N.  Y.)  Pr.  122 

(1869),  (1872). 

*  Northrop  v.  Wheeler,  43  How. 
(N.  Y.)  Pr.  122  (1872). 


890  SEEVICE    OF    NOTICE    OF   SALE.     [§§  781-782. 

part  of  the  purchase  money,  should  be  served  with  the 
notice,  in  order  to  bar  her  inchoate  right  of  dower.* 

§  781 .    Service  of  notice  upon  subsequent  lienors. — The 

Code  requires  the  notice  to  be  served  upon  every  "  person 
having  a  Hen  upon  the  property  subsequent  to  the  mort- 
gage, by  virtue  of  a  judgment  or  decree,  duly  docketed  in  the 
county  clerk's  office,  and  constituting  a  specific  or  general 
lien  upon  the  property.""  It  seems  that  the  lien  of  a  person 
entitled  to  notice,  but  upon  whom  the  notice  was  not  served, 
is  not  destroyed  nor  in  any  way  affected  by  the  sale,  even 
though  he  had  actual  notice  of  such  sale.* 

All  judgment  creditors,  whose  liens  were  perfected  subse- 
quently to  the  mortgage,  are  entitled  to  notice;  and  where 
the  statute  requires  the  notice  to  be  served  upon  every 
person  having  a  lien  by  or  under  a  judgment,  the  lien 
of  a  judgment  perfected  after  the  publication  of  the  first 
notice,  and  before  the  sale,  will  not  be  cut  off,  and  the 
lienor's  right  of  redemption  will  not  be  barred,  unless  notice 
is  served  upon  him  as  prescribed  by  the  statute.* 

§  782.    Service  of  notice  of  sale — How  made. — The 

New  York  Code  of  Civil  Procedure  provides,*  that  service 
of  the  notice  of  sale  must  be  made  as  follows:  (i)  **  Upon 
the  mortgagor,  his  wife,  widow,  executor,  or  administrator, 
or  a  subsequent  grantee  of  the  property,  whose  conveyance 
is  upon  record,  or  his  wife  or  widow ;  by  delivering  a  copy 
of  the  notice,  as  prescribed  in  article  first  of  title  first  of 
chapter  fifth  of  this  act,  for  delivery  of  a  copy  of  a 
summons,  in  order  to  make  personal  service  thereof  upon 
the  person  to  be  served ;  or  by  leaving  such  a  copy, 
addressed  to  the  person  to  be  served,  at  his  dwelling- 
house,  with  a  person  of  suitable  age  and  discretion,  at  least 
fourteen  days  before  the  day  of  sale.  If  said  mortgagor  is 
a  foreign  corporation,  or  being  a  natural  person,  he,  or  his 


•  Northrop  v.  Wheeler,   43  How.  Roberts,  10  How.  ( N,  Y. )  Pr.  51 

(N.  Y.)  Pr.  122  (1872).  (1853). 

»  N.  Y.  Code  Civ.  Proc.  §  2388.  *  Grofl  v.  Morehouse,  51   N.  Y. 

•Root  V.  Wheeler,  12  Abb.  (N.  503(1873). 
Y.  )  Pr.   294  ( 1861 ) ;    Wetmore  v.  »  N.  Y.  Code  Civ.  Proc.  §  2389. 


§  783.]  SERVUfG    NOTICE   BY   JIAIL.  801 

wife,  widow,  executor,  or  administrator,  or  a  subsequent 
grantee  of  the  property,  whose  conveyance  is  upon  record,  or 
his  wife  or  widow,  is  not  a  resident  of  or  within  the  state, 
then  service  thereof  may  be  made  upon  them  in  like  manner, 
without  the  state,  at  least  twenty-eight  days  prior  to  the 
day  of  sale.'" 

(2)  "  Upon  any  other  person,  either  in  the  same  method, 
or  by  depositing  a  copy  of  the  notice  in  the  post-ofifice, 
properly  inclosed  in  a  post-paid  wrapper,  directed  to  the 
person  to  be  served,  at  his  place  of  residence,  at  least 
twenty-eight  days  before  the  day  of  sale."* 

§  783.  Service  of  notice  by  mail. — In  foreclosing  a  mort- 
gage by  advertisement,  personal  service  of  the  notice  of 
sale  is  not  always  necessary,  though  the  parties  to  be  served 
may  reside  in  the  same  town  as  the  party  foreclosing,  or  his 
attorney.  It  will  be  a  sufficient  compliance  with  the  statute, 
if  properly  directed  copies  of  the  notice  .  of  sale  are 
deposited  in  the  post-office,  addressed  to  the  parties  to  be 
served  at  the  places  where  they  reside.' 

Notice  of  the  sale  may  be  served  on  the  mortgagor  by 
mail,  by  depositing  a  properly  directed  copy  thereof  in  any 
post-ofifice  in  the  state.*  If,  by  mistake,  the  notice  is 
addressed  to  the  mortgagor  at  a  place  other  than  his  residence, 
the  sale  made  thereunder  will  be  void.'  The  affidavit  of 
service  must  show  that  the  places  to  which  the  notices  were 
mailed  to  the  parties  addressed,  were  the  actual  residences 
of  such  parties.'  Whfere  the  affidavit  fails  to  show  these 
facts,  the  omission  will  be  fatal,  because  the  proceedings  to 
foreclose  a  mortgage  by  advertisement  are  strictly  statutory, 
and  omissions  can  not  be  subsequently  supplied,  nor  defects 
in  the  affidavits  remedied,  in  a  court  of  equity.* 


«  N.  Y.  Code  Civ.  Proc.  §  2389,  as  »  Robinson  v.  Ryan,  25  K  T.  320 

amended  by  Laws  of  1887,  chap.  685;  (1862). 

Bee  also  §  419  et  seq.  *  Dwight  v.  Phillips,  48  Barb.  (N. 

2  N.  Y.  Code  Civ.  Proc.  §  2389.  Y.)  116  (1865). 

»  Stanton  v.  Kline    11  N.  Y.  196  '  Dwight   v.    Phillips,    48    Barb. 

(1854).  (N.  Y.)  116  (1865).    Co7\ira,  Bunce  v. 

*  Bunce  v.  Reed,  16  Barb.  (N.  Y.)  Reed,  16  Barb.  (N.  Y.)  347  (1853). 
347  (1853). 


892  CONTENTS    OF   NOTICE    OF   SALE.  [§784. 

It  has  been  said,  that  under  a  statute  requiring  the  notice 
to  be  folded  and  directed,  the  direction  must  be  written 
on  the  notice  itself,  if  it  is  sent  unsealed ;  if  the  direction  is 
written  upon  an  unsealed  envelope,  containing  a  notice  sent 
as  a  circular,  the  service  will  not  be  sufficient.*  If  service  of  the 
notice  is  made  by  mail,  the  time  is  to  be  counted  from  its 
deposit,  and  not  from  the  date  of  the  post-mark,  or  the  time 
of  forwarding."  Where  the  service  is  made  by  mail  upon 
a  person,  naming  him  as  "  administrator,"  such  service  will 
be  sufficient,  if  the  notice  is  addressed  to  the  proper  person, 
without  adding  the  word  "  administrator."* 

§  784.  Contents  of  notice  of  sale. — The  New  York  Code 
of  Civil  Procedure  requires,*  that  the  notice  of  sale  must 
specify :  "  (i)  The  names  of  the  mortgagor,  of  the  mort- 
gagee and  of  each  assignee  of  the  mortgage.  (2)  The  date 
of  the  mortgage,  and  the  time  when,  and  the  place  where, 
it  is  recorded.  (3)  The  sum  claimed  to  be  due  upon  the 
mortgage,  at  the  time  of  the  first  publication  of  the  notice, 
and,  if  any  sum  secured  by  the  mortgage  is  not  then  due, 
the  amount  to  become  due  thereupon.  (4)  A  description 
of  the  mortgaged  property,  conforming  substantially  to 
that  contained  in  the  mortgage." 

The  notice  should  show  that  the  purpose  of  the  sale  is  to 
foreclose  the  mortgage,  or  what  is  equivalent,  that  a  sale 
will  be  had  by  virtue  of  a  power  contained  in  the  mortgage.* 
It  is  believed  that  most  persons  would  readily  perceive  the 
purpose  of  the  notice,  even  if  it  were  not  distinctly  stated  ; 
for  that  reason  it  is  not  necessary  to  state  distinctly  that  the 
mortgage  will  be  foreclosed,  if  notice  of  a  sale  according 


'  Rathbone  v.  Clarke,  9  Abb.  (N.  from  the  time  of  the  post-mark  or 

Y.)  Pr.  66  n.  (1859).  the  forwarding  of  the  letter. 

*  Hornby  v.  Cramer,  12  How.  (N.  *  George  v.  Arthur,  2  Hun  (N.  Y.) 

Y.)  Pr.  490  (1855).     Thus,  were  the  406  (1874) ;  s.  c.  4  T.  &  C.  (N.  Y.) 

act  requires  the  letter  containing  the  685.    See  Howard  v.  Hatch,  29  Barb, 

notice  to  be  deposited  in  the  post-  (N.  Y.)  297  (1859). 
office  twenty -eight  days  prior  to  the  *  N.  Y.  Code  Civ.  Proc.  §  2391. 

time    specified    for    the    sale,    the  »  Judd  v.  O'Brien,  21  N.  Y.  18G 

twenty-eight  days  are  to  be  counted  (1860). 
from  the  lime  of  deposit,  and  not 


|§  785-786.]    CONTENTS    OF   NOTICE    OF    SALE. 


893 


to  the  requirements  of  the  statute  is  given.'  Words 
which  would  import  a  sale  of  the  mortgage,  instead  of  a  sale 
of  the  land,  if  literally  construed,  will  not  vitiate  the  notice, 
if  the  apparent  meaning  is  that  a  sale  of  the  land  is 
intended.' 

The  notice  need  not  state  that  the  subscribers  have  a 
lawful  right  or  authority  to  foreclose  ;'  and  where  executors 
or  administrators  seek  to  foreclose  by  advertisement,  it 
is  not  necessary  that  their  authority  to  do  so  should  be 
set  forth  in  the  notice.  It  will  be  sufificient  if  they  sub- 
scribe the  notice  as  "  administrators  "  or  as  "  executors  " 
of  the  last  will  and  testament  of  the  deceased  mortgagee.* 

§  785.     Description  of  mortgaged  premises  in  notice. — 

The  description  of  the  mortgaged  premises  in  the  notice  of 
sale  must  conform  substantially  to  that  contained  in  the 
mortgage,  or  the  sale  will  be  invalid.*  Thus,  in  a  case 
where  the  mortgage  referred  to  a  map  on  file,  and  stated 
that  the  premises  contained  a  particular  number  of  acres, 
and  the  notice  gave  the  number  of  the  lot,  but  gave  neither 
its  meets,  nor  bounds,  nor  stated  the  quantity  of  land,  and 
did  not  refer  to  the  map  or  show  whether  the  land  was  a 
village  lot  or  a  farm,  it  was  held  that  the  foreclosure  did  not 
comply  with  the  statute,  and  was  void.  In  such  a  case,  a 
statement  of  the  quantity  of  land  and  a  reference  to  the  map 
are  substantial  parts  of  the  description,  and  must  be  given.' 

§  786.  Description  of  mortgage  in  notice. — The  notice 
of  sale  must  specify  the  names  of  the  mortgagor  and  the 
mortgagee,  and  of  each  assignee  of  the  mortgage.'  Where 
two  mortgages  are  being  foreclosed,  it  is  believed  that   a 


>  Leet  V.  McMaster,  51  Barb.  (N.  «  Rathbone  v.  Clarke,  9  Abb.  (N. 

Y.)  236  (1868).  Y.)  Pr.  66  n.  (1859). 

2  Judd  V.  O'Brien,  21  N.  Y.  186  '  N.  Y.  Code  Civ.  Proc.   §  2391. 

(1860).  It  is  thought,  where  a  mortgage  has 

*  People  ex  rel.   Bridenbccker  v,  been  assigned  as  collateral  security 
Prescott,  3  Hun  (N.  Y.)  419  (1875).  for  a  debt,  and  the  debt  is  paid  before 

*  People  ex  rel.  Bridenbccker  v.  notice  of  the  sale  is  given,  that  the 
Prescott,  3  Hun  (N.  Y.)  419  (1875).  notice    need    net    name    such    as. 

*  Rathbone  v.  Clarke,  9  Abb.  (N.  signee,    he  no    longer  having    any 
Y.)  Pr.  66  n,  (1859).  interest    in    such   mortgage.       See 


894  CONTENTS    OF   NOTICE   OF   SALE.    [§§787-788. 

single  notice  will  be  insufficient,  especially  if  the  descriptions 
of  the  premises  are  not  identical.'  The  notice  will  sufficiently 
specify  the  place  where  the  mortgage  is  recorded,  if  it  states 
the  clerk's  book  and  the  date  of  record,  although  the  number 
of  the  book  may  be  erroneously  given.' 

It  seems  that  the  omission  of  the  name  of  the  mortgagee 
from  the  notice  is  not  a  fatal  error,  where  there  is  an  accurate 
reference  to  the  record  of  the  mortgage  in  the  clerk's  office, 
and  no  intention  to  mislead  is  shown ;'  but  an  omission  or  a 
mistake  which  tends  to  mislead  will  always  be  fatal,  such  as 
using  the  word  "  mortgagee  "  for  the  word  "  mortgagor."* 

§  787.  Notice  should  state  place  of  sale. — To  be  valid, 
the  notice  should  state  the  place  of  sale.*  It  has  been  said 
that  a  notice,  stating  that  the  sale  will  take  place  at  the  city 
hall,  but  not  stating  in  what  part  of  the  city  hall,  is  good, 
since  by  usage  the  rotunda  is  the  established  part  of  the 
building  for  such  sales  ;  this  is  also  true  of  a  notice  of  sale 
at  the  Merchants'  Exchange.* 

§  788.  Stating  amount  due  in  notice. — As  the  notice  of 
sale  is  required  to  state  the  amount  due  at  the  time  of  the 
first  publication  thereof,  it  follows  that  a  mortgage  given  as 
security  for  unliquidated  damages,  can  not  be  foreclosed  by 
advertisement.'  For  the  convenience  of  the  parties,  though 
not  required  by  statute,  the  amount  claimed  to  be  due  at 


White  V.   McClellan,   62   Md.   347  the  office  of  so  high  a  number  as  the 

(1884).  one  designated.    Judd  v.  O'Brien, 

'  Morse  v.  Byam,  55  Mich.  594  21  N.  Y.  186,  189(1860). 

(1885).  «  Candee  v.  Burke,  1  Hun  (N.  Y.) 

«  Judd  V.  O'Brien,  21  K  Y.  186  546  (1874);  s.  c.  4  T.  &  C.  (KY.)  143. 

(1860).  A  notice  giving  correctly  the  "  Abbott  v.  Banfield,  43  N.  H.  153 

clerk's  office  and  the  date  of  record-  (1861). 

ing  the  mortgage,  though  with  an  *  Burnet  v.  Denniston,  5  Johns, 

error  in  the  number  of  the  book,  is  Ch.  (N.  Y.)  35  (1821). 

a  substantial  compliance  with  the  *  Hornby  v.  Cramer,  12  How.  (N. 

statute.     The  place  where  the  mort-  Y.)  Pr.  490  (1855). 

gage  is  recorded  will  be  sufficiently  '  N.  Y.  Code  Civ.  Proc.   §  2391 ; 

indicated  by  naming  the  office  and  Ferguson  v.  Kimball,   3  Barb.    Ch. 

the  date  oftherecord,  and  possibly  by  (N.  Y.)  616,  619  (1846);  except,  per- 

mentioning  the  office  alone.     It  was  haps,  where  it  contains  within  itself 

80  held,  where  there  was  no  book  in  a  measure  by  which  to  ascertain  the 


§  789.]  STATING    AilOUNT   DUE   IN    NOTICE.  895 

the  time  of  the  first  pubh'cation  of  the  notice,'  should  be 
given  in  dollars  and  cents  ;  yet  a  statement  that  it  is  claimed 
that  a  particular  sum  was  due  at  any  designated  day  prior  to 
the  notice,  will  doubtless  be  sufficient.* 

If  the  advertisement  of  sale  contains  a  false  statement, 
tending  to  deceive  the  public  as  to  the  amount  of  the 
incumbrances,  and  thereby  deters  bidders,  the  sale  will  be 
irregular  and  void.*  But  this  is  not  true  as  to  a  mistake,  a 
correction  of  which  is  published  with  the  notice,  before  it  can 
be  presumed  to  have  influenced  persons  intending  to  bid  ;  as 
where,  by  mistake,  the  notice  of  sale  stated  a  prior  incum- 
brance upon  the  mortgaged  property,  at  twice  its  actual 
amount,  and  a  correction  thereof  was  published  with  the 
notice  two  weeks  before  the  sale.* 

^789.  Stating  amount  where  only  part  of  debt  is 
due. — Where  a  sale  is  made  under  a  power  contained  in  a 
mortgage,  a  portion  of  which  is  not  due  at  the  time  of  the  first 
publication,  the  notice  must  state  the  sum  due  and  also  the 
amount  to  become  due.*  And  where  a  sale  is  made  subject 
to  future  installments,  part  of  which  have  been  paid,  without 
specifying  the  amount  of  such  installments,  the  notice  will 
be  void,'  and  a  sale  under  such  a  notice,  for  a  single 
installment,' will  extinguish  the  lien  of  the  mortgagee  on  the 


amount   of   damages ;    Jackson  v.  Sibley,  5  Lans.   (N.  T.)  55  (1871). 

Turner,  T.Wend.  (N.  Y.)  458  (1831).  See  Klock  v.  Cronkhite,  1  Hill  (N. 

See  Mowiy  V.  Sanborn,  68  N.  Y.  153  Y.)  107(1841) ;  Jencks  v.  Alexander, 

(1877).  11  Paige  Ch.  (N.  Y.)  619  (1845). 

'  Stating  in  the  notice  the  amount  *  Hubbell  v.  Sibley,   5  Lans.    (N. 

due  on  the  day  before  the  first  pub-  Y.)  51   (1871) ;  aff'd  50  N.  Y.    468 

lication,  is  not  fatal.   It  is  surplusage  (1872).     See  Mowry  v.  Sanborn,  62 

to  state  that  the  premises  are  subject  Barb.   (N.  Y.)  223  (1872);  rev'd  on 

to  a  lease  ;  and  the  neglect  to  state  another  point,  65  N.  Y.  581  (1875) ; 

how  long  the  lease  mentioned  in  a  no-  Jencks  v.  Alexander,  11  Paige  Ch, 

ticehas  to  run  will  not  affect  the  sale.  (N.  Y.)  619  (1845). 

Hubbell  V.  Sibley,  5  Lans.   (N.  Y.)  »  N.  Y.  Code  Civ.    Proc.    §  2391. 

61     (1871);    aft'd    50    N.   Y.    468  See  Jencks  v.   Alexander,  11  Paige 

(1872).  Ch.  (N.  Y.)  619,  626  (1845). 

«  Judd  V.  O'Brien,   21  N.  Y.    186,  »  Jencks  v.    Alexander,    11  Paige 

189  (1860).  Ch.    (N.  Y.)  619,  626  (1845);  N.  Y 

*  Burnet  v.   Denniston,  5  Johns.  Code  Civ.  Proc.  §  2391. 

Ch.   (N,  Y.)  35  (1821) ;  Hubbell  v.  i  Minor  v.  Hill,  58  Ind.  176  (1877;; 


896  DATE  OF  SALE  AND  SIGNATURE.  [§§  790-791. 

entire  premises.'  In  such  a  case,  however,  the  mortgagee 
will  be  entitled  to  retain  out  of  the  proceeds  of  the  sale, 
the  sums  due  and  to  become  due  upon  the  mortgage,  besides 
the  costs  and  the  expenses  of  the  foreclosure.* 

§  790.    Statement  in  notice  of  prior  incumbrances.— 

It  is  not  necessary  to  set  forth  in  the  notice  of  sale  incum- 
brances subject  to  which  the  sale  is  to  be  made.  Thus,  the 
unexpired  term  of  a  lease,  subject  to  which  the  premises  are 
to  be  sold,  need  not  be  recited  in  the  notice  of  sale.'  Where 
unnecessary  matters  are  recited  in  the  notice,  they  will  not 
render  it  defective,  and  the  sale  thereunder  void,  unless 
perhaps,  such  matters  mislead  the  public,  and  thereby 
prevent  persons  from  bidding  who  might  otherwise  have 
become  purchasers.  If,  however,  such  matters  are  inserted 
in  the  notice  of  sale  by  mistake,  and  are  corrected  before  it 
can  be  presumed  that  persons  entitled  to  bid  would  be 
influenced  thereby,  the  proceedings  will  not  be  prejudiced.* 

§  791.    Date    of  sale  and  signature  to   notice. — The 

date  of  the  sale  should  be  correctly  given  ;  but  where,  by 
mistake,  an  incorrect  date  is  given,  which  is  obvious  on 
inspection  and  could  not  mislead,  it  will  not  invalidate  the 
proceedings;  as  where,  by  mistake,  1858  was  inserted,  instead 
of  1868.' 

The  Code  requires  the  notice  to  be  subscribed  by  the 
person  entitled  to  execute  the  power  of  sale  ;'  where 
the  name  of  the  mortgagee  was  omitted  from  the  body  of  a 
notice  of  sale,  but  was  signed  at  the  bottom  thereof,  it  was 
held  to  be  sufficient.*     A  notice  signed  by  a  duly  authorized 


8.   c.   26  Am.   Rep.   71.      Compare  Y.)  35,  42  (1821) ;  Jencks  v.  Alexan- 

Hill  V.  Minor,  79  Ind.  48  (1881).  der,  11  Paige  Ch.  (N.  Y.)  619  (1845). 

•  Poweshiek  Co.  v.  Dennison,  36  ^  Mowry  v.  Sanborn,  68  N.  Y.  153 
Iowa,  244  (1873)  ;  s.  c:  14  Am.  Rep.  (1877),  reversing  7  Hun  (N.  Y.) 
524.  380  (1876). 

»  N.  Y.  Code  Civ.  Proc.  §  2404.  «  N.  Y.  Code  Civ.  Proc.  §  2388. 

»  Hubell  V.    Sibley,   5  Lans.  (N.  '  Candee  v.    Burke,   1   Hun  (N. 

T.)  51  (1871).  Y.)  546  (1874) ;  s.  c.  4  T.  &  C.  (N. 

*  See  ante  §  788  ;  Klock  v.  Cronk-  Y.)  143. 
hite,  1  Hill  (N.  Y.)  107  (1841) ;  Bur- 

net  V.  Denniston,  5  Johns.  Ch.  (N. 


§§  792-793.]    OBJECTING  TO  NOTICE  OF  SALE.  897 

person  as  "  executor"  has  been  held  to  contain  a  sufHcient 
statement  of  his  interest  in  the  mortgage,  and  how  it  w  as 
acquired  ;'  and  where  the  name  of  the  person  entitled  to 
execute  the  power  of  sale,  distinctly  appears  in  the  body  of 
the  notice,  it  may  be  subscribed  by  his  attorney  or  agent.* 

§  792.  Objections  to  notice  of  sale. — Where  the  notice 
is  irregular  or  defective,  objections  thereto  should  be 
promptly  made.  It  has  been  said,  that  after  the  lapse  of 
fifteen  years,  a  mortgagor,  or  other  party  interested,  can  not 
question  the  regularity  of  the  notice  of  sale,  and  that 
apparent  deficiencies  will  be  supplied  by  intendment.' 

A  sale  on  foreclosure  by  advertisement  is  entirely  ex  parte, 
and  legal  objections  thereto  can  be  taken  whenever  the 
proceedings  are  properly  brought  in  question.*  Thus,  if  a 
tender  to  redeem  was  refused  by  a  mortgagee,  a  sale  made  by 
him  thereafter  would  be  illegal  and  void,  and  a  fraud  upon 
subsequent  judgment  creditors  and  incumbrancers.* 

§  793.  Postponement  of  sale. — The  New  York  Code  of 
Civil  Procedure  provides,"  that  "  a  sale  may  be  postponed 
from  time  to  time.  In  that  case,  a  notice  of  the  postpone- 
ment must  be  published,  as  soon  as  practicable  thereafter,  in 
the  newspaper  in  which  the  original  notice  was  published ; 
and  the  publication  of  the  original  notice,  and  of  each  notice 
of  postponement,  must  be  continued,  at  least  once  in  each 
week,  until  the  time  to  which  the  sale  is  finally  postponed.'" 

The  usual  practice  is  for  the  party  conducting  the  sale  to 
attend  at  the  time  and  place  appointed  for  the  sale,  and 
to  give  public  notice  of  the  postponement  by  announcement ; 


'  People  ex  rel.  Bridenbecker  v.  300    (1850) ;   Burnet  v.    Denniston, 

Prescott,  3  Hun.  (N.  Y.)  419  (1875).  5  Johns.  Ch.  (N.  Y.)  35  (1821). 

See  N.  Y,  Code  Civ.  Proc.  g§  2388,  »  See  Miller  v.  Finn,   1  Neb.  254 

2391.  (1867). 

«  N.  Y.  Code  CiT.  Proc.  §  2388.  «  N.  Y.  Code  Civ.  Proc.  §  2392. 

» Bergen  v.  Bennett,  1   Cai.    Cas.  '  Westgate   v.    Handlin,  7  How. 

(N.  Y.)  1  (1804) ;  s.  c.  2  Am.  Dec.  (N.  Y.)  Pr.  372  (1853) ;    Sayles  v. 

281 ;    Demarest     v.     Wynkoop,    3  Smith,  12  Wend.  (N.  Y.)  57  (1834) ; 

Johns.  Ch.  (N.  Y.)  129  (1817) ;  s.  c.  8.  c.  27  Am.  Dec.  117.     See  Jackson 

8  Am.  Dec.  467.  v.    Clark,    7    Johns.    (N.   Y.)    217 

*  Hall  V.  Bartlett,  9  Barb.  (N.  Y.)  (1810). 

(57) 


893  POSTPONING    SALE PLACE    OF    SALE.  [§  70-1. 

and  it  is  believed  that  this  practice  should  be  followed, 
because  a  departure  from  the  established  practice  mirjht  be 
regarded  as  evidence  of  bad  faith.* 

If  a  postponement  is  made  at  the  time  and  place  appointed 
for  the  sale,  by  stating  the  adjourned  time  and  place  to  those 
present,  the  subsequent  notice,  to  be  published  until  the 
time  of  sale,  must  conform  to  the  adjournment,  as  thus 
announced.  Thus,  where  the  announcement,  made  at  the 
time  and  place  first  fixed  for  the  sale,  was  of  an  adjourn- 
ment to  the  tenth  of  the  month,  but  the  printed  notice  was, 
by  mistake,  to  the  sixteenth,  a  sale  had  on  the  sixteenth 
was  held  void." 

Where  a  mortgagee  published  a  notice  under  his  adver- 
tisement of  sale,  that  the  sale  was  to  be  adjourned,  but 
neglected  to  post  a  notice  of  such  adjournment,  the  court 
held  that  he  was  bound  by  his  adjournment,  and  that  his 
sale  made  on  the  original  notice,  disregarding  the  adjourn- 
ment, was  irregular  and  void.'  It  has  been  held  that  where 
the  notice  of  sale  was  for  Sunday,  the  mortgagee  might, 
before  the  day  of  sale,  postpone  it  to  another  day  and  make 
a  valid  sale  under  the  notice.* 

§  794.  Place  of  sale. — The  New  York  Code  of  Civil  Pro- 
cedure provides,'  that  the  sale  must  be  made  "at  public 
auction,  in  the  day  time,  on  a  day  other  than  Sunday  or  a 
public  holiday,*  in  the  county  in  which  the  mortgaged 
property,  or  a  part  thereof,  is  situated  ;  except  that,  where 
the  mortgage  is  to  the  people  of  the  state,  the  sale  may  be 
made  at  the  Capitol."  The  mortgagee's  deed  will  not 
convey  a  title,  unless  the  sale  was  held  at  public  auction 
pursuant  to  the  statutory  notice,  even  though  the  mortgage 


*  Circumstances  tending  to  sliow         •  Jackson  v.  Clark,  7  Johns.  (N. 

fraud  in  the  adjournment  of  a  sale,  Y.)  217  (1810). 
previously  advertised  on  proceedings  *  Westgate  v.  Handlin,   7    How. 

which  were  abandoned,   have  been  (K  Y.)  Pr.  372  (1853). 
held  not  to  amount  to  fraud  in  the  *  N.  Y.  Code  Civ.  Proc.  §  2393. 

sale.     See   Leet    v.    McMaster,    51  •  Selling  on  Sunday  is  not  unlaw- 

Barb.  (N.  Y.)  236  (1868).  ful,  for  selling  land  under  a  statutory 

»  Miller  v.  Hull,  4  Den.  (N.  Y.)  foreclosure  is  not  a  judicial  procecd- 

104(1847).  ing.     Sayles    v.   Smith,   18  V^eiaJL 


§§  795-796.]  CONDUCT  of  sale.  899 

may   contain   a   power   of   sale,  expressly  authorizing  the 
mortgagee,  on  default,  to  sell  the  premises  at  private  sale.* 

§795.  By  whom  sale  to  be  conducted. —  A  sale  is 
usually  conducted  by  the  mortgagee,  but  if  it  is  made  to 
appear  likely  to  the  court  that  he  will  exercise  his  power 
in  a  harsh,  oppressive,  or  improper  manner,  the  court 
will  associate  a  referee  with  him  to  see  that  the  sale  is 
properly  conducted,  and  that  only  so  much  of  the  mortgaged 
premises  is  sold  as  will  be  sufficient  to  satisfy  the  mortgage 
debt.' 

Where  the  sale  is  conducted  by  the  mortgagee,  he  is 
regarded,  in  equity,  as  a  trustee,  and  is  bound  to  conduct 
the  proceedings  in  a  fair  and  just  manner,  and  in  good 
faith,'  and  is  governed  by  substantially  the  same  rules  as 
control  a  sale  made  by  a  referee  in  a.  foreclosure  by  action.* 

§  796.  Sale  in  parcels. — The  New  York  Code  of  Civil 
Procedure  requires,'  that  "  if  the  property  consists  of  two  or 
more  distinct  farms,  tracts,  or  lots,  they  must  be  sold  separ- 
ately ;  and  as  many  only  of  the  distinct  farms,  tracts,  or  lots, 
shall  be  sold,  as  it  is  necessary  to  sell,  in  order  to  satisfy  the 
amount  due  at  the  time  of  the  sale,  and  the  costs  and 
expenses  allowed  by  law.  But  where  two  or  more  buildings 
are  situated  upon  the  same  city  lot,  and  access  to  one  is 
obtained  through  the  other,  they  must  be  sold  together." 

If  the  land  consists  of  distinct  farms,  tracts,  or  lots,  and 
they  are  sold  together,  the  sale  will  be  voidable,  at  least,  if 
not  absolutely  void ;'  but  where  the  premises  do  not  consist 
of  distinct  farms,  parcels,  or  lots,  they  need  not  be  sold 
separately.^     It  is  believed  that  where  lands  are  mortgaged 


(N.  T.)  57  (1834) ;  a  c.  27  Am.  Dec.  503  (1875) ;  s.  c.  6  T.  &  C.  (N.  Y.) 

117.    Where  the  day  first  set  is  Sun-  24.    See  Ellsworth  v.  Lockwood,  43 

day,  a  postponement  from  that  day  N.  Y.  89  (1870). 
■will  be  regular.    Westgate  v.  Hand-         *  See  ante  chap.  xxv. ;  also  Soule  v. 

Mb,  7  How.  (N.  Y.)  Pr.  373  (1858).  Ludlow,  3  Hun  (N.  Y.)  503  (1875) ; 

1  Lawrence  v.  Farmers'  Loan  and  a  c.  6  T.  &  C.  (N.  Y.)  24. 
Trust  Co.,  13  N.  Y.  200  (1855).  *  N.  Y.  Code  Civ.  Proc.  §  2393. 

'  VanBergenv.  Demarest,  4  Johns.  *  Wells  v.  Wells,  47  Barb.  (N.  Y.) 

C!h.  (N.  Y.)  37  (1819).  416  (1867). 

•  Soule  V.  Ludlow,  3  Hun  (N.  Y.)         '  Anderson  v.    Austin,   34  Barb. 


900  CONDUCT    AND   TERMS    OF    SALE.  [§797. 

as  one  undivided  lot,  or  parcel,  and  are  subsequent  y  sub- 
divided, the  mortgagee  is  not  bound  to  sell  them  in  parcels.' 

It  seems,  however,  that  a  court  of  equity  can  give  relief 
against  a  sale  of  the  whole  mortgaged  property  in  one 
parcel,  even  where  mortgaged  as  one  tract,  if  a  party  stand- 
ing in  the  position  of  a  junior  mortgagee,  or  as  owner  of  the 
property,  requests  a  sale  in  parcels,  and  offers  in  good  faith 
to  bid  the  amount  of  the  mortgage,  with  the  costs  and 
expenses  of  the  sale.*  Where  the  parcels  are  so  situated 
that  they  can  be  conveniently  sold  and  conveyed  separately, 
the  general  rule  governing  a  sale  in  parcels  under  a  decree 
and  order  of  sale,'  will  govern  a  sale  in  a  foreclosure  by 
advertisement. 

While  a  mortgagee  is  not  bound  by  the  notice  of  sale  to 
sell  the  mortgaged  premises  in  parcels  in  the  absence  of  a 
request  as  above  stated,  unless  they  are  described  in  parcels 
in  the  mortgage,*  yet  he  may  do  so,  where  the  premises  are 
so  situated  that  he  can  sell  them  to  better  advantage;* 
and  he  may  also  reserve  certain  rights  for  the  benefit  of  the 
owner  of  the  equity  of  redemption,  where  the  property  is 
amply  sufificient  to  pay  the  mortgage  debt.* 

§  797.  Terms  of  sale. — The  Code  does  not  require  that 
the  published  notice  shall  contain  the  terms  of  sale ;  while 
it  is  the  practice  to  conform  the  terms  of  a  sale  to  those 
made  under  decrees  of  foreclosure,  by  stating  in  writing  the 
conditions  upon  which  the  purchaser  is  to  pay  for  and 
receive  the  title,  yet  the  mortgagor,  or  those  claiming  under 
him,  can  not  object  to  the  sale  on  the  ground  that  the  terms 
thereof  were  not  given  in  the  notice  of  foreclosure,  nor  in 


(  N.   Y. )    319    ( 1861 ) ;    Bunce    v  Y.  89  (1870) ;  aff'd  9  Hun  (N.  Y.)  548 

Reed,  16  Barb.  (N.  Y.)  347,  350  (1853);  (1877). 

Holden  v.  Gilbert,  7  Paige  Ch.  (N.  ^  See  ante  chap,  xxiii. 

Y.)  211  (1838).  *  Sherman  v.  Willett,  42  K  Y. 

'  Lamerson   v.    Marvin,  8    Barb.  146,  150  (1870) ;  Griswold  v.  Fowler, 

(N.  Y.)  9  (1850);  followed  in  Ells-  24  Barb.  (N.Y.)  135  (1857);  Lamerson 

worth  V.  Lockwood,  9  Hun  (N.  Y.)  v.  Marvin,  8  Barb.  (N.  Y.)  9  (1850). 
548  (1877) ;    Hubbell    v.    Sibley.    5  ^  Sherman  v.  Willett,  43  N.  Y. 

Lans.  (N.  Y.)  51  (1871).     See  ante  146,  151  (1870). 
§§  489,  492  and  chap,  xxiii.  «  Sherman  v,  Willett,   42  N.  Y. 

*  Ellsworth  V.  Lockwood,  42  K  146  (1870). 


§  798.]  TERMS  OF  SALE.  901 

the  affidavits  of  sale,  and  tl^at  the  owner  of  the  equity 
of  redemption  had  no  knowledge  or  notice  of  the  terms  of 
3ale,  and  had  never  ratified  them.' 

The  sale  may  be  made  for  cash  or  upon  time,  as  to  a  part 
or  the  whole  of  the  amount,  in  the  discretion  of  the  mort- 
gagee, and  where  time  is  given  for  the  payment  of  the 
whole,  or  a  portion  of  the  purchase  money,  the  mortgagee 
may  determine  what  security  he  will  require.*  Where  the 
sale  is  made  for  cash,  a  reasonable  deposit  may  be  required, 
although  the  advertisement  may  not  specify  such  terms, 
nor  state  that  the  terms  would  be  made  known  on  the  day 
of  the  sale.*  Where  a  sale  is  made  for  cash,  payment  may 
be  made  by  a  check;*  or,  by  discharging  a  debt  due  from 
the  mortgagee  to  the  purchaser.* 

Upon  a  sale  under  the  foreclosure  of  a  second  mortgage 
by  advertisement,  it  is  proper  for  the  mortgagee  to  make  the 
sale  subject  to  the  prior  mortgage  ;^  or  he  may  advertise 
and  sell  the  property  free  and  clear  of  all  incumbrances,  if 
the  prior  mortgage  is  due,  and  pay  it  off  out  of  the  proceeds 
of  the  sale. 

§  798.  Mortgagee  may  become  purchaser.— The  Code 
provides,'  that  "  the  mortgagee,  or  his  assignee,  or  the  legal 
representative  of  either,  may,  fairly  and  in  good  faith,  pur- 
chase the  mortgaged  property,  or  any  part  thereof,  at 
the  sale.'"  The  sale  may  be  made  by  the  mortgagee,  or  the 
owner  of  the  mortgage,  and  he  may   himself   become  the 


'  Story  V.  Hamilton,  20  Hun  (N.  •  Story  v.    Hamilton,    86  N.   Y. 

y.)  133  ;  aff'd  86  N.  Y.  428  (1881).  428  (1881),    aflf'g  20  Hun   (N.   Y.) 

«  Cox  V.  Wheeler,  7  Paige  Ch.  (N.  133  (1880). 

Y.)  248,  251   (1838) ;    Whitfield  v.  '  N.  Y.  Code  Civ.  Proc.  ^  2394. 

Riddle,  78  Ala.  99  (1884).  «  Mowry   v.   Sanborn,    68  N.   Y. 

8  Pope  V.  Burrage,  115  Mass.  282  160  (1877);  Hollingsworth  v.  Spald- 

(1874);    Model    House    Assoc,    v.  ing,  54  N.  Y.  636(1873) ;  Hubbell  v. 

Boston,  114  Mass.  133  (1873) ;  Good-  Sibley,  50  N.  Y.  468  (1872),  afif'g  5 

dale    V.    Wheeler,    11    N.    H.    424  Lans.  (N.  Y.)  51  ;  Jackson   v.  Col- 

(1840).  den,   4  Cow.    (N.    Y.)    266  (1825); 

*  McConneaughey    v.     Bogardus,  Valentine  v.  Belden,  20  Hun  (N.  Y.) 

106  111.  321  (1883).  537  (1880);  Cox  v.  Wheeler,  7  Paige 

«  Cooper  V.  Hornsby,  71  Ala.  63  Ch.  (N.  Y.)  248  (1838). 
(1881);  Tartt  v.  Clayton,  109  111.  579 
(1884). 


902  MORTGAGEE   MAT   PURCHASE.  [§798. 

purchaser  and  make  the  affidavit  which  stands  in  the  place 
of  a  deed.' 

It  has  been  held,  that  even  without  the  above  statutory- 
provision,  the  mortgagee,  or  his  assignee,  or  the  legal 
representative  of  either,  would  have  a  right  to  purchase 
the  premises.'  The  better  opinion,  however,  seems  to  be 
that  a  court  of  equity  will  not  allow  the  person  holding  a 
mortgage  containing  a  power  of  sale  to  become  the  purchaser 
at  a  sale  made  thereunder,  unless  he  is  expressly  authorized 
so  to  purchase,  by  the  terms  of  the  mortgage.* 

But  where  the  mortgage  contains  a  provision  allowing  the 
mortgagee  to  become  the  purchaser,  he  may  make  the  deed 
in  his  own  name,  directly  to  himself.*  Such  a  purchase, 
made  by  the  mortgagee  for  his  sole  benefit,  is  valid,  and 
will  effectually  foreclose  the  entire  equity  of  redemption, 
if  he  faithfully  discharges,  in  all  respects,  the  duties  imposed 
upon  him  as  donee  of  the  power.* 

If  a  mortgagee  purchases  on  a  sale  for  an  installment  due, 
his  mortgage  will  be  merged ;  but  it  seems  that  if  a  third 
person  purchases,  the  mortgagor,  on  being  compelled  by 
suit  on  the  bond  to  pay  the  balance  of  the  debt,  is  entitled 
to  an  assignment  of  the  mortgage  to  enable  him  to  secure 
repayment  of  the  debt  out  of  the  land.' 

The  payment  of  a  mortgage  extinguishes  the  power  of 
sale  under  it ;  if  a  statutory  foreclosure  thereof  is  after- 
wards made  for  the  benefit  of  an  assignee  of  the  mortgage, 
and  he  bids  in  the  property,  he  will  acquire  no  title,  because 
one  who  has  no  power  to  sell  is  not  a  purchaser  in  good 


>  Hubbell  V.  Sibley,   5  Lans.   (N.  Cow.   (N.  Y.)  195 ;   Hall  v.   Bliss, 

Y.)51  (1871);  aff'd  50 N.Y.  468 (1873).  118  Mass.    554,  558  (1875);  s.  c.  19 

«  Elliott  V.Wood,  53  Barb.  (N.Y.)  Am.    Rep.    476,    480;    Dexter    v. 

285  (1869) ;  aff'd  45  N.  Y.  71.  Shepard,  117  Mass.  480  (1875). 

3  Hall  V.    Bliss,    118    Mass.    554,  "  See  Wilson  v.  Troup,  7  Johns. 

558  (1875) ;  s.  c.  19  Am.  Rep.  476,  Ch.  (N.  Y.)  25  (1823) ;  s.  c.  2  Cow. 

480  ;  Dyer  v.  Slmrtleff,   112  Mass.  (N.  Y.)   195  ;    Hall    v.    Bliss,    118 

165    (1873);    s.    c.    17    Am.    Rep.  Mass.  554,  558  (1875) ;  s.  c.  19  Am. 

77  ;  Downes  v.  Grazebrock,  3  Meriv.  Rep.  476,  480  ;  Dexter  v.  Shepard, 

200(1817).  117  Mass.  480  (1875). 

*  Wilson     V.    Troup,     7    Johns.  «  Cox  v.  Wheeler,  7  Paige  Ch.  (N. 

Ch.     (N.   Y.)    25    (1823);     s.    c.   2  Y.)  248  (1838). 


§§  799-800.]         SETTma  sale  aside. 


903 


faith  at  his  own  sale.*  Whether  any  person  can  acquire  a 
good  title  at  such  a  sale,  is  questionable.* 

§  799'  Setting  sale  aside. — The  proceedings  in  a  fore- 
closure by  advertisement  may  be  set  aside  for  fraud,  mistake, 
unfairness,  or  bad  faith,  under  the  same  circumstances  and 
in  the  same  cases,  in  which  a  sale  would  be  set  aside  in 
a  foreclosure  by  an  equitable  action.'  Any  person,  whose 
interests  are  injuriously  affected  by  the  sale,  may  apply  to 
have  it  set  aside  ;  but  on  such  an  application,  a  bona  fide  pur- 
chaser will  be  protected.*  To  entitle  a  person  to  protection 
by  the  court  as  a  bona  fide  purchaser,  it  must  be  made 
clearly  to  appear  that  the  purchase  was  made  in  good  faith, 
and  that  the  consideration  was  paid,  before  notice  of  defects 
in  the  title,  or  of  irregularities  in  the  sale,  was  received.* 

On  an  application  to  have  a  sale  set  aside  as  illegal  and 
fraudulent,  the  purchaser  at  the  sale,  as  well  as  all  persons 
claiming  rights  under  him,  must  be  made  parties  to  the  pro- 
ceeding.* And  where  a  sale  is  set  aside  on  such  application, 
it  will  have  the  effect  of  re-instating  and  preserving  unim- 
paired, the  Hen  of  the  mortgage.^  In  such  a  case,  the 
purchaser  will  stand  as  the  assignee  of  the  mortgagee,  and 
will  be  vested  with  all  of  his  rights.* 

§  8oo.  Grounds  for  setting  sale  aside. — Mere  inade- 
quacy of  price  is  not  of  itself  a  ground  for  setting  aside  a 
sale,  made  pursuant  to  a  power  contained  in  a  mortgage,' 


>  Warner  v.   Blakeman,    4  Abb.  »  Grover    v.   Hale,    107    111.    638 

App.  Dec.  (N.  Y.)  530  (1863) ;  s.  c.  (1883) ;   Redden  v.  Miller,  95  111.  336 

4  Keyes  (K  Y.)  487,  aff'g  36  Barb.  (1880);  Brown  v.  Welch,  18  111.  343 

(N.  Y.)  501  ;    Cameron  v.  Irwin,  5  (1857) ;  s.  c.  68  Am.  Dec.  519. 

Hill  (N.  Y.)  372  (1843).  *  See  Candee  v.  Burke,  1  Huu  (N. 

2  Warner  v.    Blakeman,   4    Abb.  Y.)   546  (1874) ;   s.  c.  4  T.  &  C.  (N. 
App.  Dec.  (N.  Y.)  530  (1863) ;  s.  c.  Y.)  143. 

4  Keyes  (N.  Y.)  487.  ''  Stackpole  v.  Robbins,  47  Barb. 

3  Soule  V.  Ludlow,  3  Hun  (N.  Y.)  (N.   Y.)  212  (1868) ;    Lash  v.   Mc- 
503  (1875);  s.  c.  6  T.  &  C.  (X.  Y.)  Cormick,  17  Minn.  407  (1871). 

24;  Hubbell  v.  Sibley,  5  Lans.  (K  "Jackson  v.   Bowen,  7  Cow.  (N. 

Y.)  51  (1871);  Clevinger  v.  Ross,  109  Y.)  13  (1827) ;  Vroom  v.  Dilmas,  4 

111.  349  (1884).     See  anU  chap.  xvi.  Paige  Ch.  (N.  Y.)  526  (1834). 

■•Warner  v.  Blakeman,   36  Barb.  »  See  an«e  §  539;  also  Laclede  Bank 

(N.  Y.)  501   (1862),   aff'g  4  Keyes  v.  Keeler,  109  111.  385  (1884);  Clea- 

(N.  Y.)  487.  ver  v.  Green,  107  111.  67  (1883). 


904  ENJonnoiTG  sale,  [§801. 

unless  the  inadequacy  is  so  gross  as  to  amount  to  evidence 
of  fraud  against  the  debtor's  rights.'  An  application  for 
setting  aside  a  sale,  made  pursuant  to  a  power,  is  always 
addressed  to  the  sound  discretion  of  the  court,  the  same  as 
an  application  to  set  aside  a  sale  made  pursuant  to  a  decree 
in  a  foreclosure  by  action ;'  and  the  application  will  be 
denied,  if  the  party  applying  has  been  guilty  of  laches.* 

It  is  no  ground  for  setting  a  sale  aside  that  the  mortgagee 
refused,  at  the  request  of  the  owner  of  the  premises,  who  had 
assumed  the  payment  of  the  mortgage,  to  sell  a  part  of  the 
tract  first,  if  such  part  did  not  correspond  to  any  prior 
known  division,  and  no  description  thereof  was  suggested  at 
the  time  by  which  a  conveyance  could  be  made.* 

§  8oi.  Enjoining  sale. — Where  it  is  inequitable  that  the 
mortgagee  should  sell  the  property  under  the  power  of  sale 
contained  in  the  mortgage,  an  injunction  restraining  such 
sale  will  be  granted  on  the  application  of  the  mortgagor,'  or 
of  any  other  person  interested  in  preventing  the  sale. 

Thus,  if  the  mortgagee  claims  a  larger  amount  in  his 
notice  than  is  actually  due,,*  and  the  party  applying  for  the 
injunction  offers  to  pay  the  amount  really  due,^  or  if 
the  mortgage  is   usurious,"  or   if   the  amount  due  can   be 


1  Magnusson  v.  Williams,  111  111.  «  Cole  v.  Savage,   Clarke  Cli.  (N. 

450(1886).  Y.)  483  (1841).     Thus,   where  less 

^  See  ante  %  529.  than  the  face  of  the  mortgage  was 

»  Depew  V.  Depew,  46  How.  (N.  advanced  when  it  was  given,  and 

T.)  Pr.  441  (1874).  the  mortgagee  advertised  under  the 

*  Ellsworth  V.  Lockwood,  9  Hun  power,  claiming  the  whole  face  of 

(N.  Y.)  547  (1877).     It  was  held  in  the  mortgage  as  being  due,  it  was 

New    York,    prior   to   the    revised  held,  that  the  mortgagor's  grantee 

statutes,  that  the  omission  to  record  might  maintain  a  bill  in  equity  to 

a  power  of  sale  before  a  conveyance  restrain  the  sale  and  to  ascertain  the 

did  not  vitiate  the  sale.     Jackson  v.  amount  actually  due.     Cole  v.  Sav- 

Colden,  4  Cow.  (N.  Y.)  266  (1825);  age,  Clarke  Ch.  (N.  Y.)  482(1841). 

Wilson  V.  Troup,  2  Cow.  (N.  Y.)  195  i  Vechte  v.  Brownell,  8  Paige  Ch. 

(1823) ;  s.  c.  14  Am.  Dec.  458.  (N.  Y.)  212  (1840). 

»  Where    there   is    a    defence    to  s  Hyland  v.  Staiford,  10  Barb.  (N. 

the  mortgage,   the  mortgagor  may  Y.)    558    (1850) ;    Cole    v.    Savage, 

protect  himself  either  by  commenc-  Clarke  Ch.  (N.  Y.)  482  (1841)  ;  Bur- 

ing  an  action  to  restrain  the  sale,  or  net  v.  Denniston,  5  Johns.  Ch.  (N. 

by  attending  the  sale    and  giving  y.)  35,  41  (1821). 
notice  of  the  facts. 


§  802.]  ENJOXNIN-G    SALE DA^IAGES   FOR.  905 

determined  only  by  a  Judicial  finding,  an  injunction  restrain- 
ing the  sale  may  be  properly  granted.* 

Where  the  mortgage  is  valid  and  due,  and  the  mortgpgee 
is  conducting  the  foreclosure  according  to  statute,  the  sale 
will  not  be  enjoined.'  The  mortgagee  is  entitled  to  fore- 
close at  any  time  after  default,  and  the  simple  fact  that 
the  time  selected  for  the  sale  is  at  a  season  of  the  year 
when  property  will  not  sell  to  the  best  advantage,  or  when 
the  sale  is  inconvenient  to  subsequent  incumbrancers,  is  not 
a  ground  for  interfering  with  the  sale.* 

Neither  will  the  sale  be  delayed  to  enable  several  owners 
of  the  equity  of  redemption,  or  junior  incumbrancers,  to 
settle  among  themselves  the  proportion  which  each  is  to  pay 
towards  the  discharge  of  the  mortgage,  unless,  perhaps, 
a  sufificient  sum  is  paid  into  court  to  secure  the  mortgagee 
from  loss  ;  in  which  case,  it  seems  that  a  reasonable  time  will 
be  allowed.*  Where  the  amount  due  on  a  mortgage  has  been 
judicially  determined,  an  injunction  to  stay  the  sale  will  not 
be  granted  to  enable  an  appeal  to  be  taken,  if  the  rights  of 
the  parties  can  be  otherwise  fully  protected." 

§  802.  Damages  for  wrongful  injunction. — Where  a 
mortgagee  has  been  wrongfully  enjoined  from  proceeding  to 
.sell  the  mortgaged  premises,  and  is  entitled  to  damages  in 
consequence,  such  damages  will  consist  of  his  necessary 
counsel  fees  for  services  rendered  in  dissolving  the  mort- 
gagor's injunction,  and  also  on  the  reference/  besides  the 
expenses  incurred,^  and  his  taxable  costs." 


'  Gooch  V.  Vaughan,  92  N.  C.  610  '  Outtrin  v.  Graves,  1  Barb.   Ch. 

(1885)  ;  Purnell  v.  Vaughan,  77  K  (N.  Y.)  49  (1845). 

C.  268  (1871) ;   Capehart  v.  Biggs,  «  Lee  v.  Homer,  37  Hun  (N.  T.) 

77  N.  C.    261  (1877);  Kornegay  v.  634  (1885).     See  Rose  v.  Post,    56 

Spicer,  76  N.  C.  95  (1877).  N.    Y.     603    (1874) ;    Disbrow    v. 

5  Jones  V.  Matthie,    11    Jur.  504  Gracia,  52  N.  Y.  654  (1873) ;  Hovey 

(1848) ;  Wbitworth  V.  Rhodes,  20  L.  v.  Rubber  Tip  Pencil   Co.,    50  N. 

J.  N.  S.  (Ch.)  105  (1850).  Y.  335  (1872) ;  Andrews  v.  Glenville 

3  Bedell   v.    McClellan,  11    How.  Woolen  Co.,  50  K  Y.  282  (1872); 

(N.  Y.)  Pr.  172  (1855).  Aldrich  v.   Reynolds,   1  Barb.  Ch. 

*  Brinkerhoff  v.  Lansing,  4  Johns.  (N.  Y.)  613  (1846) ;  Edwards  v.  Bo- 

Ch.    (N.    Y.  )  65  (1819);    s.   c.  8  dine,  11  Paige  Ch.  (N.  Y.)  223  (1844). 

Am.  Dec.  538  ■■  Lawton  v.  Green,  64  N.  Y.  32G, 


906  PREMISES   m   ANOTHER    STATE.    [§§  803-804. 

§  803.  Lands  situated  in  another  state. — The  statutes 
of  New  York,  regulating  the  foreclosure  of  mortgages  by- 
advertisement,  do  not  apply  to  mortgages  on  real  estate 
situated  out  of  the  state ;'  consequently,  the  courts  of  New 
York  have  no  authority  to  enjoin  a  mortgagee  of  lands 
which  are  in  another  state,  from  selling  such  lands  at 
public  sale  within  the  state,  according  to  the  terms  of 
the  mortgage  security,  upon  the  mere  allegation  that  such 
power  is  void,  particularly  where  no  contrary  statute  of 
the  state  or  territory  where  the  lands  are  situated  is  alleged, 
and  the  invalidity  of  the  power  is  not  made  apparent.' 

Thus,  where  a  mortgage,  executed  by  a  mining  corpora- 
tion upon  lands  in  Colorado,  authorized  a  sale,  after  a  certain 
specified  notice,  in  the  city  of  New  York,  the  court  held,  in 
an  action  to  restrain  a  sale  thus  authorized,  that,  in  the 
absence  of  any  statutory  regulation,  the  parties  had  the 
power  to  agree  upon  the  manner  of  sale  ;  that  the  statute  of 
New  York,  in  reference  to  the  sale  of  mortgaged  premises, 
had  reference  only  to  real  estate  in  that  state ;  and  that 
there  was  no  ground  for  equitable  relief,  as  there  was  no 
proof  that  the  sale,  as  provided  for  in  the  mortgage,  was 
in  conflict  with  the  laws  of  Colorado.* 

§  804.    Sale  under  loan  commissioners*  mortgage. — 

As  the  power  of  loan  officers  to  foreclose  a  loan  commis- 
sioners' mortgage  is  purely  statutory,  they  must  pursue  the 
directions  of  the  statute  strictly  in  foreclosing  such  mort- 
gage. If,  therefore,  the  advertisement  of  sale  is  defective 
in  describing  the  quantity  and  the  situation  of  the  premises, 
the  sale  will  be  irregular  and  void,  and  the  purchaser 
under  such  sale  will  be  decreed  to  surrender  his  title  to  the 
owner    of    the    equity    of    redemption;*     because,   where 


831  (1876) ;  Aldrich  v.  Reynolds,  1  Edwards  v.  Bodine,  11  Paige  Ch. 

Barb.  Ch.  (N.  Y.)  613  (1846).  (N.  Y.)  223  (1844). 

«  Aldrich  v.   Reynolds,   1    Barb.  >  Elliott  v.  Wood,4.5N.Y.  71  (1871). 

Ch.  (N.  Y.)  613  (1846).     See  Rose  v.  «  Central    Gold    Mining    Co.    v. 

Post,  56  N.  Y.  603  (1874) ;  Hovey  v.  Piatt,  3  Daly  (N.  Y.)  263  (1870). 

Rubber  Tip  Pencil  Co.,  50  N.  Y.  »  Carpenter  v.   Blackhawk   Gold 

335  (1872);    Andrews  v.   Glenville  Mining  Co.,  65  N.  Y.  43  (1875). 

Woolen  Co.,  50  N.  Y.  282  (1872) ;  *  Sherwood  v.  Reade,  7  Hill  (N. 


§  804.] 


LOAN    COMMISSIONERS     FOEECLOSURE. 


9or 


premises  are  to  be  taken  under  statutory  authority,  in 
derogation  of  the  common  law,  every  requisite  of  the 
statute  having  the  semblance  of  a  benefit  to  the  owner, 
must  be  strictly  complied  with.*  And  every  requirement  of 
the  statute,  affecting  the  substantial  rights  of  a  party,  must 
be  complied  with  in  order  to  divest  the  title  to  the  property 
and  to  transfer  it  from  one  party  to  another  under  the 
statutory  authority.* 

It  is  a  well  settled  rule  that  where  particular  forms  of 
procedure  are  required  for  the  execution  of  a  power, 
however  immaterial  they  may  appear  in  themselves,  they 
are  considered  as  conditions,  the  observance  of  which,  is 
indispensable.*  But  the  validity  of  a  sale  to  a  bona  fide 
purchaser  will  not  be  affected  by  the  neglect  of  the  commis- 
sioners to  enter  in  their  minute  book  the  order  for  and  a 
copy  of  the  notice  of  sale,  and  a  statement  of  the  places 
where,  and  the  persons  by  whom,  advertisements  were 
posted.* 


Y.)  431  (1844) ;  Sherman  v.  Dodge, 
6  Johns.  Ch.  (K  Y.)  107  (1822); 
Denning  v.  Smith,  3  Johns.  Ch.  (N. 
Y.)  332  (1818) ;  Rogers  v.  Murray,  3 
Paige  Ch.  (N.  Y.)  390  (1832).  See 
"Washington  Cemetery  v.  Prospect 
Park  «&  C.  I.  R.  Co.,  68  N.  Y.  591 
(1877) ;  Rathbun  v.  Acker,  18  Barb. 
(N.  Y.)  393  (1854);  Doughty  v.  Hope, 
S  Den.  (N.  Y.)  249  (1847);  Gilbert  v. 
Columbia  Turnpike  Co.,  3  Johns. 
Cas.  (N.  Y.)  107  (1802). 

'  Denning  v.  Smith,  3  Johns.  Ch. 
(N.  Y.)  333  (1818).  See  Powell  v. 
Tuttle,  3  N.  Y.  396,  402  (1850); 
Corwin  v.  Merritt,  3  Barb.  (N.  Y.) 
841  (1848) ;  Jackson  v.  Shepard,  7 
Cow.  (N.  Y.)  88  (1827) ;  s.  c.  17  Am. 
Dec.  502 ;  Sherwood  v,  Reade,  7 
Hill  (N.  Y.)  431,  434  (1844) ;  Sharp 
V.  Johnson,  4  Hill  (N.  Y.)  92,  99 
(1843);  B.  C.  40  Am.  Dec.  259; 
Sharp  V.  Speir,  4  Hill  (N.  Y.) 
76  (1843);  Atkins  v.  Kinnan,  20 
Wend.  (N.  Y.)  241  (1838) ;  s.  c.  33 


Am.  Dec.  534 ;  Jackson  v.  Esty,  7 
Wend.  (N.  Y.)  148  (1831);  Hubley 
V.  Keyser,  2  Pen.  &  W.  (Pa.)  501 
(1831) ;  Williams  v.  Peyton,  17  U. 
S.  (4  Wheat.)  77  (1819) ;  bk.  4  L. 
ed.  518. 

»  Hill  V.  Draper,  10  Barb.  (N.  Y.) 
460  (1851);  Denning  v.  Smith,  3 
Johns.  Ch.  (N.  Y.)  382  (1818); 
Stead  V.  Course,  8  U.  S.  (4  Cr.)  403 
(1808) ;  bk.  2  L.  ed.  660. 

•  Denning  v.  Smith,  3  Johns.  Ch. 
(N.  Y.)  332  (1818).  See  Nixon  v. 
Hyserott,  5  Johns.  (N.  Y.)  58  (1809); 
Wyman  v.  Campbell,  6  Port.  (Ala.) 
219  (1838);  s.  c.  31  Am.  Dec. 
677  692;  Hunt  v.  Chamberlin,  8 
N.  J.  L.  (3  Halst.)  336  (1826); 
Combe  v.  Brazier,  2  Desaus.  (S.  C.) 
Eq.  431  (1806). 

*  White  V.  Lester,  1  Keyes  (N.  Y.) 
316  (1804).  See  Puwcirv.  Tuttle, 
3  N.  Y,  396  (1850). 


908  NOTICE  OF  commissioners'  sale.  [§§  805-806. 

§  805.   Notice  of  sale  by  loan  commissioners— Contents. 

— Pursuant  to  the  statute  regulating  sales  under  mortgages 
executed  to  loan  commissioners,*  the  notice  or  advertisement 
of  sale  is  required  to  contain  a  sufficient  statement  to  indicate 
who  executed  the  mortgage  and  to  whom  it  was  given.' 

Hence,  a  notice  of  sale,  upon  default  of  payment,  which 
does  not  name  any  of  the  mortgagors,  and  wherein  the 
mortgage  is  stated  to  have  been  given  to  the  "  Commissioners 
of  the  United  States  Deposit  Fund,"  it  having  been  exe- 
cuted in  fact,  to  the  "Commissioners  for  loaning  certain 
moneys  of  the  United  States,"  that  being  the  designation 
of  the  officers  named  by  the  statute,  will  be  insufficient,  and 
a  sale  thereunder  will  be  invalid.*  Likewise,  the  omission 
from  the  notice  of  the  number  of  the  lot  or  of  the  name  of 
the  mortgagor  will  be  fatal.* 

§  806.    Publishing  notice  of  loan  commissioners'  sale. 

— In  New  York  it  will  be  sufficient  if  the  notice  of  sale  is  pub- 
lished for  six  successive  weeks,  although  the  first  publication 
may  be  less  than  forty-two  days  prior  to  the  sale.*  Yet  it  has 
been  said  that  where  the  statute  requires  the  notice  to  be 
published  "  for,"  that  is,  "  during  "  sixty  days,  one  insertion 
made  sixty  days  before  the  sale  will  not  satisfy  the 
language  of  the  statute.* 

Where  a  county  has  been  divided,  and  lands  mortgaged  to 
the  loaning  officers  of  the  original  county,  fall  within  the 
new  county,  such  loaning  officers,  upon  a  foreclosure  and  sale 
of  the  mortgaged  premises,  are  bound  to  publish  a  copy 
of  their  advertisement  of  the  sale  in  a  newspaper  in  the 
new  county.* 


'  N.  Y.  Laws  of  1837,  chap.  150,  *  Denning  v.  Smith,  3  Johns.  Ch. 

§§  30,  31.  (N.  Y.)  332  (1818).     See  Jackson  v. 

«  Thompson  v.  Commissioners.  79  Harris,  3  Cow.  (N.  Y.)  249  (1824); 

N.  Y.  54  (1879);  s.  c.  31  Alb.  L.  J.  15.  King  v.  Stow,  6  Johns.  Ch.  (N..  Y.) 

'Thompson     v.    Commissioners,  323(1832). 

79    N.    Y.    54    (1879);     s.    c.    21  *  Wood  v.  Terry,  4  Lans.  (N.  Y.) 

Alb.  L.  J.  15  (1879).      But  a  gen-  80  (1871). 

cral  description  of  the  land  in  the  *  Denning    v.     Smith,    3    Johns, 

notice  was  sufficient  under  the  stat-  Ch.  (N.  Y.)  332  (1818). 

ute  of  1808.     Jackson  v.  Harris,  3  '  People  v.    Supervisors  of  Dela- 

Cow.  (N.  Y.)  241  (1824).  ware  County,  5  Cow.  (N.  Y.)  436 


§§  807-808.]      LOAN    COilMISSlOJ^ERs'    SALE.  D09 

§  807.  Posting  notice  of  loan  commissioners*  sale — 
Terms. — The  notice  of  such  sale  should  be  posted  in  three 
public  places  for  the  same  length  of  time  that  it  is 
advertised  in  a  newspaper  of  the  county.  It  has  been 
held  that  posting  the  notice  in  unfrequented  places,  or  on 
the  inside  of  the  court  house  door,  will  render  the  sale 
invalid.' 

The  commissioners  have  no  right  to  sell  the  premises 
on  credit,  or  to  prescribe  any  terms  of  sale  except  such  as 
are  authorized  by  the  statute  ;  consequently,  they  can  not 
make  it  one  of  the  terms  of  the  sale  that  the  purchaser  shall 
pay  down  only  a  part  instead  of  the  whole  of  the  purchase 
price,  and  that  in  default  of  the  payment  of  the  balance 
there  shall  be  a  resale.' 

If  the  mortgagor  purchases  the  premises  and  gives  a  new 
mortgage,  it  will  be  a  purchase  money  mortgage.  On  a 
subsequent  default  and  foreclosure,  the  commissioners  will 
hold  as  against  a  party  who  has  acquired  title  under  a  judg- 
ment docketed  prior  to  the  new  mortgage.* 

§  808.  Validity  of  loan  commissioners'  sale. — A  sale  of 
mortgaged  lands  made  by  only  one  of  the  commissioners,  will 
be  void  ;*  both  commissioners  must  be  present  at,  and  take 
part  in,  the  sale;  the  execution  of  the  deed  by  both  com- 
missioners will  not  aid  such  a  sale.  Neither  can  one 
commissioner  give  a  valid  notice  of  the  sale.'  But  when 
both  commissioners  are  present  and  unite  in  making  a  sale, 
the  fact  that  the  entry  in  their  minute  book,  purporting  to  be 
the  entry  of  both,  was  made  and  signed  by  only  one,  will 


(1826) ;  Rogers  v.  Murray,  8  Paige  (N.   Y.)    832    (1818) ;    followed  in 

Ch  (N.  Y.)  390  (1832).  Powell  v.  Tutlle,  3  N.  Y.  404  (18.j0). 

'  Denning  v.  Smith,  3  Johns.  Ch.  Sales  by  one  commissioner,  prior  to 

(N.  Y.)  332  (1818).     See  also  King  1867,  were  contirmcd  by  cliap.  704, 

V.  Stow,  6  Johns.  Ch.  (N.  Y.)  323  Laws  of  1807. 

(1822).  *  Olmsted  v.  Elder,   5  N.  Y.    144 

«  Sherwood  v.  Reade,  7  Hill  (N.  (1851)  ;  Powell  v.   Tuttle,   8  N.  Y. 

Y.)  431  (1844).  396  (1850) ;  New  York  Life  Ins.  & 

*  Commi-ssioners  V.  Chase,  6  Barb.  T.  Co.  v.  Staats,  21  Barb.  (N.  Y.) 
(N.  Y.)  37  (1849).  570(1851). 

*  Denning  v.  Smith,  3  Johns.  Ch. 


910  LOAN  commissioners'  sale.    [§§  809-810. 

not  be  a  fatal  irregularity.'  The  statute  as  to  the  entry  of 
proceedings  in  the  mortgage  book,  is  directory  only.' 

A  court  of  equity  can  not  set  aside  a  public  sale  made  by 
an  officer  who  is  not  acting  under  its  direction  because  of 
the  inadequacy  of  the  sum  paid  by  the  purchaser,  however 
gross  it  may  be.* 

§  809.  Purchaser  presumed  to  know  authority  of  loan 
commissioners. — The  purchaser  at  a  loan  commissioners' 
sale  is  presumed  to  know  the  authority  of  such  officers, 
their  authority  being  a  matter  of  law  and  of  public  record  ;* 
if  he  purchases  at  a  sale,  in  which  the  special  authority  con- 
ferred by  statute  is  not  pursued,  he  will  purchase  at  his 
peril.*  This  rule  is  founded  on  the  well  known  principle, 
that  if  the  agency  is  known  and  limited,  it  is  the  duty  of 
every  party  who  deals  with  the  agent  to  inquire  into  the 
nature  and  extent  of  the  authority  conferred  by  the  principal, 
and  to  deal  with  the  agent  accordingly.* 

Where  a  sale  by  loan  commissioners  is  illegal  and  void, 
the  mortgagor  may  bring  an  action  against  the  purchaser  for 
redemption,  and  for  the  value  of  the  rents  and  profits  of  the 
premises.  In  such  a  case,  an  omission  to  make  a  tender  will 
not  be  fatal  to  the  action,  but  at  most  will  only  affect  the 
question  of  costs.' 

§  810.  Conduct  of  sale — Deed  of  loan  commissioners. 
— The  conduct  of  the  sale,  and  the  method  of  conveyancing  by 
loan  commissioners  in  New  York,  are  defined  in  the  case  of 


'  White  V.  Lester,  1  Keyes(N.Y.)  (1818);    Delafield   v.    Illinois,    26 

816(1864).  Wend.  (N.  Y.)  222  (1841). 

»  Wood  V.  Terry,  4  Lans.  (N.  T.)         •  See  Snow  v.  Perry,  26  Mass.  (9 

80(1871).  Pick.)  542  (1830);  Niles  v.    Rans- 

3  March  V.  Ludlum,  8  Sandf .  Ch.  ford,   1   Mich.    341  (1849);    s.   c. 

(N.  Y.)  35  (1845).  51  Am.  Dec.  97  ;  State  v.  Bank  of 

*  Dart   V.    Hercules,  57  HI,   449  Missouri,  45  Mo.  588  (1870) ;  Towle 

(1870).-     See  Denning  v.  Smith,  3  v.  Leavitt,  23  N.  H.  360  (1851) ;  s. 

Johns.  Ch.  (N.  Y.)  332  (1818) ;  Mar-  c.  55  Am.  Dec.  195,  201  ;  Hatch  v. 

shall   County   v.   Cook,  38  111.   44  Taylor,  10  N.  H.  547  (1840) ;  Schim- 

(1865).  melpennich  v.  Bayard,  26  U.  S.  (1 

"  Sherman   v.   Dodge,    6   Johns.  Pet.)  264,  290  (1828) ;  bk.  7  L.  ed. 

Ch.  (N.  Y.)  107  (1822) ;  Denning  v.  138. 
Smith,   3  Johns.   Ch.  (N.  Y.)  333         ">  Thompson  v.  Commissioners,  79 


§811.]        EFFECT    OF   STATUTORY   FOEECLOSUEE.  911 

York  V.  Allen.'  Loan  commissioners  have  no  right  to  enter 
into  possession  of  the  premises,  until  after  a  failure  to  obtain 
a  bid  for  the  amount  due  on  the  mortgage,  or  the  refusal 
of  the  purchaser  to  pay  the  amount  of  such  bid. 

Prior  to  the  revised  statutes,  a  deed  from  loan  officers,  in 
pursuance  of  a  sale  under  a  loan  commissioners'  mortgage, 
was  conclusive  on  showing  a  default  in  payment  by  the 
mortgagor,  although  the  mortgaged  premises  might  never 
have  been  duly, advertised  for  sale;  but  since  the  adoption 
of  the  revised  statutes,  it  seems  that  the  purchaser  is  bound 
to  show  the  regularity  of  the  sale.'  The  requirement  of 
two  witnesses  to  a  deed  is  only  directory.* 

§  Si  I.  Effect  of  sale  by  advertisement. — The  Code* 
provides,  that  "  a  sale,  made  and  conducted  as  prescribed  by 
the  statute,  to  a  purchaser  in  good  faith,  is  equivalent  to  a 
sale,  pursuant  to  judgment  in  an  action  to  foreclose  the 
mortgage,  so  far  only  as  to  be  an  entire  bar  of  all  claim  or 
equity  of  redemption,  upon,  or  with  respect  to,  the  property 
sold,  of  each  of  the  following  persons:  (i)  the  mortgagor, 
his  heir,  devisee,  executor  or  administrator;  (2)  each  person, 
claiming  under  any  of  them,  by  virtue  of  a  title  or  of  a  hen 
by  judgment  or  decree,  subsequent  to  the  mortgage,  upon 
whom  the  notice  of  sale  was  served,  as  prescribed  by  the 
statute  ;*  (3)  each  person  so  claiming,  whose  assignment, 
mortgage,  or  other  conveyance  was  not  duly  recorded  in  the 


N.  Y.  54  (1879),  reversing  16  Hun  house,  51  N.  Y.  503  (1873).     In  an 

(N.  Y.)  86 ;  B.  c.  21  Alb.  L.  J.  15.  early  case,  it  appeared  that  a  party, 

'  80  N.  Y.  104  (1864).  having  a  judgment  subsequent  to  a 

•Brown  v.  Wilbur,  8  "Wend.  (N.  mortgage,  sold  the  premises  \inder 

T.)  657  (1832).     See  Rogers  v.  Mur-  it,  and  acquired  a  right  to  a  deed 

ray,  3  Paige  Ch.  (N.  Y.)  390  (1832).  prior  to  the  sale  under  the  mortgage, 

'  Commissioners  v.  Chase,  6  Barb.  though  he  did  not  receive  his  deed 

(N.  Y.)  37  (1849).  until  after  the  sale  ;  it  was  held  that 

*  N.  Y.  Code  Civ.  Proc.  §  2395.  the  deed  took  effect  from  the  time 

•  A  judgment  which  is  docketed  when  it  might  have  been  demanded, 
after  the  first  publication  of  the  and  that  the  judgment  creditor's  title 
notice,  and  before  the  sale,  will  not  was  cut  off  by  the  statutory  fore- 
be  barred  by  the  foreclosure,  if  the  closure.  Klock  v.  Cronkhite,  1  HiU 
creditor  is  not  served  with  the  notice,  (N.  Y.)  107  (1841),  and  see  Post  v. 
and  the  holder  thereof  may  redeem  Arnot,  2  Den.  (N.  Y.)  344  (1845). 
from  the  mortgage.    Groff  v.  More- 


913  EFFECT    OF    STATUTORY    FOKECLOSUllE.         [§812. 

proper  book  for  recording  the  same  in  the  county,  or  whose 
judgment  or  decree  was  not  duly  docketed  in  tht  county 
clerk's  office,  at  the  time  of  the  first  pubHcation  of  the 
notice  of  sale;  and  the  executor,  administrator,  or  assignee 
of  such  a  person  ;  (4)  every  other  person,  claiming  under  a 
statutory  lien  or  incumbrance,  created  subsequent  to  the 
mortgage,  attaching  to  the  title  or  interest  of  any  person, 
designated  in  either  of  tUe  foregoing  subdivisions  ;  (5)  the 
wife  or  widow  of  the  mortgagor,  or  of  a  subsequent  grantee, 
upon  whom  notice  of  the  sale  was  served  as  prescribed  by 
statute,  where  the  lien  of  the  mortgage  was  superior  to  her 
contingent  or  vested  right  of  dower,  or  her  estate  in  dower.'" 

§  812.  Sale  firm  and  binding  on  all  parties. — The  title 
of  a  purchaser  in  good  faith  at  such  a  sale,  is  the  same  as 
the  title  acquired  by  a  purchaser  at  a  sale  made  under  a 
decree  of  foreclosure  in  an  equitable  action."  Where  such 
a  sale  is  made  strictly  as  prescribed  by  statute,  all  questions 
which  would  have  been  determinable  in  an  equitable  action 
to  foreclose  a  mortgage,  will  be  settled  by  such  sale.' 

As  the  statute  has  no  saving  clause  for  such  persons  as  may 
be  under  a  disability  at  the  time,  it  is  believed  that  the  courts 
can  make  no  exceptions  in  their  favor  on  the  ground  of 
any  inherent  equity  applicable  to  the  case.  Thus,  infants 
not  being  excepted  from  the  operation  of  the  statute,  the 
courts  can  make  no  exception  in  their  favor,  and  their  equity 
of  redemption  will  be  effectually  and  absolutely  barred  by  a 
regular  sale  under  the  power.* 


•  N.  Y.   Code  Civ.  Proc.  §  2395.  Ch.  (N.  Y.)  45,  50  (1823) ;  s.  c.  11 

Foreclosure  by  advertisement  under  Am.  Dec.  389 ;  Slee  v.  Manhattan 

a  power  of  sale  contained  in  a  pur-  Ins.  Co.,  1  Paige  Cli.  (N.  Y.)  48,  69 

chase  money  mortgage,  not  executed  (1828) ;  Otis  v.  McMillan,  70  Ala.  46 

by  the  mortgagor's  wife,  will  bar  her  (1881). 

right  of  dower.     Brackett  v.  Baum,  *  Warner  v.  Blakeman,  30  Barb. 

50  N.  Y.  8  (1872).     Compart  N.  Y.  (N.  Y.)  501   (1862);    aflf'd    4  Keycs 

Code  Civ.  Proc.  §§  2388,  2395.  (N.  Y.)   487  ;   s.   c.    4   Abb.    App. 

»  N.  Y.  Code  Civ.  Proc.  §  2395.  Dec.  530. 

See  Decker  v.  Boice,  19  Huu  (N.  Y.)  *  Demarest  v.  "Wynkoop,  3  Johns. 

153(1879) ;  aff'd  83  K  Y.  215  ;  Jack-  Ch.  (N.  Y.)  129,  143  (1817) ;  a.  c.  8 

son  V.  Henry,  10  Johns.  (N.  Y.)  185  Am.  Dec.  407,  473. 
(Ibl3) ;  DoolitUe  v.  Lewis,  7  Johns. 


§  813.]      EFFECT    OF    SALE    ON    OSnTTED    PAETIES.  913 

The  theory  of  the  statute  is  that  all  foreclosures  should 
be  final,  where  they  are  free  from  fraud  and  gross  irregularity.' 
But  the  requirements  of  the  statute  must  be  strictly  com- 
plied with,  in  order  to  cut  off  the  rights  of  the  mortgagor 
and  of  subsequent  grantees  or  incumbrancers ;  the  object 
of  the  statute  being  to  relieve  interested  parties  from  the 
expenses  of  an  action,  and  to  enable  persons,  not  learned  in 
the  law,  to  conduct  foreclosure  proceedings,  it  follows  that  the 
construction  placed  upon  the  statute  should  be  liberal  and 
not  technical.' 

§  813.  Effect  of  sale  on  omitted  parties— Rights  of 
tenants. — The  claim  of  a  party  who  was  not  duly  served 
with  notice  in  the  proceedings,  will  not  be  barred,  even 
though  he  had  actual  knowledge  of  the  sale.  Where,  how- 
ever, the  value  of  the  mortgaged  premises  is  less  than  the 
amount  of  the  mortgage  debt,  with  the  other  liens  prior 
to  the  lien  which  was  not  barred,  such  lien  will  be  of  no 
value,  and  a  purchaser  in  good  faith  may  maintain  an  action 
to  enjoin  the  lienor  from  enforcing  his  claim.' 

The  rights  of  a  tenant  holding  under  the  mortgagor, 
where  the  demise  was  made  subsequent  to  the  mortgage,  will 
be  extinguished  by  the  sale  ;*  and  the  mortgagee,  on  acquir- 
ing possession  of  the  premises,  will  be  entitled  to  the  crops 
sown  by  the  lessee  and  growing  on  the  land  at  the  time  of 
the  sale.*     The  same  rule  is  true  as  to  fixtures.* 


•  Wilson  V.  Troup,  2  Cow.  (N.Y.)  5  Lans.  (N.  Y.)  51  (1871) ;  Vroomv. 
195  (1823) ;  s.  c.  14  Am.  Dec.  4.58  ;  Ditmas,  4  Paige  Ch.  (N.  Y.)  526 
Jackson  v.  Henry,  10  Johns.  (N.Y.)  (1834). 

195  (1813);    Doolittle  v.    Lewis,   7  «  Root  v.  Wheeler,  12  Abb.(N.Y.) 

Johns.  Ch.  (N.  Y.)  50  (1823) ;  s.  c.  Pr.  294  (1861). 

11  Am.  Dec.  389  ;  Vroom  v.  Ditmas,  *  Simers  v.  Saltus,  3  Den.  (N.  Y.) 

4  Paige  Ch.  (N.  Y.)  531  (1834) ;  Slee  214  (1846). 

V.  Manhattan  Ins.  Co.,  1  Paige  Ch.  *  Gillett  v.  Balcora,  6  Barb.  (N.Y.) 

(N.  Y.)  70  (1828).     The  validity  of  a  370  (1849) ;  Aldrich  v.  Reynolds,  1 

foreclosure  by  advertisement  cannot  Barb.  Ch.  (N.  Y.)  613  (1846) ;  Shep- 

be  passed  upon  in  an  action  to  which  hard  v.  Philbrick,  2  Den.   (N.  Y.) 

the  purchaser  is  not  a  party.     Can-  176  (1846) ;  Lane  v.  King,  8  Wend. 

dee  V.   Burke,  1  Hun  (N.  Y.)  546  (N.  Y.)  584  (1832).     See  Gardner  v. 

(1874) ;   8.  c.  4  T.  &  C.  (N.  Y.)  143.  Finley,  19  Barb.  (N.  Y.)  317  (1855). 

*  Jackson  v.    Henry,    10    Johns.  See  ante  §  157. 

(N.Y.)  195  (1813);  HubbeU  v.  Sibley,  «  See  ante  §§  426-428,  584r-587. 

(58) 


914  puechaser's  TITLE.  [§§814-815. 

§  814.  Purchaser's  title— What  passes  by  sale.— The 
effect  of  every  statutory  foreclosure  is  to  transfer  to  the 
purchaser  the  rights  of  the  mortgagee  and  of  the  mort- 
gagor.' The  regularity  of  the  sale,  however,  constitutes  the 
very  foundation  of  the  purchaser's  title;  if  it  is  irregular, 
he  will  acquire  no  rights  by  his  purchase.'  If  there  are 
judgments  subsequent  to  the  mortgage,  which  continue  a 
lien  on  the  premises  at  the  time  of  the  sale,  the  purchaser 
will  take  the  legal  and  equitable  interest  in  the  property  as 
against  the  mortgagor  and  all  persons  claiming  through  and 
under  him,  subject  to  the  equitable  right  of  such  lienors  to 
redeem.* 

Where  the  mortgagee  becomes  the  purchaser,  the  whole 
mortgage  debt  will  be  extinguished  ;  but,  if  a  third  person 
purchases,  the  mortgagor,  if  compelled  to  pay  the  residue  of 
the  mortgage,  will  be  entitled  to  an  assignment  thereof, 
so  as  to  re-imburse  himself  from  the  land.* 

§  815.  Defective  foreclosure. — Where  a  foreclosure  is 
regularly  conducted  in  all  respects,  except  an  omission  to 
serve  some  one  party  with  a  notice  of  the  sale,  it  will  be 
valid  as  to  all  persons  who  were  served.  The  persons  who 
were  properly  served  will  be  barred  of  their  right  of  redemp- 
tion, but  the  right  of  redemption  will  still  remain  in  the 
party  who,  being  entitled  to  notice,  was  not  served  with  it.* 

Thus,  an  omission  to  make  the  wife  of  the  mortgagor  a 
party,  she  having  joined  in  the  mortgage,  merely  leaves  her 
the  right  of  redemption,  but  it  does  not  render  the  fore- 
closure invalid  as  to  the  other  parties  properly  served.*     It 


'  Vroom  V.  Ditmas,  4  Paige  Ch.  «  Benedict  v.  Gilman,  4  Paige  Ch. 

(N.  Y.)  536  (1834).     Where  the  only  (N.  Y.)  58  (1833).    See  Robinson  v. 

deed  to  the  purchaser  produced,  was  Ryan,  25  N.  Y.  320  (1862). 

one   executed    nineteen  years  after  *  Cox  v.  Wheeler,  7  Paige  Ch.  (N. 

the  sale,   it  was  held  that  as  there  Y.)  248  (1838). 

were  no  intervening  rights,  it  might  *  Groff  v.  Morehouse,   51  N.  Y. 

be  treated  a*  good  by  relation  back,  503  (1873) ;  Wetmore  v.  Roberts.  10 

especially  in  a  court  of  equity.     De-  How.  (N.  Y.)  Pr.  51  (1853) ;  Vander- 

marestv.Wynkoop,  3Johns.  Ch.  (N.  kemp  v.  Shelton,  11  Paige  Ch.  (N. 

Y.)  129  (1817) ;  8.  c.  8  Am.  Dec.  467.  Y.)  28  (1844). 

•  See  Jackson  v.  Clark,  7  Johns.  «  Candee  v.  Burke,  1  Hun  (N.  Y.) 

(N.  Y.)  217  (1810).  546  (1874). 


§  816.]  AFFIDAVITS    OF   THE    PEOCEEDmOS.  915 

seems,  however,  that  the  purchaser  at  such  a  sale,  on 
obtaining  possession  of  the  premises,  is  entitled  to  retain  it 
until  the  amount  due  on  the  mortgage  is  paid  to  him.' 

Where  subsequent  incumbrancers  were  not  properly  cut 
off  by  the  proceedings  under  the  statute,  a  strict  foreclosure 
was  formerly  held  to  be  the  proper  remedy  to  extinguish 
such  rights.' 

If  a  statutory  foreclosure  is  set  aside  for  any  reason, 
proceedings  for  the  foreclosure  of  the  mortgage  may  be 
comrnenced  de  novo.  This  is  also  true  if  an  attempted  fore- 
closure fails  for  any  cause  whatever;  the  mortgage  does  not 
become  null  and  void  by  such  failure,  but  stands  restored 
and  as  though  no  proceedings  had  ever  been  taken  upon  it.' 

§  8i6.  Affidavits  of  the  proceedings. — The  New  York 
Code  of  Civil  Procedure*  provides,  that  "  an  affidavit  of  the 
sale,  stating  the  time  when,  and  the  place  where,  the  sale 
was  made  ;  the  sum  bid  for  each  distinct  parcel,  separately 
sold;  and  the  name  of  the  purchaser  of  each  distinct  parcel, 
may  be  made  by  the  person  who  officiated  as  auctioneer 
upon  the  sale.  An  affidavit  of  the  publication  of  the  notice 
of  the  sale,  and  of  the  notice  or  notices  of  postponement,  if 
any,  may  be  made  by  the  publisher^  or  printer  of  the  news- 
paper in  which  they  were  published,  or  by  his  foreman, 
or  principal  clerk.  An  affidavit  of  the  affixing  of  a  copy  of 
the  notice,  at  or  near  the  entrance  of  the  proper  court 
house,  may  be  made  by  the  person  who  so  affixed  it,  or  by 
any  person  who  saw  it  so  affixed,  at  least  eighty-four 
days  before  the  day  of  sale.'  An  affidavit  of  the  affixing  of 
a  copy  of  the  notice  in  the  book,  kept  by  the  county  clerk, 
may  be  made  by  the  county  clerk,  or  by  any  person  who 
saw  it  so  affixed,  at  least  eighty-four  days  before  the  day  of 


*  Brown  v.  Smith,  116  Mass.  108  may  make  the  affidavit  of  publica- 
(1874).  tion,  required  by  law  to  be  made  by 

'  Benedict   v.    GUman,    4    Paige  the  printer,  or  his  foreman,  or  prin- 

Ch.  (N.  Y.)  58,  63  (1833).  cipal    clerk.     Bunce    v.    Reed,    16 

«  Stackpole  v.  Bobbins.  48  N.  Y.  Barb.  (N.Y.)  347  (1853). 

665(1871).  ^Hornby    v,    Cramer,    12    How. 

*  K  Y.  Code  Civ.  Proc.  §  2396.  (N.  Y.)  Pr.  490  (1855). 

*  The  publisher  of  the  newspaper 


916  WHAT    AFFIDAVITS    SUFFICIENT.  L^^^'^* 

sale.  An  affidavit  of  the  service  of  a  copy  of  the  notice  upon 
the  mortgagor,  or  upon  any  other  person,  upon  whom  the 
notice  must  or  may  be  served,  may  be  made  by  the  person 
who  made  the  service.  Where  two  or  more  distinct  parcels 
are  sold  to  difTerent  purchasers,  separate  affidavits  may 
be  made  with  respect  to  each  parcel,  or  one  set  of  affidavits 
may  be  made  for  all  the  parcels.'" 

The  Code  also  provides,"  that  "  the  matters  required  io  be 
contained  in  any  or  all  of  the  affidavits  above  specified,  may 
be  contained  in  one  affidavit,  where  the  same  person  deposes 
with  respect  to  them.  A  printed  copy  of  the  notice  of 
sale  must  be  annexed  to  each  affidavit  ;  and  a  printed  copy 
of  each  notice  of  postponement  must  be  annexed  to  the 
affidavit  of  publication,  and  to  the  affidavit  of  sale.  But 
one  copy  of  the  notice  suffices  for  two  or  more  affidavits, 
where  they  all  refer  to  it,  and  are  annexed  to  each  other, 
and  filed  and  recorded  together.'" 

§  817.  Sufificiency  of  the  affidavits. — It  has  been  held, 
that  a  sale  made  under  a  foreclosure  by  advertisement,  pursu- 
ant to  the  statute,  will  bar  the  equity  of  redemption, 
although  the  usual  affidavits  may  not  be  made.*  The  earlier 
cases  held,  that  every  requirement  of  the  statute  must  be 
strictly  complied  with;  and  that  if  the  premises  are  purchased 
by  the  mortgagee,  the  foreclosure  will  not  be  complete  with- 
out the  affidavits  which  stand  in  the  place  of  the  deed.' 
But  it  is  said  in  the  case  of  Mowry  v.  Sanborn,'  that  the 


'N.  Y.   Code  Civ.  Proc.   §2396.  29    Barb.    (K    Y.)    297   (1859); 

See  Mowry  v.  Sanborn,   73  N.  Y.  Osborn  v.  Merwin,  12  Hun  (K  Y.) 

534  (1878)  ;   s.  c.  68  N.  Y.  153  ;  65  332  (1877),  revs'g  50  How.  (N.  Y.) 

3S\  Y.  581  ;    Hubbell  v.  Sibley,  50  Pr.    183  (1875).     See    K   Y.    Code 

N.  Y.    468  (1872) ;  Bryan  v.  Butts,  Civ.  Proc.  §  2400. 

27  Barb.  (N.  Y.)  503(1857) ;  Hornby  '  Bryan  v.  Butts,  27  Barb.  (N.Y.) 

V.  Cramer,  12  How.  (N.  Y.)  Pr.  490  503  (1859)  ;  Layman  v.  Whiting,  20 

(1855).  Barb.   (N.    Y.)  559  (1855) ;    Cohoes 

«  N.  Y.  Code  Civ.  Proc.  §  2397.  Co.  v.  Gross,  13  Barb.  (N.  Y.)  138 

»  Mowry  v.   Sanborn,   72  N.    Y.  (1852)  ;  Arnot  v.  McClure,  4  Den. 

534(1878).  (N.  Y.)  41  (1847). 

*  See  Mowry  v.  Sanborn.  68  K  Y.  «  72  N.  Y.    534  (1878),   revs'g  11 

153(1877);  Tuthill   v.  Tracy,  31  N.  Hun  (N.  Y)  545. 
Y.    157  (1865);   Howard  v.  Hatch, 


§818.]  CONTENTS   OF  AFFIDAVITS.  917 

Statutory  proofs  of  foreclosure  and  sale  are  to  be  liberally 
construed,  and  are  only  required  to  be  certain  to  a  common 
intent ;  and  that  if  they  are  so,  though  technically  defective, 
they  will  be  sufficient. 

If  no  affidavits  are  made,  and  a  person  other  than  the  mort- 
gagee becomes  the  purchaser,  common-law  proof  may  be 
made  of  the  publication  of  the  notice.*  Where  the  affidavits 
of  publication  and  sale  operate  as  a  conveyance,  they  can  not 
be  controverted  by  the  purchaser  and  those  claiming  under 
him  ;*  but  such  affidavits  are  not  conclusive  as  to  the  facts 
therein  stated,  when  the  premises  are  purchased  by  the 
owner  of  the  mortgage.  Where  the  terms  of  the  sale  are 
not  stated  in  the  affidavits,  oral  evidence  will  be  admissible 
to  prove  them.* 

§  8i8.  Contents  of  affidavits, — The  affidavits  should 
show  that  the  proceedings  were  conducted  according  to  the 
statute  in  force  when  the  default  occurred  ;*  they  must 
be  full  enough  in  details  to  show  that  the  statute  was 
complied  with,  because  a  foreclosure  by  advertisement  is 
technical  and  not  a  proceeding  in  which  a  court  of  equity 
can  remedy  defects.'  An  affidavit  which  simply  states, 
that  publication  of  the  notice  of  sale  was  had  "  in  each 
week,"  instead  of  "  in  each  and  every  week,"*  or  that 
the  notice  of  sale  was  affixed  to  the  door  of  the  court 
house  in  said  county,  "  the  place  where  the  courts  are 
directed  to  be  held,'"  or  that  the  notice  Avas  affixed  twelve 
weeks  before  the  sale,  without  showing  that  the  party 
making  the  affidavit  afterwards  saw  it  there,  is  sufficient.* 

But  it  is  not  enough  to  state,  that  the  notice  was  posted 
"  in  a  proper  manner,"  or  served  on  '*  certain  persons  named 


>  Brewster  v.  Power,  10  Paige  Ch.  *  James  v,  Stull,   9  Barb.  (N.  Y.) 

(N.  Y.)  562  (1844).     See  also  Chal-  482  (1850). 

mers  v.  Wright,  5  Robt.  (N.  Y.)  713  '  Dwight  v.  PhiUips,  48  Barb.  (N. 

(1866).  Y.)  116  (1865). 

•  Layman  v.  Whiting,  20  Barb.  (N.  «  Howard  v.  Hatch,  29  Barb.  (N. 

T.)  559  (1855)  ;  Amot  v.  McClure,  Y.)  297  (1859). 

A  Den.  (N.  Y.)  41  (1847).  ■"  Bunce  v.  Pveed,  16  Barb.  (N.  Y.) 

«  Story  V.  Hamilton,  86  N.  Y.  428  347  (1853). 

(1881) ;  Mowry  v.   Sanborn,   72  N.  »  Hornby  v.  Cramer,  12  How.  (N 

Y.  634  (1878) ;  8.  c.  68  N.  Y.  153.  Y.)  Pr.  490  (1855). 


918  CONTENTS    OF    AFFIDAVITS.  [§  819. 

therein,"  or  that  it  "was  properly  folded  and  directed,"  and 
that  a  "proper  postage-stamp  was  placed  on  each  of  said 
letters,"  without  stating  the  mode  of  folding  and  directing, 
and  the  place  of  residence  of  the  persons  for  whom  the 
notice  was  intended.'  The  affidavits  must  show  that 
the  places  to  which  the  notices  were  mailed  to  the  parties, 
were  the  residences  of  such  parties,*  because  the  fact  of 
residence  is  important,  and  should  be  stated  positively  and 
with  accuracy  ;^  but  it  seems  that  a  foreclosure  by  advertise- 
ment and  sale  will  not  be  void,  because  the  affidavit  of  service 
of  the  notice  on  the  mortgagors  by  mail,  was  on  information 
and  belief  only,  as  to  their  place  of  residence,  where  it  is  not 
shown  that  the  mortgagors  failed  to  receive  such  notices, 
or  that  they  did  not  reside  at  the  place  mentioned  in  the 
affidavit,  at  the  time  the  notices  were  mailed  to  them.* 

In  New  York,  since  the  amendment  of  1844,  requiring 
.service  of  the  notice,  as  well  as  the  publication  and  posting 
thereof,  the  affidavit  must  state  that  such  service  was 
made.*  A  statement  in  the  affidavit  that  service  was  made 
upon  a  person,  naming  him  as  "  administrator,"  has  been 
held  sufficient,  and  it  has  been  held  further,  that  the  object 
of  the  statute  was  thereby  fully  complied  with.' 

§  819.  Amending  affidavits. — If  the  affidavits  are  defec- 
tive, it  seems  that  amended  affidavits  may  be  filed  according 
to  the  facts;  as  against  the  mortgagor,  at  least,  they  may  be 
filed  at  any  time.'  But  in  an  action  for  ejectment,  brought 
against  the  purchaser  at  a  sale,  it  was  held  that  the  court 
had  no  power  to  allow  the  purchaser  to  amend  the  affida- 
vits so  as  to  state  the  facts  omitted.     Statutory  proceedings 


'  Chalmers  v.    Wright,   5  Robt.  *  George  v.    Arthur,    2  Hun  (N. 

(N.  Y.j  713  (18C6).  Y.)  406  (1874) ;  s.  c.  4  T.  &  C.  (N. 

«  Dwight  V.  Phillips,  48  Barb.  (N.  Y.)  6:]5. 

Y.)  116  (1865).  T  Bunce  v.  Reed,  16  Barb.  (N.  Y.) 

'Mowry  v.   Sanborn,  7  Hun  (N.  347(1853).     See  Story  v.  Hamilton, 

Y.)  380  (1876) ;  s.  c.  62  Barb.  (N.Y.)  86  N.  Y.  428  (1881) ;  Mowry  v.  San- 

223.  born,  72  N.  Y.  534  (1878).     But  a 

*  Mowry  v.  Sanborn,  62  Barb.  (N.  different  rule  seems  to  be  held  in 
Y.)  223  (1872).  Dwight  v.  Phillips,  48  Barb.  (N.  Y.) 

*  Layman  v.    Whiting,  20  Barb.  116  (1865). 
(N.  Y.)  559  (1855). 


§§820-821.]         EEOOEDma  AFTTDAVITS.  919 

to  foreclose  a  mortgage  are  not  proceedings  in  a  court,  such 
as  to  authorize  the  court  to  supply  omissions,  or  to  remedy 
defects  in  the  affidavits.' 

§  820.  Recording  affidavits. — The  Code  provides,'  that 
the  affidavits  required  to  be  made  "  may  be  filed  in  the 
office  for  recording  deeds  and  mortgages,  in  the  county 
where  the  sale  took  place.  They  must  be  recorded  at  length 
by  the  officer  with  whom  they  are  filed,  in  the  proper  book 
for  recording  mortgages.  The  original  affidavits,  so  filed, 
the  record  thereof,  and  a  certified  copy  of  the  record,  are 
presumptive  evidence  of  the  matters  of  fact  therein  stated, 
with  respect  to  any  property  sold,  which  is  situated  in  that 
county.  Where  the  property  sold  is  situated  in  two  or  more 
counties,  a  copy  of  the  affidavits,  certified  by  the  officer 
with  whom  the  originals  are  filed,  may  be  filed  and  recorded 
in  each  other  county,  wherein  any  of  the  property  is  situated. 
Thereupon  the  copy  and  the  record  thereof  have  the  like 
effect,  with  respect  to  the  property  in  that  county,  as  if  the 
originals  were  duly  filed  and  recorded  therein." 

The  Code  also  provides,'  that  "  a  clerk  or  a  register,  who 
records  any  affidavits,  or  a  certified  copy  thereof,  filed  with 
him,  must  make  a  note  upon  the  margin  of  the  record  of  the 
mortgage,  in  his  office,  referring  to  the  book  and  page,  or 
the  copy  thereof,  where  the  affidavits  are  recorded." 

§821.  Necessity  of  recording  affidavits. — An  affidavit 
of  the  service  of  the  notice  of  sale  upon  the  parties  entitled 
thereto,  is  a  necessary  part  of  the  record ;  without  it,  the 
record  will  be  fatally  defective.*  In  a  foreclosure  by  advertise- 
ment the  legal  title  to  the  premises  is  transferred  by  recording 


'  Dwight  V.  Phillips,  48  Barb.  (N.  held  in  some  cases,  however,   that 

T.)  116  (1865).  the   recording  of  the  affidavits  of 

*  N.  Y.  Code  Civ.  Proc.  §  2398.  publication  and  posting  is  not  neces- 
»  N.  Y.  Code  Civ.  Proc.  §  2399.  sary  to  perfect  the  title.     See  Mowry 

*  Mowry  v.  Sanborn,  65  N.  Y.  581  v.  Sanborn,  68  N.  Y.  153,  164 
(1875),  reversing  62  Barb.  (N.  Y.)  (1877) ;  Howard  v.  Hatch,  29  Barb. 
223.  For  further  decisions,  see  68  (N.  Y.)  297  (1859) ;  Osborn  v.  Mer- 
N.  Y.  153  (1877),  reversing  7  Hun  win,  12  Hun  (N.  Y.)  382  (1877); 
(N.  Y.)  380,  and  72  N.  Y.  534  (1878),  Frink  v.  Thompson,  4  Lans.  (N.  Y.) 
reversing  11  Hun  (N.  Y.)  545.     It  is  489  (1869). 


920  CONTRADICTING    AFFIDAVITS.  [§823. 

the  affidavits;  a  plaintiff  in  ejectment,  claiming  under  a 
statutory  foreclosure,  can  not  support  his  action  by  procur- 
ing the  necessary  affidavits  in  the  foreclosure,  to  be  made 
subsequently  to  the  commencement  of  the  action  in  eject- 
ment.' 

The  filing  and  recording  of  the  affidavits  is  not  necessary, 
however,  as  against  the  mortgagor's  equity  of  redemption, 
which  is  effectually  barred  and  foreclosed  by  the  sale,  not- 
withstanding the  fact  that  the  affidavit  of  the  publication  of 
the  notice  of  sale,  and  of  the  posting  thereof,  may  not  have 
been  made  and  recorded  as  required  by  statute,  until  fifteen 
years  thereafter,  and  after  an  action  to  redeem  was  brought. 
Neither  will  the  equitable  title  of  the  purchaser  be  defeated 
by  a  claim  to  redeem." 

§  822.  Contradicting  affidavits. — The  affidavits  required 
to  be  filed  in  a  foreclosure  by  advertisement,  may  be  contro- 
verted by  the  mortgagor,  or  by  any  person  claiming  under 
him  ;  and  any  of  the  facts  stated  therein  may  be  disproved 
by  any  person  except  the  mortgagee  and  those  claiming 
under  him.^ 

Such  affidavits,  being  made  ex  parte,  are  only  prima 
facie  evidence  of  the  facts  stated  therein  ;*  they  are  merely 
evidence  of  the  exercise  of  the  power  of  sale  as  prescribed 
by  statute  for  the  benefit  of  the  purchaser,  and  he  may 
show  facts  necessary  to  correct  any  errors  therein.*  But  the 
mortgagee  and  those  claiming  under  him  in  an  action  to 
recover  possession  of  the  premises,  must  stand  on  the 
affidavits,  as  they  existed  at  the  time  of  the  action." 


»  Tuthlll  V.  Tracy,  31  N.  Y.  157  Hun  (N.  Y.)  380.    See  Arnot  v.  Mc- 

(1865) ;    Bryan  v.  Butts,   27  Barb.  Clure,  4  Den.  (N.  Y.)  41  (1847). 

(N.    Y.)    503    (1857) ;     Layman    v.  ^  gtory  v.  Hamilton,  86  N.  Y.  428 

Whiting,    20    Barb.    (N.    Y.)    559  (1881),  affg  20  Hun  (N.  Y.)  133. 

(1855) ;    Cohoes    Co.    v.    Goss,    13  ^  Story  v.  Hamilton,  86  N.  Y.  428 

Barb.  (N.  Y.)  137  (1852) ;  Arnot  v.  (1881). 

McClure,  4  Den.  (N.  Y.)  41  (1847).  «  Dwight  v.  Phillips,  48  Barb.  (N. 

«  Tuthill  V.  Tracy,  31  N.  Y.  157  Y.)  116  (1865) ;  Mowry  v.  Sanborn,  7 

(1865).  Hun  (N.Y.)  380  (1876).  But  see  Bryan 

»  Sherman  v.  Willett,    42   N.  Y.  v.  Butts,  27  Barb.  (N.  Y.)  503  (1857). 

146    (1870);    Mowry    v.    Sanborn,  It  is  thought  by  some  that,  inasmuch 

62  Barb.  (N.  Y.)  223  (1872) ;  s.  c.  7  as  the  affidavits  may  be  made  at  any 


§§  823-824.]  EFFECT   OF  AFFTDAYITS.  921 

§  823.  Effect  of  affidavits. — The  affidavits  required  in  a 
foreclosure  by  advertisement  are  simply  evidence  of  the 
completion  of  the  proceedings,  and  are  for  the  benefit  of 
the  purchaser  at  the  sale,  and  may  be  made  at  any  time 
after  the  sale  has  been  completed.*  The  mortgagor  has  a 
right  to  retain  possession  of  the  mortgaged  premises  under 
foreclosure  by  advertisement,  however,  until  the  foreclosure 
is  perfected  by  the  making  and  filing  of  the  affidavits,'  just 
as  under  a  judgment  of  foreclosure  in  an  equitable  action 
he  is  entitled  to  retain  possession  until  the  execution  and 
delivery  of  the  deed  by  the  officer  making  the  sale.* 

The  affidavits  requiied  by  the  statute  are  instruments  of 
conveyance  as  well  as  evidence  authorizing  a  conveyance, 
and  the  title  does  not  pass  until  they  are  completed  and 
filed.*  But  the  more  recent  cases  hold,  that  the  recording 
of  such  affidavits  is  not  necessary  to  pass  the  title  to  the 
purchaser,  because  the  statute  does  not  make  recording 
essential,  and  it  seems  that  the  affidavits  themselves  are 
made  by  the  statute  as  good  evidence  of  the  facts  as  the 
record  itself.* 

§  824.  A  deed  not  necessary. — Under  the  New  York 
Code  of  Civil  Procedure,*  *'  the  purchaser  of  the  mortgaged 


time  after  the  sale,  there  is  no  rea-  Barb.  (N.  Y.)  559  (1855) ;  Arnot  v. 

son  -why  they  may  not  be  corrected  McClure,  4  Den.  (N.  Y.)  41  (1847). 

at  anytime,  if  such  corrections,  when  See  Tuthill  v.  Tracy,  31  N.  Y.  157 

made  prior  to  the  commencement  of  (1865) ;  Howard  v.  Hatch,  29  Barb, 

an  action  to  redeem,  are  material  to  (N.  Y.)  297  (1859). 

their   maintenance,    or    that    such  *  Mitchell  v,  Bartlett,  51  N.  Y, 

affidavits  may  be  made  even  after  447  (1873).     See  ante  %  588. 

the    commencement    of    such    an  *  Bryan  v.  Butts,   27  Barb.   (IT. 

action.    Bunce  v.  Keed,  16  Barb.  (N.  Y.)  503  (1857) ;  Layman  v.  Whiting, 

Y.)  347  (1853).     See  Story  v.  Hamil-  20  Barb.  (N.  Y.)  559  (1855) ;  Arnot 

ton,  86  N.  Y.   428  (1881) ;   Mowry  v.    McClure,    4   Den.    (N.   Y.)   41 

V.  Sanborn,  68  K  Y.  153  (1877).  (1847), 

'  Tuthill  V.  Tracy,  31  N.  Y.  157  »  Mowry    v.     Sanborn,     68     N. 

(1865).     See  Osborn  v.  Merwin,  12  Y.    153,    164    (1877) ;    Howard    v. 

Hun  (N.  Y.)  332  (1877) ;  Hawley  v.  Hatch,  29  Barb.  (N.  Y.)  297  (1859) ; 

Bennett,  5  Paige  Ch.  (N.  Y.)  104  Osborn  v.  Merwin,  12  Hun  (N.  Y.) 

0835).  332  (1877) ;   Frink  v.  Thompson,  4 

'  Bryan  v.  Butts,  27  Barb.  (N.  Y.)  Lans.  (N.  Y.)  489  (1869). 

603  (1857) ;  Layman  v.  Whiting,  20  «  N.  Y.  Code  Civ.  Proc.  §  2400. 


923  A   DEED    NOT    NECESSARY.  [§  825. 

premises,  upon  a  sale  conducted  as  prescribed  by  this  statute, 
obtains  title  thereto,  against  all  persons  bound  by  the  sale, 
without  the  execution  of  a  conveyance.  Except  where  he  is 
the  person  authorized  to  execute  the  power  of  sale,  such  a 
purchaser  also  obtains  title,  in  like  manner,  upon  payment 
of  the  purchase  money,  and  compliance  with  the  other 
terms  of  sale,  if  any,  without  the  filing  and  recording  of 
the  affidavits,  as  prescribed  by  this  statute.  But  he  is  not 
bound  to  pay  the  purchase  money,  until  the  affidavits  of 
foreclosure,  with  respect  to  the  property  purchased  by  him, 
are  filed,  or  delivered,  or  tendered  to  him  for  filing." 

§  825.  Obtaining  possession  by  purchaser— Summary 
proceedings. — The  Code  provides,'  that  where  property 
has  been  duly  sold  upon  the  foreclosure,  by  the  proceedings 
above  prescribed,  of  a  mortgage  executed  by  the  party  in 
possession,  or  by  a  person  under  whom  he  claims,  and  the 
title  has  been  duly  perfected,  that  notice  to  quit  the  same 
may  be  given,  and  he  may  be  removed  therefrom  in  the 
manner  prescribed  by  statute  for  summary  ejectment.  In 
such  a  proceeding,  it  is  thought  to  be  sufficient  to  produce 
before  the  court  the  record  of  the  proceedings  on  fore- 
closure.* 

If  the  proceedings  in  the  foreclosure  were  regular,  the 
validity  of  the  mortgage,  or  the  motives  of  the  applicant,  can 
not  be  inquired  into  in  summary  proceedings ;  but  it  is  the 
duty  of  the  court  to  examine  the  evidence  of  the  foreclosure 
and  to  ascertain  whether  the  papers  upon  their  face  confer 
a  right  to  the  possession  of  the  property.* 


•  New  York  Code  Civ.  Procedure,  (1875) ;  Brown  v.  Belts,  13  Wend. 

§  2232,  (N.  Y.)  32  (1834). 

'  People  ex  rel.   Bridenbecker  v,  *  Getting  v.  Molir,  34  Ilun  (N.  Y.) 

Prescott,  3  Hun  (N.  Y.)  419,  424  340  (1884). 


CHAPTER    XXXV. 


STRICT  FORECLOSURE. 


§  836.  Nature  of  the  remedy. 

827.  Effect  of  a  strict  foreclosure. 

828.  A  severe  remedy. 

829.  In  what  states  allowed. 

830.  In  what  states  not  allowed. 

831.  Illinois  doctrine  and  practice. 

832.  New  York  doctrine  and  prac- 

tice. 
838.  Has  strict  foreclosure  been 

abolished    by  the  Code  in 

New  York  ? 
884.  Jurisdiction    of     court      to 

decree  a  strict  foreclosure  in 

another  state. 


§  835.  Parties    to    a     strict    fore- 
closure. 

836.  Who  may  maintain  a  strict 

foreclosure. 

837.  Strict     foreclosure     against 

infants. 

838.  Pleadings  in    a   strict    fore- 

closure. 

839.  Judgment  in  a   strict  fore- 

closure. 

840.  Time  for  redemption. 

841.  Setting    aside    and    opening 

strict  foreclosure. 


§  826.  Nature  of  the  remedy. — The  remedy  of  strict 
foreclosure,  which  operates  to  transfer  to  the  mortgagee  the 
entire  mortgaged  estate,  is  regarded  with  disfavor  by 
the  courts  of  this  country.  This  method  of  foreclosure  had 
its  origin  at  a  time  when  a  mortgage  was  regarded  as  a 
conditional  sale  of  the  land,  rather  than  as  a  security  for  the 
payment  of  a  debt.  Chancellor  Jones  has  said,  in  Lansing 
V.  Goelet  :'  "  In  early  times  when  a  mortgage  was  still 
regarded  as  a  conditional  sale  of  the  land,  rather  than  as  a 
mere  security  for  the  payment  of  a  debt,  an  adherence  to 
the  form  of  the  condition  in  the  application  of  the  remedy 
of  the  mortgagee,  was  natural  ;  and  it  would  necessarily 
lead  to  the  decree  of  strict  foreclosure,  requiring  the  mort- 
gagor to  perform  the  condition  by  paying  the  debt  within  a 
given  time,  to  be  limited  by  the  court,  or  be  forever  barred 
from  his  right  to  redeem." 

With  the  establishment  of  the  doctrine  now  prevailing  in 
this  country,  that  a  mortgage  is  a  mere  security  for  the 
payment  of  a  debt,  a  breach  of  the  condition  for  payment 


•  9  Cow.  (N.  Y.)  346,  352  (1827), 
92S 


924 


NATUEE   OF   STRICT   FORECLOSUEE. 


[§  827. 


merely  giving  to  the  mortgagee  a  right  to  proceed  against 
the  security,  the  natural  remedy  for  such  breach  was  to  sell 
the  property  and  apply  the  proceeds  thereof  to  the  payment 
of  the  mortgage  debt.  The  advantages  to  the  debtor  of  a 
sale  of  the  property,  instead  of  a  strict  foreclosure,  were 
much  discussed  before  the  practice  of  ordering  a  sale  was 
adopted,  and  became  the  almost  universal  remedy  as  it 
now  is.* 

§  827.  Effect  of  a  strict  foreclosure. — The  effect  of  a 
strict  foreclosure,  is  to  transfer  to  the  mortgagee  the  land 
for  the  debt.*  A  strict  foreclosure  merely  extinguishes  the 
right  of  redemption.*  It  does  not  become  operative  as  a 
satisfaction  of  the  debt,*  until  the  time  fixed  by  the  decree 
for  the  redemption  of  the  premises  has  expired.' 

It  has  been  said,  that  the  debt  will  not  be  extinguished 
by  such  a  foreclosure,*  unless  the  property  is  of  sufficient 


«  See  BoUes  v.  Duff,  43  N.  Y.  469 
(1871) ;  B.  c.  10  Abb.  (N.  Y.)  Pr.  N. 
S.  399  ;  41  How.  (N.  Y.)  Pr.  355  ; 
55  Barb.  (N.  Y.)  313,  580  ;  7  Abb. 
(N.  Y.)  Pr.  N.  S.  385  ;  38  How.  (N. 
Y.)  Pr.  493,  505  ;  Lansing  v,  Goelet, 
9  Cow.  (N.  Y.)  346  (1827);  Rosa 
▼.  Boardman,  22  Hun  (N.  Y.)  527, 
581  (1880) ;  Mills  v.  Dennis.  3  Johns. 
Ch.  (N.  Y.)  367  (1818) ;  Miissina  v. 
Bartlett,  8  Port.  (Ala.)  277  (1839); 
Williams'  Case,  3  Bland.  Ch.  (Md.) 
186, 193  (1841) ;  Wilder  v,  Haughey, 
21  Minn.  101  (1874). 

•  Lansing  v.  Goelet,  9  Cow.  (N. 
Y.)  346,  352  (1827).  In  this  case  the 
court  say :  "  In  a  country  where 
the  laws  do  not  permit  the  sale  of 
real  estate  by  execution  at  law,  for  the 
Batisf  action  of  debts,  there  might  be 
some  apology  for  preferring  the  fore- 
closure to  the  sale.  But  in  modern 
times,  when  the  more  liberal  princi- 
ple has  gained  the  ascendency,  which 
deals  with  the  mortgage  as  being,  in 
its  substance  and  legal  effect,  a  mere 
security  for   the    payment    of    the 


debt;  and  in  this  state,  where  the 
lands  of  the  debtor  are  subjected  to 
sale  for  the  satisfaction  of  his  debts, 
it  would  be  strange,  indeed,  that  a 
court  of  equity  should  be  without 
the  power  to  decree  a  sale  of  the 
mortgaged  premises  for  the  satisfac- 
tion of  the  debt,  and  the  mortgagee 
confined  to  a  decree  for  a  strict  fore- 
closure " 

*  Brainard  v.  Cooper,  10  N.  Y. 
359  (1852) ;  Bradley  v.  Chester  Val- 
ley R.  Co.,  36  Pa.  St.  150  (1860). 

*  Spencer  v.  Harford,  4  Wend. 
(N,  Y.)  381,  384  (1830). 

'  Peck's  Appeal,  31  Conn.  215 
(1862) ;  Edgerton  v.  Young,  43  111. 
464(1867). 

«  Vansant  v.  AUmon,  23  Bl.  30 
(1859) ;  Nuuemacher  v.  Ingle,  20 
Ind.  135(1863);  Brown  v.  Wernwag, 
4  Blackf.  (Ind.)  1  (1835) ;  Germania 
Building  Assoc,  v.  Neill,  93  Pa.  St. 
322  (1880) ;  Devereaux  v.  Fairbanks, 
52  Vt.  587  (1880)  ;  Smith  v.  Lamb, 

1  Vt.  395  (1829)  ;  Strong  v.  Strong, 

2  Aik.  (Vt.)  373  (1827). 


§§  828-829.]         STRICT  foeeclosuee. 


925 


value  to  satisfy  it,'  but  that  the  foreclosure  simply  operates 
as  a  payment /r(7 /a«/^.*  In  this  form  of  foreclosure  there 
can  be  no  judgment  for  deficiency  ;*  to  recover  a  deficiency, 
the  mortgagee  will  be  relegated  to  an  action  at  law  upon  the 
debt. 

§  828.  A  severe  remedy. — Strict  foreclosure  is  generally 
regarded  in  courts  of  equity  as  a  severe  remedy.  It  is 
now  rarely  pursued  or  allowed,  except  in  cases  where  a 
foreclosure  by  an  equitable  action  has  been  defectively  con- 
ducted and  some  judgment  creditor,  or  other  subsequent 
lienor  or  incumbrancer,  not  having  been  made  a  party  to  the 
action,  has  a  right  to  redeem.  As  to  him,  a  strict  foreclosure 
is  proper  and  effective,  and,  furthermore,  the  quickest  and 
least  expensive  procedure  that  can  be  pursued.* 

§  829.  In  what  states  allowed. — Strict  foreclosure  is 
the  usual  procedure  for  enforcing  mortgages  in  Connecti- 
cut' and  in  Vermont  ;*  where  the  interests  of  the  parties 
seem  to  require  it,  it  is  also  allowed  in  Alabama,'  Illinois," 


*  DeGrant  v.  DeGraham,  1  N. 
Y.  Leg.  Obs.  75  (1842);  Morgan 
V.  Plumb,  9  Wend.  (K  Y.)  287 
(1832).  See  Lansing  v.  Goelet,  9 
Cow.  (K  Y.)  346,  352  (1827);  Globe 
Ins.  Co.  V.  Lansing,  5  Cow.  (N.  Y.) 
380  (1826) ;  s.  c.  15  Am.  Dec.  374 ; 
Charter  v.  Stevens,  3  Den.  (N.  Y.) 
35  (1846) ;  Craig  v.  Tappen,  2  Sandf. 
Ch,  (N.  Y.)  78  (1844);  Case  v. 
Boughton.  11  Wend.  (N.  Y.)  106 
(1833) ;  Spencer  v.  Harford,  4  Wend. 
(N.  Y.)  381,  384  (1830) ;  Hatch  v. 
White,  2  Gall.  C.  C.  152  (1814).  It 
seems  that  formerly  in  Connecti- 
cut a  strict  foreclosure  operated 
to  extinguish  the  debt  without  re- 
gard to  the  value  of  the  property. 
Swift  V.  Edson.  5  Conn.  531  (1825)  ; 
Derby  Bank  v.  Landon,  3  Conn.  62 
(1819);  Fitch  v.  Coit,  1  Root  (Conn.) 
266  (1791);  McEven  v.  Welles,  1 
Root  (Conn.)  202  (1790). 

«  Paris  v.  Hulett,  26  Vt.  308  (1854). 


«  Bean  v.  Whitcomb,  13  Wis.  431 
(1861). 

*  Bolles  V.  Duff,  43  N.  Y.  469,  474 
(1871). 

*  Palmer  v.  Mead,  7  Conn.  149, 
152  (1828) ;  Conn.  Gen.  Stats.  35b5 
(1855). 

« Paris  V.  Hulett,  26  Vt.  308 
(1854).  See  Sprague  v.  Rockwell, 
51  Vt.  401  (1878). 

'  Where  the  parties  to  the  mort- 
gage have  provided  for  it,  and  it  is 
for  their  interests.  Hunt  v.  Lewin,  4 
Stew.  &  P.  (Ala.)  138  (1833).  It  is 
said  to  be  the  proper  remedy,  for  the 
purpose  of  cutting  off  intermediate 
incumbrances  and  liens,  where  the 
mortgagee  has  acquired  title  to  the 
equity  of  redemption  and  it  is  worth 
no  more  than  the  debt.  Hitchcock 
v.  Bank  of  Pennsylvania,  7  Ala.  386 
(1844). 

^  Where  the  premises  are  not 
worth    the  face  of    the  mortgage, 


926 


WHEKJE   STRICT   FORECLOSURE   ALLOWED.      [§  830. 


Iowa,'  Maine,*  Massachusetts,*  Minnesota,*  North  Carolina* 
and  Wisconsin.*  This  method  of  foreclosure  has  sometimes 
been  allowed  in  Kentucky/  Nebraska,*  New  York*  and 
Ohio." 

§  830.     In  what  states  not  allowed. — In  California,  it  is 
said  that  the  foreclosure  of  a  mortgage  in  the  English  sense, 


and  the  mortgagor  is  insolvent. 
Stephens  v.  Bicknell,  27  lU.  444 
(1862) ;  s.  c.  81  Am.  Dec.  242 ;  also 
where  the  interests  of  both  parties 
require  it.  See  Johnson  v.  Donnell, 
15  ni.  97  (1853);  Boyer  v.  Boyer,  89 
111.  447(1878) ;  s.  c.  8  Cent.  L.  J.  213. 
'  Where  a  junior  lienholder  has 
not  been  made  a  party  to  a  suit  to 
foreclose  a  prior  mortgage,  the  pur- 
chaser at  the  foreclosure  sale  may 
require  such  lienholder  to  exercise 
his  right  of  redemption,  or,  in  de- 
fault thereof,  to  be  foreclosed  and 
barred  of  all  his  rights.  Shaw  v. 
Heisey,  48  Iowa,  468  (1878). 

"Williams  v.  Hilton,  35  Me. 
647  (1853) ;  s.  c.  58  Am.  Dec.  729. 

'  Norton  v.  Palmer,  142  Mass. 
433  (1886) ;  Thompson  v.  Tappan, 
139  Mass.  506  (1885);  Thompson 
V.  Kenyon,  100  Mass.  108  (1868) ; 
Green  v.  Kemp,  13  Mass.  515  (1816) ; 
8.  c.  7  Am.  Dec.  169 ;  Pomeroy  v. 
Winship,  12  Mass.  514  (1885) ;  s.  c. 
7  Am.  Dec.  91. 

*  Heyward  v.  Judd,  4  Minn.  483 
(1860) ;  but  the  courts  of  this  state 
are  adverse  to  this  method  of  fore- 
closure, and  will  in  most  cases  con- 
fine the  mortgagee  to  a  sale  of  the 
property.  See  Wilder  v.  Haughey, 
21  Minn.  101  (1874). 

'  In  this  state  foreclosure  was 
formerly  made  without  a  sale.  See 
Fleming  v.  Sitton,  1  Dev.  &  B.  (N. 
C.)Eq.  621  (1837);  subsequently  it 
became  the  practice  in  all  instances 
to  direct  a  sale  on  application,  but  if 
no  application  was  made,  to  decree  a 


strict  foreclosure.  See  Green  v. 
Crockett,  2  Dev.  &  B,  (N.  C.)  Eq. 
390(1839). 

*  Sage  V.  McLaughlin,  34  Wis. 
550  (1874) ;  Bean  v.  Whitcomb,  13 
Wis.  431  (1861).  For  the  parties 
consent,  see  also  Bresnahan  v.  Bres- 
nahan,  46  Wis.  385  (1879). 

'  But  the  Kentucky  Code  of  Pro- 
cedure now  provides,  that  there  shall 
be  a  sale  in  all  cases  ;  Ky.  Code  of 
1867,  §  404 ;  Code  of  1876,  §  375. 
See  Caut'man  v.  Sayre,  2  B.  Mon. 
(Ky.)  202  (1841). 

*  Under  the  territorial  statutes  pro- 
viding for  a  sale,  it  was  held  that  a 
strict  foreclosure  might  be  decreed. 
Woods  V.  Shields,  1  Neb.  453  (1871); 
but  at  present,  it  seems  that  the 
remedy  is  confined  to  a  sale  of  the 
premises.  See  Kyger  v.  Ryley,  3 
Neb.  20  (1873). 

•Bolles  V.  Duff,  43  N.  Y.  469 
(1871) ;  s.  c.  10  Abb.  (N.  Y.)  Pr.  N. 
S.  399,  414 ;  41  How.  (N.  Y.)  Pr. 
355  ;  Kendall  v.  Treadwell,  5  Abb. 
(N.  Y.)  Pr.  16  (1857) ;  s.  c.  14  How. 
(N.  Y.)  Pr.  165 ;  Blanco  v.  Foote, 
32  Barb.  (N.  Y.)  535  (1860) ;  Frank- 
lyn  v.  Hay  ward,  61  How.  (N.  Y.) 
Pr.  46  (1881);  Ross  v.  Boardman,  22 
Hun  (N.  Y.)  531  (1880);  Benedict  v. 
Gilman,  4  Paige  Ch.  (N.  Y.)  58 
(1833).  But  it  is  thought  that  strict 
foreclosure  has  been  abolished  iu 
New  York.  See  N.  Y.  Code  Civ. 
Proc.  §  1626. 

'"  Where  two-thirds  of  the  value  of 
the  mortgaged  premises  did  not 
exceed  the  debt.    See  Higgins   v. 


§  830.] 


STRICT   FORECLOSURE   NOT   ALLOWED. 


927 


by  which  the  mortgagor,  after  default,  is  called  upon  to  pay 
the  debt  by  a  specified  day,  or  to  be  forever  barred  of  the 
equity  of  redemption,  is  unknown  to  our  laws.*  In  Gamut  v. 
Gregg,"  it  is  said  that  a  strict  foreclosure  has  no  place  in 
the  Iowa  system  of  procedure.  Strict  foreclosure  in  the 
English  sense   of   the   phrase    is   not   allowed  in  Florida,* 


West,   5  Ohio,  554  (1832) ;  Anon.  1 
Ohio,  235  (1823). 

»  McMillan  v.  Richards,  9  Cal.  365, 
411  (1858) ;  8.  c.  70  Am.  Dec.  655. 
See  Goodenow  v.  Ewer,  16  Cal.  461, 
467(1860);  s.c.76Am.  Dec.  540.  In 
this  case  the  court  say:  "  In  McMil- 
lan V.  Richards,  supra,  we  had 
occasion  to  consider  the  subject  at 
great  length,  and  to  observe  upon 
the  diversity  existing  in  the  adjudged 
cases.  We  there  asserted  what  had 
previously  been  held  in  repeated  in- 
stances, the  equitable  doctrine  i's 
the  true  doctrine  respecting  mort- 
gages, and  have  ever  since  applied 
it  under  all  circumstances.  John- 
son V.  Sherman,  15  Cal.  287  (1860) ; 
B.  c.  76  Am.  Dec.  481 ;  Clark  v. 
Baker,  14  Cal.  612  (1860) ;  s.  c.  76 
Am.  Dec.  449  ;  Koch  v.  Briggs,  14 
Cal.  256  (1859) ;  s.  c.  73  Am.  Dec. 
651 ;  Haffley  v.  Maier,  13  Cal.  13 
(1859) ;  Nagle  v.  Macy,  9  Cal.  426 
(1838).  When,  therefore,  a  mort- 
gage is  here  executed,  the  estate 
remains  in  the  mortgagor,  and  a 
mere  lien  or  incumbrance  upon  the 
premises  is  created.  The  proceed- 
ings for  a  foreclosure  of  the  equity 
of  redemption,  as  those  terms  are 
•understood  where  the  common  law 
view  of  mortgages  is  maintained,  is 
unknown  to  our  system,  so  far,  at 
least,  as  the  owner  of  the  estate  is 
concerned.  The  mortgagee  can 
here,  in  no  case,  become  the  owner 
of  the  mortgaged  premises,  except 
by  purchase  upon  a  sale  under  a 
judicial    decree    consummated    by 


conveyance.  Proceedings  in  the 
nature  of  a  suit  to  foreclose  an  equity 
of  redemption,  held  by  a  subsequent 
incumbrancer,  may  undoubtedly 
be  maintained  by  a  purchaser  under 
the  decree,  where  such  incumbrancer 
was  not  made  a  party  to  the  original 
suit  to  enforce  the  mortgage.  Such 
incumbrancer  may  be  called  upon 
to  assert  his  right  by  virtue  of  his 
lien,  and  his  equity  of  redemption, 
extending  to  the  period  provided  by 
the  statute  of  limitations,  be  thus 
reduced  to  the  statutory  period  of 
six  months.  But  the  owner  of  the 
mortgaged  premises,  where  a  power 
of  sale  is  not  embraced  in  the  mort- 
gage, can  not,  under  any  circum- 
stances, be  cut  off  from  his  estate, 
except  by  sale  in  pursuance  of  the 
decree  of  the  court.  See  Montgomery 
V.  Tutt,  11  Cal.  190  (1858) ;  Whitney 
V.  Higgins,  10  Cal.  547  (1858) ;  s.  c. 
70  Am.  Dec.  748;  Cal.  Practice 
Act,  §  260.  To  give  validity  to  such 
decree,  the  owner  must  be  before 
the  court  when  it  is  rendered.  No 
rights  which  he  possesses  can  other- 
wise be  affected,  and  any  direction 
for  their  sale  would  be  unavailing  for 
any  purpose." 

2  37  Iowa,  573  (1873).  It  seems, 
however,  that  strict  foreclosure  will 
be  allowed  where  a  junior  lienholder 
has  not  been  made  a  party  to  the 
foreclosure  of  a  prior  mortgage. 
See  Shaw  v.  Heisey,  48  Iowa,  468 
(1878). 

2  Browne  v.  Browne,  17  Fla.  607, 
623(1880). 


928  STRICT    FORECLOSURE   IIST    ILLINOIS.  [§  831. 

Indiana,'  Missouri,'  Pennsylvania,'  or  Tennessee.*  In  Indi- 
ana, however,  a  proceeding  in  the  nature  of  a  strict  fore- 
closure may  be  maintained  by  one  who  holds  the  legal  title 
to  the  premises,  as  against  persons  who  have  a  mere  lien 
upon  or  a  right  of  redemption  in  such  premises  ;*  but  such 
a  remedy  is  not  allowable  by  a  mortgagee  as  against  the 
person  who  holds  the  legal  title  to  the  land.' 

§  831.  Illinois  doctrine  and  practice, — In  Illinois  a  strict 
foreclosure  may  be  decreed,  and  generally  will  be,  where  the 
premises  are  not  worth  the  face  of  the  mortgage  and 
the  mortgagor  is  insolvent,'  or  where  the  interests  of  both 
parties  seem  to  require  it.* 

But  where  the  amount  which  the  owner  of  the  equity  of 
redemption  is  required  to  pay  to  redeem  from  a  foreclosure 
sale,  is  less  than  the  value  of  the  property,  a  strict  fore- 
closure can  not  be  maintained  ;  and  under  the  practice  in 
Illinois,'  a  strict  foreclosure  of  a  mortgage  should  not  be 
decreed,  as  a  general  rule,  when  there  are  junior  incumbrances 
upon  the  property,  or  junior  creditors  or  claimants  of  the 
equity  of  redemption.'"  And  where  the  estate  of  a  deceased 
mortgagor  is  insolvent,  that  fact,  as  well  as  the  descent  of 
the  equity  of  redemption  to  infant  heirs,  would  seem  to 
require  the  usual  procedure  of  an  equitable  action." 

But  a  court  of  equity  will  not  sacrifice  or  endanger  the 
rights  of  a  mortgagee  holding  the  oldest  and  preferred  lien  and 
the  best  equity,  for  the  bare  possibility  of  a  wholly  improb- 
able benefit  to  one  having  a  second  lien  and  a  subordinate 


«  Smith   V.   Brand,   64   Ind.   427  '  Stephens  v.  Bichnell,  27  HI.  444 

(1878).  (1862) ;  s.  c.  81  Am.  Dec.  242. 

2  O'Fallon  v.  Clopton,  89  Mo.  284  »  Johnson  v.   Donnell,  15  111.  97 
(1886);  Davis   v.    Holmes,   55    Mo.  (1853). 

349,  351  (1874).  »  Gorham  v.  Farson,  119  111.  425 

3  Winton's  Appeal,  87  Pa.  St.  77  (1887). 

(1878).  '"'Illinois  Starch    Co.    v.    Ottawa 

*  Ilord  V.  James,  1  Overt.  (Tenn.)  Hydraulic   Co.,    15   West    Rep.   56 
201  (1805).  (1888) ;  Boyer  v.  Boyer,  89   111.  447 

«  Jefferson  v.   Coleman,  110  Ind.  (1878). 

515(1886).  "Boyer    v.  Boyer,    89    111.    447 

•  Jefferson  v.  Coleman,  110  Ind.  (1878). 
615  (1886). 


§§  832-833.]  STRICT  foreclosure — new  york.  929 

equity.  In  a  recent  case'  the  court  say:  "We  do  not 
understand  the  rule  in  this  state  to  be  that  a  strict  fore- 
closure will  in  no  case  and  under  no  circumstances  be 
allowed  where  there  are  other  creditors,  or  other  incum- 
brances upon  the  mortgaged  property,  or  purchasers  of 
the  equity  of  redemption.  It  is  undoubtedly  true  that  the 
general  rule  is,  that  a  strict  foreclosure  will  not  be  permitted 
where  there  is  such  a  creditor,  purchaser,  or  incumbrancer ; 
but  in  our  view  there  are  exceptions  to  the  general  rule." 

§  832.  New  York  doctrine  and  practice. — In  New  York, 
the  usual  practice  is  to  order  a  sale  of  the  premises,  as 
this  is  the  most  beneficial  course  for  all  parties.  Actions 
for  strict  foreclosure  are  of  rare  occurrence,  and  are  looked 
upon  with  disfavor  by  the  courts,  except  in  unusual  cases 
where  such  an  action  is  the  only  method  by  which  complete 
justice  can  be  rendered  to  all  the  parties  in  interest.' 

Thus,  a  purchaser  under  a  statutory  foreclosure  is  entitled 
to  maintain  an  action  for  strict  foreclosure  as  against  the 
wife  of  a  mortgagor,'  or  against  a  judgment  creditor  or  a 
subsequent  mortgagee  or  lienor  who  was  not  made  a  party 
to  the  statutory  foreclosure,  and  whose  rights  were  therefore 
not  barred  by  the  sale.*  As  to  such  a  person,  a  strict 
foreclosure  is  not  only  the  proper,  but  it  is  thought  to 
be  the  only  remedy.* 

§  833.  Has  strict  foreclosure  been  abolished  by  the 
Code  in  New  York  ? — It  is  suggested  that  strict  foreclos- 
ure has  been  abolished  by  the   New  York  Code  of  Civil 


>  Illinois    Starch   Co.   v.   Ottawa  474  (1871) ;  s.  c.  10  Abb.  (N.  T.)  Pr. 

Hydraulic  Co.,  15  West.   Rep.   56  N.   S.   399;  41  How.  (N.  Y.)  Pr. 

(1888).  355  ;  Blanco  v.  Foote,  33  Barb.  (N. 

2  Franklyn  v.  Haywood,  61  How.  Y.)  535  (1860);  Franklyn  v.  Hay- 
(N.  Y.)  Pr.  43.  46  (1881);  Bene-  wood,  61  How.  (N.  Y.)  Pr.  46 
diet  V.  Oilman,  4  Paige  Ch.  (N.  Y.)  (1881) ;  Ross  v.  Boardman,  22  Hun 
58  (1833).  (N.  Y.)  527  (1880) ;  Kendall  v.  Tred- 

3  Ross  V.  Boardman,  22  Hun  (TST.  well,  14  How.  (N.  Y.)  Pr.  165 
Y.)  527  (1880).  (1857) ;  Benedict  v.  Gilman,  4  Paige 

*  Bolles  V.  Duff,  43  N.  Y.  469,  Ch.  (N.  Y.)  58  (1833) ;  Goodenow  v. 

474  (1871) ;  s.  c  10  Abb.  (N.  Y.)  Pr.  Ewer,  16  Cal.  461  (1860) ;   s.  c.  76 

K.  S.  399  ;  41  How.  (N.  Y.)  Pr.  355.  Am.  Dec.  540  ;  Shaw  v.  Heisey,  48 

» Bolles  V.  Duff,  43  N.  Y.   469,  Iowa,  468  (1878). 

(59) 


930  STRICT   FORECLOSUKE.  [§§  834-835. 

Procedure,'  which  requires  that  "  in  an  action  to  foreclose 
a  mortgage  upon  real  property,  if  the  plaintiff  becomes 
entitled  to  final  judgment,  if  must  direct  the  sale  of  the 
property  mortgaged,  or  of  such  part  thereof  as  is  sufificient  to 
discharge  the  mortgage  debt,  the  expenses  of  the  sale,  and 
the  costs  of  the  action." 

§  834.  Jiirisdiction  of  court  to  decree  a  strict  fore- 
closure in  another  state. — Where  the  parties  are  within 
the  jurisdiction  of  the  courts  of  a  state,  and  process  is  per- 
sonally served  upon  the  defendants  within  the  state,  an 
action  may  be  maintained  for  strict  foreclosure  against 
lands  in  another  state."  Thus,  in  House  v.  Lockwood,*  an 
action  was  brought  to  procure  a  strict  foreclosure  of  a 
mortgage  given  by  the  defendant  upon  lands  in  Cook 
county,  Illinois,  to  secure  the  payment  of  a  sum  of  money 
due  to  the  plaintiff.  The  referee  dismissed  the  complaint 
upon  the  ground  that  the  court  had  no  jurisdiction  of  the 
action,  because  the  land  was  situated  in  another  state.  But 
the  court  held  this  to  be  error,  because  the  parties  were 
within  the  jurisdiction  of  the  court  when  its  process  was 
served  upon  them,  and  had  appeared  and  put  in  answers 
contesting  the  right  of  the  plaintiff  to  maintain  the  action, 
and  the  court  thereby  acquired  jurisdiction  to  entertain  the 
suit  and  to  grant  the  relief  sought.* 

§  835.  Parties  to  a  strict  foreclosure. — The  rules  as  to 
parties  to  a  strict  foreclosure  are  the  same  as  those  which 
govern  equitable  actions  for  a  sale.*  It  has  been  said, 
however,  that   the   plaintiff  need  not  make  those  persons 


•  N.  Y.  Code  Civil  Proc.  §  1626.  Y.  363  (1852) ;  Lansing  v.  Goelet,  9 

«  See  2  Story's  Eq.  Jur.  (13th  ed.)  Cow.  (N.  Y.)  346,  356  (1827) ;  Rob- 

§§  191,  192,  193.  lin  v.  Long,  60  How.  (N.  Y.)  Pr. 

8  40  Hun  (N.  Y.)  532  (1886) ;  s.  c.  200  (1880) ;    Sutphen  v.  Fowler,   9 

1  N.  Y.  St.  Rep.  196.  Paige  Ch.  (N.  Y.)  280  (1841) ;  Mit- 

■•  In  this  case  the  court  cited  and  chell  v.  Bunch,  2  Paige  Ch.  (N.  Y.) 

applied  Cragin  v.  Lovell,  88  N.  Y.  606,  616,  617  (1831);  Watts  v.  Wad- 

258  (1882) ;  Bolles  v.  Duff,  43  N.  Y.  die,  31  U.  S.  (6  Pet.)  389,  400  (1832); 

469  (1871) ;    s.  0.   10  Abb.  (N.  Y.)  bk.  8  L.  ed.  437,  442. 

Pr.  N.  S.  399  ;  41  How.  (N.  Y.)  Pr.  '  Benedict    v.    Gilman,    4    Paige 

8.')5 ;  Gardner  v.   Ogden,  22  N.  Y.  Ch.  (N.  Y.)  58  (1833). 
337  (1860) ;  Bailey  v.  Ryder,  10  N. 


§§  836-837.]         STRICT  fokeclosuee.  931 

parties  to  the  action  whose  rights  have  already  been 
barred  by  a  previous  foreclosure ;'  but  all  persons  interested 
in  the  mortgage,  or  in  the  mortgaged  property,  must  be 
made  parties  to  the  suit.'  Thus,  the  owner  of  the  equity  of 
redemption  is  a  necessary  defendant,'  and  so  are  subsequent 
mortgagees.* 

§  836.  Who  may  maintain  a  strict  foreclosure. — In 
some  states  a  mortgagee  may  maintain  an  ejectment  on  the 
mortgage  against  the  mortgagor  for  a  condition  broken  ;  so 
may  a  grantee  in  a  deed  absolute  in  form  given  as  security 
for  a  debt.'  And  a  second  mortgagee  may  maintain  an 
action  against  the  first  mortgagee  and  against  the  owner 
of  the  equity  of  redemption.* 

Where  a  bill  in  equity  is  brought  for  a  strict  foreclosure  after 
the  death  of  the  mortgagee,  his  heirs  at  law  are  necessary 
parties  plaintiff,  because  in  such  a  case  the  decree  vests  the 
legal  title  to  the  premises  in  the  heirs,  and  not  in  the  personal 
representatives.' 

§  837.  Strict  foreclosure  against  infants. — In  a  strict 
foreclosure  against  an  infant,  he  is  entitled  to  have  his  day 
in  court  after  he  becomes  of  age,  to  show  any  error  in  the 
decree ;  but  if  there  is  no  error,,  he  will  be  bound  by 
the  decree.*  This  rule  is  based  on  the  ancient  and  well 
settled  principle,  that  no  decree  should  be  rendered  against 
an  infant  without  giving  him  an  opportunity,  on  coming  of 
age,  to  show  cause  against  it.  The  time  usually  allowed  is 
six  months,  and  the  infant  is  entitled  to  the  process  of  the 
court  for  that  purpose  on  coming  of  age.* 


'  Benedict   v.    Oilman,    4   Paige  Williams   v.    Hilton,   35    Me.    547 

Ch.  (N.  Y.)  58  (1833).  (1858) ;  s.  c.  58  Am.  Dec.  729. 

» Lyon  V.  Sanford,  5  Conn.  544  •  Cochran  v.   Godell,   131   Mass. 

(1825).  464  (1881). 

'  Goodenow  v.  Ewer,  16  Cal.  461  '  Osborne  v.  Tunis,  25  N.  J.  L.  (1 

(1860).  Dutch.)  633  (1856). 

^Weedv.  Beebe,  21Vt.495(1849).  ^  jyijus  v.   Dennis,   3  Johns.  Ch. 

See  Brooks  v.  Vermont  Cent.   R.  (N.   Y.)   367    (1818);    Houston    v. 

Co.,    14   Blatchf.    C.   C.  463,  473  Aycock,   ( 5     Sneed.  )    Tenn.     406 

(1878);  also  Goodman  v.  White,  26  (1858);  s.  c.  3  Am.  Dec.  131. 

Conn.  317,  320  (1857).  »  Mills  v.    Dennis,  3  Johns.   Ch. 

•Finlon  V.Clark,  118111.32(1886);  (N.   Y.)  367  (1818);    McClellan    v. 


932  STRIC  FORECLOSURE PRACTICE.    [§§  838-840. 

For  this  reason,  it  is  thought  that  instead  of  ever  seeking  a 
strict  foreclosure  of  a  mortgage  against  an  infant  heir  of  the 
mortgagor,  it  is  safer  to  obtain  a  decree  for  the  sale  of 
the  mortgaged  premises,  because  a  decree  of  sale  will  be 
binding  upon  the  infant  from  the  time  it  is  granted.* 

§  838.  Pleadings  in  a  strict  foreclosure. — In  an  action 
for  strict  foreclosure,  the  pleadings  and  practice  are  sub- 
stantially the  same  as  they  are  in  an  equitable  action  for 
foreclosure  and  sale."  The  specific  remedy  desired  should 
be  demanded  in  the  prayer  of  the  complaint ;  but  this  is  not 
indispensable,  because  in  an  action  for  foreclosure,  if  the 
complaint  is  drawn  in  the  ordinary  form,  and  it  appears  in 
the  progress  of  the  cause,  that  it  is  desirable,  a  sale  may  be 
ordered,  although  a  strict  foreclosure  may  be  prayed  for,  and 
vice  versa* 

%  839.  Judgment  in  a  strict  foreclosure. — The  judgment 
in  a  strict  foreclosure  should  require  the  persons  entitled 
to  redeem  to  do  so  within  a  specified  time ;  in  default  of 
such  redemption,  the  title  should  be  decreed  to  vest  abso- 
lutely in  the  plaintiff.*  Until  the  expiration  of  the  time 
limited  in  the  judgment  of  strict  foreclosure  for  the  payment 
of  the  mortgage  debt,  the  mortgage  will  not  be  foreclosed 
and  the  title  will  not  pass  to  the  plaintiff." 

§  840.  Time  for  redemption. — The  period  allowed  for 
redemption  should  be  fixed  by  the  court  in  the  exercise 
of  its  sound  discretion  ;*  it  may  be  enlarged  from  time  to 


McClellan,65Me.  508(1872);  Whit-  »  Sage  v.   McLaughlin,   34  Wis. 

ney  v.  Stearnes,  53  Mass.  (11  Mete.)  550  (1874). 

319(1846);  Coffin  V.  Heath,  47  Mass.  ■*  Kendall  v.   Treadwell,   5  Abb. 

(6  Mete.)  76   (1843) ;    Chandler    v.  (N.  Y.)  Pr.  16  (1857) ;  s.  c.  14  How. 

MeKinney,  6  Mich.  217  (1859) ;  s.  c.  (N.  Y.)  Pr.    165  ;  Waters   v.    Hub- 

74  Am.  Dec.  286  ;  Dow  v.  Jewell,  21  bard,   44  Conn.  340  (1877)  ;  Farrell 

N.    H.   470,  487  (1850);     Long  v.  v.  Parlier,  50  111.  274(1869).  See  Sage 

Mimford,  17  Ohio  St.  506(1867).  v.   Iowa  Cent.  R  Co.,  99  U.S.  fO 

'  Mills  V.   Dennis,   3  Johns.  Ch.  Otto),  334  (1878) ;  bk.  25  L.  ed.  394. 

(N.  Y.)  367  (1881)-.  5  Bolles  v.    Duff,   43  N.   Y.   469 

'  Kendall   v.    Treadwell,   5  Abb.  (1871). 

(N.  Y.)Pr.  16(1857)-  s    c.  14  How.  «  Bolles  v.    Duff.    43  N.   Y.    469 

(N.  Y.)  Pr.  165  (1871)  ;   Blanco  v.   Foole,  32  Barb. 


§  841.]  SETTING  ASIDE  STEICT  FOEECLOSUEE.  933 

time,  on  application,  and  on  satisfactory  reasons  being  shown 
therefor.*  The  time  usually  allowed  for  redemption  is  six 
months.* 

Courts  are  very  liberal  in  strict  foreclosures  in  extending 
and  enlarging,  from  time  to  time,  the  period  allowed  for 
redemption ;  but  in  actions  to  redeem,  such  leniency  is  not 
indulged,  and  the  party  seeking  redemption  is  required 
to  redeem  within  the  time  appointed.* 

§  841.  Setting  aside  and  opening  strict  foreclosure. — 
A  decree  of  strict  foreclosure  may  be  opened  and  set  aside 
the  same  as  a  decree  of  foreclosure  and  sale  in  an  equitable 
action,  and  for  many  of  the  same  causes.*  After  a  decree 
of  foreclosure  has  been  entered,  the  conduct  of  the  parties 
may  be  such  as  to  waive,  or  open  the  decree ;  as  by 
treating  the  debt  as  still  due,*  or  by  paying  a  part  of 
it,*  or  by  agreeing  that  the  foreclosure  shall  be  null  and 
void.' 

Usually,  the  opening  of  a  decree  of  strict  foreclosure 
depends  upon  equitable  considerations  affecting  the  rights 
of  the  parties,  and  not  upon  the  regularity  of  the  pro- 
ceedings.*   Where  a  mortgagee  supposed  that  he  had  made 


(N.  T.)  535  (1860) ;  Ferine  v.  Dunn,  Monkhouse  v.  Corporation  of  Bed- 

4  Johns.   Ch.   (N.  Y.)    140  (1819) ;  ford,  17  Ves.  380,  407  (1810). 

McKinstry  v,  Mervin,  3  Johns.  Ch.  •  Brinckerhoff  v.  Lansing,  4  Johns. 

(N.   Y.)  466  n  (1818) ;    Johnson  v.  Ch.   (N.   Y.)  65  (1819) ;  Ferine  v. 

Donnell,  15  111.  97  (1853) ;  Clark  v.  Dunn,    4  Johns.  Ch.   (N.   Y.)   140 

Reybum,   75   U.    S.   (8  Wall.)  318  (1819);    Harkins    v.    Forsyth,     11 

(1868)';  bk.  19  L.  ed.  354.  Leigh  (Va.)  294  (1840) ;  Chicago  & 

>  Ferine  v.  Dunn,  4  Johns.  Ch.  V.  Ft.  Co.  v.  Fosdick,    106    U.  S. 

(N.  Y.)  140  (1819) ;  Downing  v.  Fal-  ( 16  Otto ),   70  ( 1882 ) ;    bk.   27  L. 

mateer,  1  T.  B.  Mon.  (Ky.)  64,  66  ed.  55. 

(1824) ;  Quarles  v.  Knight,  8  Price,  *  See  ante  chap.  xxvi. 

630    (1820)  ;     Monkhouse    v.     Cor-  » Bissell  v.  Bosman,  2  Dev,   (N. 

poration  of  Bedford,   17  Ves.   380  C.)  Eq.  154  (1881). 

(1810).  «Gilson  v.  AVhitney,  51  Vt.  553 

'Ferine  V.  Dunn,  4  Johns.    Ch.  (1879);  Smalley  v.  Hickok,  12  Vt.  153 

(N.   Y.)  140  (1819) ;  McKinstry  v.  (1840) ;  Converse  v.  Cook,  8  Vt.  164 

Mervin,  3  Johns.  Ch.  (N.  Y.)  466  n  (1836). 

(1818) ;  Barnes  v,  Lee,  1  Bibb  (Ky.)  '  Griswold  v.  Mather,  5  Conn.  435 

526  (1809);  Harkins  v.  Forsyth,   11  (1825). 

Leigh  (Va.)  294  (1840);  Edwards  v.  «  Bridgeport   Sav.   Bank  v.   Eld- 

Cunliffe,  1  Madd.  Ch.    287  (1816) ;  redge,  28  Conn.  556  (1859). 


934  OPENING    STRICT    FORECLOSURE.  [§  841. 

a  valid  tender  within  the  time  limited,  which  was  not  good 
by  reason  of  some  informality,  the  decree  of  strict  foreclosure 
will  be  opened  ;*  and  if  the  failure  to  pay  the  amount  directed 
to  be  paid,  within  the  time  allowed,  is  due  to  overtures  for 
a  settlement  made  by  the  plaintiff,  the  decree  of  foreclosure 
will  be  opened.'  Where  a  mortgagor  who  had  paid  part  of 
the  mortgage  debt,  was  prevented  by  an  unavoidable  calam- 
ity, from  paying  the  balance,  until  a  short  time  after  the  day 
designated  for  such  payment,  when  he  tendered  the  amount 
due,  the  foreclosure  was  opened.* 

Where  proper  service  has  not  been  made  on  the  defen- 
dants, a  strict  foreclosure  may  be  set  aside  on  application.* 
In  making  an  application,  the  party  must  tender  the  mort- 
gage debt,  or  show  his  readiness  to  pay  it,  in  order  to  secure 
the  relief  desired.' 


'  Crane  v.  Hanks,  1  Root  (Conn.)         «  Fall  v.  Evans,  20  Ind.  910  (1S63); 
468  (1792).  Mitchell  v.  Gray,  18  Ind.  223  (1862). 

»  Pierson  v.Clayes,  15  Vt.  93(1843).  *  Hatcli  v.  Garza,  7  Tex.  CO  UbSij. 

»  Crane  v.  Hanks,  1  Root  (Conn.) 
468  (1793). 


CHAPTER  XXXVI. 


FEES,    COSTS  AND  DISBURSEMENTS. 


FEES  OF  REFEREE  SELLING— COSTS  IN  GENERAL— WHEN  DISCRETION- 
ARY—WHO MAY  HAVE— PRIOR  AND  JUNIOR  LIENORS-GUARDIAN 
AD  ilTBJir— STIPULATION   FOR  COUNSEL  FEE  —  STATUTORY 
FORECLOSURE-COSTS   IN   DISTRIBUTING   SURPLUS. 


;  842.  Fees  of    officer    conducting 
sale. 

843.  Fees   of   such   officer   statu- 

tory. 

844.  Appral  from  ^r<ier  fixing  fees 

of  referee  to  sell. 

845.  Costs  in  general. 

846.  Costs  in  equitable  actions  to 

foreclose. 

847.  Costs    where    guarantor    of 

mortgage  deceased. 

848.  Costs  of  foreclosure  in  discre- 

tion of  court. 

849.  Costs  under  New  York  Code 

of  Civil  Procedure. 

850.  Exceptions  to  discretion   of 

court  in  allowing  costs. 

851.  Who  may  recover  costs. 

852.  Prior  mortgagee  entitled  to 

costs. 

853.  Costs  to  subsequent  incum- 

brancers. 

854.  Costs    on    two    foreclosures 

against  same  property. 

855.  When  costs  not  allowed  to 

mortgagee. 

856.  When  costs  not  allowed  to 

defendants. 

857.  Notice      of      no      personal 

claim. 

858.  Effect  of  excessive  demand 

in  the  complaint. 

859.  Effect  of  tender  after  action 

brought. 

860.  Costs  on  default. 

861.  Costs   allowed    guardian  ad 

Idem. 

862.  Costs     on     appointment     of 

receiver. 


!  863.  Costs  on  resale. 

864.  Who    personally    liable    for 

costs. 

865.  Out  of  what  fund  costs  pay- 

able. 

866.  Counsel    fee   in    foreclosing 

a  mortgage. 

867.  Couns^cl    fee    in    Kentucky 

and  Michigan. 

868.  Stipulation  for  attorney's  fee 

— W-heu  usurious. 

869.  Allowance  of  attorney's  fee 

— Discretion  of  court. 

870.  Allowance  of  attorney's  fee  a 

matter  of  contract  or  .-itatute. 

871.  Enforcement  of  counsel  fee 

against  purchaser. 

872.  Allegation  as  to  counsel  fee. 

873.  When     attorney's    fee     not 

allowed. 

874.  Costs  on  redeeming. 

875.  Foreclosure  under    power — 

Mortgagee's    compensation. 
878.  Expenses  and  disbursements 
of  trustee. 

877.  Taxing  costs  and   disburse- 

ments   on    foreclosure    by 
advertisement. 

878.  What  disbursements  allowed. 

879.  Who  may  require   taxation 

of  costs  and  disbursements. 

880.  Costs    in    surplus    proceed- 

ings. 

881.  Who  entitled  to  costs  in  sur- 

plus proceedings. 
88.?.  Who  chargeable  with  costs 

in  surplus  proceedings. 
883.  Disbursements  in  surplus pro- 

ceediugs. 


935 


936  FEES    OF    EEFEREE    SELLESTG.     [§§  842-843. 

§  842.  Fees  of  officer  conducting  sale. — The  New  York 
Code  of  Civil  Procedure  provides,'  that  "the  fees  of  a  referee 
appointed  to  sell  real  property  pursuant  to  a  judgment  in  an 
action,  are  the  same  as  those  allowed  to  the  sheriff  ;  and  he 
is  also  allowed  the  same  disbursements  as  the  sheriff.* 
Where  a  referee  is  required  to  take  security  upon  a  sale,  or 
to  distribute,  or  apply,  or  ascertain  and  report  upon  the  dis- 
tribution or  application  of,  any  of  the  proceeds  of  the  sale, 
he  is  also  entitled  to  one-half  of  the  commissions  upon  the 
amount  so  secured,  distributed,  or  applied,  allowed  by  law  to 
an  executor  or  administrator  for  receiving  and  paying  out 
money.  But  commissions  shall  not  be  allowed  to  him  upon 
a  sum  bidden  by  a  party,  and  applied  upon  that  party's 
demand,  as  fixed  by  the  judgment,  without  being  paid  to 
the  referee.  And  a  referee's  compensation,  including  com- 
missions, can  not,  where  the  sale  is  under  a  judgment,  in  an 
action  to  foreclose  a  mortgage,  exceed  fifty  dollars,  or  in  any 
other  case  five  hundred  dollars."* 

§  843.  Fees  of  such  officer  statutory. — It  has  always 
been  the  policy  of  the  law  to  prescribe  and  fix  the  compen- 
sation which  may  be  demanded  for  the  performance  of  legal 
duties  by  public  ofifiicers.  And  where  no  provision  is  made, 
either  directly  or  indirectly,  no  fees  can  be  lawfully  demanded. 
Costs  and  fees  are  recoverable  by  virtue  of  statutory  author- 
ity only,  and  where  no  such  authority  exists,  no  claim  for 
their  recovery  can  be  maintained.* 

■^.     .  . 

»  N.  T.  Code  Civ.  Proc.  §  3297.  s.  c.  1  Hun  (N.  T.)  818.     The  act 

'  As  to  the  fees  allowed  to  a  sheriff,  (chap.  569,  Laws  1869,  as  amended 

see  N.  T.  Code  Civ.  Proc.  §  3307.  by  chap.  193,  Laws  1874)  in  relation 

« N.  Y.  Code  Civ.  Proc.  §  3297.  to  the  fees  of  sheriffs  and  referees, 

Race   v.  Gilbert,    1C3    N.   Y.    298  on  foreclosure  sales  in  the  city  and 

(1886) ;  Schermerhorn  v.  Prouty,  80  county    of    New    York,    was    not 

N.   Y.   317  (1880) ;  s.  c.  21  Alb.  L.  repealed  by  the  amendment  of  1876 

J.  275  ;  Maher  v.  O'Conner,  61  How.  to  §  309  of  the  Code  of  Procedure, 

(iSr.  Y.)  Pr.  103  (1881) ;  Walbridge  v.  which  limits  the  sum  to  be  allowed 

James,  16  Hun  (N.  Y.)  8  (1878).   See  as  fees  on  such  a  sale.     The  amend- 

Daby  v.  Jacot,  2  Abb.  (N.Y.)  N.  C.  ment  simply  modifies  the  act  by  fix- 

97  (1877);  Richards  v.  Richards,  2  ing  the  maximum  of  fees,  leaving  the 

Abb.  (N.  Y.)  N.  C.  93  (1875)  ;  Innes  scale  of  charges  up  to  that  limif  as 

V.  Purcel],2T.«&C.(N.Y.)538(1874);  fixed  by  saidW     Schermerhorn  v. 


§§  844-845.]  FEES  OE  keeeree  statdtoet.  937 

A  referee  is  entitled  to  receive  only  the  same  fees  for 
selling  real  estate,  as  are  allowed  by  law  to  a  sheriff ;'  he 
can  recover  for  such  services  no  more  than  the  fees  pre- 
scribed by  statute,  although  there  may  be  an  express 
agreement  between  the  parties  to  pay  a  larger  sum.'  No 
fees  can  be  allowed  to  an  auctioneer  for  services  upon  the 
adjournment  of  a  sale  by  a  referee.* 

It  has  been  held,  in  the  case  of  Lockwood  v.  Fox,*  that 
chapter  569,  of  the  laws  of  1869,  as  amended  by  chapter  192, 
of  the  laws  of  1874,  not  having  been  repealed,  is  by  virtue 
of  section  3308  of  the  Code  of  Civil  Procedure,  still  in  force, 
and  that  the  fees  of  a  referee  to  sell,  on  a  foreclosure  in  the 
city  and  county  of  New  York,  must  be  taxed  thereunder. 

§  844.  Appeal  from  order  fixing  fees  of  referee  to  sell. 
— Under  section  1296  of  the  Code,  a  referee  appointed 
to  sell  real  estate  in  pursuance  of  a  judgment,  may  aj  p  al 
from  an  order-  fixing  his  fees  and  compensation.*  An 
order  making  an  allowance  to  a  referee  appointed  to  con- 
duct the  sale  under  a  decree  of  foreclosure,  which  charges 
the  owner  of  the  equity  of  redemption  with  the  payment  of 
a  definite  sum  of  money,  which  is  greater  than  he  or  his 
property  can  lawfully  be  charged  with,  affects  a  substantial 
right,  and  is  appealable  when  made  in  a  summary  applica- 
tion for  judgment/ 

§  845.  Costs  in  general. — In  actions  at  law,  the  rule 
seems  to  be  well  settled,  both  in  England  and  in  this 
country,   that   the   prevailing   party   is   entitled   to    costs. 


Prouty,   80  N.  Y.  317  (1880) ;  s.  c.  »  Ward  v.  James,   8  Udn  (N.  T.) 

21  Alb.  L.  J.  275.  526  (1876). 

*  Innes  v.  PurceU,  2  T.  &  C.  (N.  *  1   N.   T.   Civ.   Proc.   Rep.  407 

T.)  538,  539  (1874) ;  s.  c.  1  Hun  (N.  (1881). 

Y.)  318.     See  Downing  v.  Marshall,  «  Hobart  v.  Hobart,  23  Hun  (N. 

87  N.  Y.  380  (1867).  Y.)  484  (1881). 

>  Ward  V.  James,  8  Hun  (N.  Y.)  « Innes  v.  Purcell,  2  T.  &  C.  (N. 

526  (1876) ;  Innes  v.  Purcell,  2  T.  &  Y.)  538  (1874) ;  s.  c.  1  Hun  (N.  Y.) 

C.  (N.  Y.)  538  (1874) ;  s.  c.  1  Hun  318.     See    People    v.    New    York 

(N.  Y.)  318;  K  Y.  Code  Civ.  Proc.  Cent.  R.   Co.,  29  N.   Y.   418,  423 

§  2397.  (1864). 

'Brady  v.   Kingsland,   5  N.   Y. 
Civ.  Proc.  Rep.  413  (1884). 


938 


COSTS   IN   GEIOIRAL. 


[§  845. 


although  he  may  recover  only  a  part  of  his  demand ;  this 
rule  has  been  established  by  statute  in  many  states.'  A 
debtor  may,  however,  by  offering  to  confess  judgment  for  a 
certain  amount,  become  entitled  to  costs  accruing  subse- 
quently to  his  offer,  provided  his  creditor  fails  to  recover 
more  than  the  amount  offered.* 

In  suits  in  equity,  however,  the  allowance,  or  disallowance, 
of  costs  depends  largely  on  the  circumstances  of  each 
particular  case,  and  rests  entirely  within  the  discretion  of  the 
court,  to  be  exercised  upon  equitable  principles  and  with 
reference  to  the  general  rules  of  practice.  Prima  facie,  th.Q 
successful  party  is  entitled  to  costs,  and  it  is  incumbent 
upon  the  defeated  party,  if  there  are  just  reasons  why  he 
should  not  pay  a  bill  of  costs,  to  show  such  circumstances 
as  would  overcome  the  presumptive  right  of  the  successful 
party  ;  if  it  is  shown  that  it  would  be  unjust  to  compel 
the  defeated  party  to  pay  costs,  the  court  may,  in  the 
exercise  of  its  sound  discretion,  refuse  costs  to  either 
party,  or  it  may  even  impose  them  upon  the  successful 
party.* 


'  Wood  V.  Brown,  6  Daly  (N.  Y.) 
428  (1876) ;  St.  Charles  v.  O'Mailey, 
18  111.  407  (1857);  Brandies  v. 
Stewart,  1  Met.  (Ky.)  395  (1858); 
Underwood  v.  Lacapere,  14  La.  An. 
274  (1859);  Wall  v.  Covington,  76 
N.  C.  150  (1877) ;  Little  v.  Lockman, 
5  Jones  (N.  C.)  L.  433  (1858); 
McReynolds  v.  Gates,  7  Humph. 
(Tenn.)29(1846). 

»  Bathgate  v.  Haskin,  63  N.  T. 
261  (1875) ;  O'Conner  v.  Arnold,  53 
Ind.  203  (1876) ;  Rucker  v.  Howard, 
2  Bibb  (Ky.  )  166,  169  (1810); 
Building  Assoc,  v.  Crump,  42  Md. 
192  (1874) ;  Holden  v.  Kynaston,  2 
Beav.  204,  206  (1840). 

» Eldridge  v.  Strenz,  39  N.  Y. 
Supr.  Ct.  (7  J.  &  S.)  295  (1875); 
Belmont  v.  Ponvert,  38  N.  Y.  Supr. 
Ct.  (6  J.  &  S.)  425  (1874) ;  Robinson 
V.  Cropsey,  2  Edw.  Ch.  (IST.  Y.)  138 
(1833) ;  Travis  v.  Waters,  12  Johns. 


(N.  Y.)  500  (1815) ;  Glen  v.  Fisher, 
6  Johns.  Ch.  (N.  Y.)  33  (1823) ;  s.  c. 
10  Am.  Dec.  310 ;  Methodist  Church 
V.  Jaques,  1  Johns.  Ch.  (N.  Y.)  65 
(1814) ;  Gray  v.  Gray,  15  Ala.  779 
(1849) ;  Temple  v.  Lawson,  19  Ark. 
148  (1857);  Cowles  v.  Whitman,  10 
Conn.  121  (1834) ;  s.  c.  25  Am.  Dec. 
60;  Pearce  v.  Chastain,  3  Ga.  226 
(1847);  s.  0.  46  Am.  Dec.  423; 
McArtee  v.  Engart,  13111.  242(1851); 
Frisby  v.  Ballance,  5  111.  (4  Scam.) 
287  (1843)  ;  s.  c.  39  Am.  Dec.  409  ; 
Stone  V.  Locke,  48  Me.  425  (1861) ; 
Lee  V.  Pindle,  12  Gill.  &  J. 
(Md.)  288  (1842) ;  Clark  v.  Reed,  28 
Mass.  (11  Pick.)  449  (1831);  Car- 
penter V.  Easton  &  A.  R.  R.  Co.,  28 
N.  J.  Eq.  (1  Stew.)  390  (1877); 
Decker  v.  Caskey,  3  K  J.  Eq.  (2  H. 
W.  Gr.)  446  (1836');  Hess  v.  Beates,  78 
Pa.  St.  429(1875);  Massing  v.  Ames, 
38  Wis.    285  (1875);    Pennsylvania 


§  846.]  COSTS  IN   GENERAL.  939 

In  Clark  v.  Reed,*  Putman,  J.,  in  delivering  the  opinion 
of  the  court,  stated  the  general  practice  in  equity,  with  his 
usual  accuracy,  as  follows :  "  We  adopt  the  general  rule,  that 
the  prevailing  party  is  to  have  costs,  as  applicable  to  suits  in 
equity  as  well  as  at  law.  It  will  be  applied,  unless  the  losing 
party  can  show  that  equity  requires  a  different  judgment.  If 
it  should  appear  that  the  plaintiff  had  good  reason  to  think 
the  respondent  was  liable  upon  equitable  principles  to  pay 
money,  to  perform  specific  contracts,  or  to  make  discovery, 
and  it  should,  upon  hearing  of  the  answer,  appear  that  no 
such  cause  existed,  as  the  plaintiff  had  reason  to  suppose 
did  exist,  the  court  would  not  award  costs  against  him,  if  it 
appeared  that  the  respondent  was  in  such  a  situation  as  to 
render  it  probable  that  he  was  amenable  to  the  call  of  the 
plaintiff  upon  equitable  principles.  On  the  other  hand,  if  it 
should  appear  that  the  plaintiff  knew  the  whole  ground  and 
made  a  claim  in  equity,  which  was  successfully  resisted  by 
the  respondent,  it  would  seem  that  costs  should  be  allowed 
as  well  in  equity  as  at  law.  The  mere  change  of  the  forum 
should  not  in  reason  make  any  difference  in  the  question  of 
costs." 

§  846.  Costs  in  equitable  actions  to  foreclose. — ^The 
mortgagee  in  a  foreclosure,  like  the  plaintiff  in  other  actions, 
is  generally  entitled  to  a  bill  of  costs,  if  he  prevails  and  obtains 
a  decree  of  sale.*  But  all  costs  and  fees  are,  as  a  rule,  statu- 
tory ;'  and  where  no  statutory  right  to  charge  or  allow  them 
exists,  no  legal  or  equitable  right  to  do  so  can  be  presumed.* 

Where  the  facts  alleged  and  proved  entitle  the  plaintiff  to 
costs,  a  judgment  rendered  for  costs  will  not  be  reversed 


V.    Wheeling    &   Belmont    Bridge  (1859);   s.  0.  73  Am.    Dec.    393; 

Company,  59  U.  S.  (18  How.)  421  Wetherell  v.  Collins,  3  Madd.  255 

(1855) ;  bk.  15  L.  ed.  435  ;  Brooks  (1818) ;  Bartle  v.  Wilkin,  8  Sim.  288 

V.  Byam,  2  Story  C.  C.  553  (1843);  (1836);  Loftus  v.  Swift,  2  Sch.  & 

Hunter  v.  Marlboro,  2  Woodb.  &  Lef.  642  (1806). 

Min,  C.  C.  168  (1846) ;  Vancouver  v.  '  Ward  v.  James,  8  Hun  (N.  Y.) 

Bliss.  11  Ves.  463  (1805).  526  (1876). 

'  28  Mass.  (11  Pick.)  449  (1831).  *  Ward  v.  James,  8  Hun  (N.  Y.) 

^  Benedict  v.  Gilman,  4  Paige  Ch.  526    (1876).     See  Downing  v.  Mar- 

(N.    Y.)    58    (1833) ;    Concklin    v.  shall,  37  N.  Y.  380  (1867) ;  s.  c.  80 

Coddington,  12N.J.  Eq.(lBeas.)250  Am.  Dec.  290;  Innes  v.  Purcell,  2 


940  COSTS    IN    EQUITABLE   ACTIONS.     [§§  847-848. 

or  set  aside  merely  because  the  plaintiff  did  not  ask  for 
costs  in  his  complaint  ;*  the  established  practice,  however, 
requires  the  successful  party  to  apply  by  motion  for  his 
costs,  or  to  demand  them  in  some  manner.*  And  where  the 
court  of  appeals  reverses  a  judgment,  "  with  costs  to  abide 
the  event,"  the  party  who  finally  succeeds  can  recover  costs 
for  all  the  different  steps  in  the  action.' 

In  the  case  of  Bockes  v.  Hathorn,*  it  was  held  that  where 
an  action  on  a  bond  and  to  foreclose  a  mortgage  collateral 
thereto,  is  difficult  and  unusual,  on  account  of  a  defence  and 
trial,  an  additional  allowance,  not  exceeding  five  per  centum 
of  the  recovery,  nor  $2,000  in  the  aggregate,  may  be  granted 
to  any  party. 

§  847.    Costs  where  guarantor  of  mortgage  deceased. 

— In  proceedings  to  sell  the  real  estate  of  a  deceased 
guarantor  of  a  mortgage,  the  costs  of  foreclosure  can  not  be 
considered  as  a  part  of  the  debt,  yet  as  they  are  incidental 
to  the  endeavor  to  collect  the  same  out  of  the  premises,  the 
amount  to  be  credited  on  the  debt  is  the  proceeds  realized 
from  the  foreclosure,  after  deducting  the  costs.*  A  surety 
has  no  equity  to  demand  that  so  much  money  as  is 
necessary  to  pay  the  costs  of  collection,  shall  be  withheld 
from  that  object  and  applied  exclusively  to  satisfy  the  prin- 
cipal of  the  debt,  for  as  the  creditor  is  entitled  to  the 
whole  amount,  the  expenses  of  collection  are  properly 
deductible  from  the  sum  realized  from  the  principal  debtor. 

§  848.    Costs  of  foreclosure  in  discretion  of  court. — 

The  allowance  of  costs  in  actions  in  equity  is  always  in  the 


T.  &  C.  (N.  Y.)  538  (1874) ;  8.  c.  1  Nat.  Bank  of  New  York,  84N.  Y.  169 

Hun  (N.  Y.)  318.  (1881) ;  Donovan  v.  Vandermark,  22 

'  Hees  V.  Nellis,  1  T.  &  C.  (N.  Y.)  Hun  (N.  Y.)  307  (1880) ;  Saunders  v. 

118,  131  (1873).  Townshend,  63  How.  (N.  Y.)  Pr. 

"  Chase  v.  Miser,  67  Barb.  (N.  Y.)  343  (1883). 

441,  443  (1875) ;  Lanz  v.  Trout,  46  *  17  Hun  (N.  Y.)  87  (1879),  distin- 

How.  (N.Y.)Pr.  94(1873).    See  Gray  guishing  Hunt  v.  Chapman,  63  N. 

V.  Hannah,  3  Abb.  (N.  Y.)  Pr.  N.  Y.   333  (1875) ;    N.  Y.  Code  Civ. 

S.  183  (1867).  Proc.  §§  3353,  3353. 

«  Newcomb  v.  Hale,  4  N.  Y.  Civ.  «  Hurd  v.   Callahan,  9  Abb.  (N. 

Proc.  Rep.  35,  37  (1883).  '  See  First  Y.)  N.  C.  374  (1881). 
Nat.  Bank  of  MeadvilJe  v.  Fourth 


§  848.] 


COSTS   DISCRETIONARY. 


941 


discretion  of  the  trial  court,'  but  the  discretion  to  be 
exercised  must  be  a  reasonable  and  sound  one.*  Their 
allowance,  or  disallowance,  will  always  depend  largely  on  the 
facts  and  circumstances  of  each  particular  case,  and  the  dis- 
cretion of  the  court  is  to  be  exercised  without  reference  to 
the  general  rules  of  practice,  but  as  equity  may  require.' 
Such  discretion  will  not  be  interfered  with  by  an  appellate 
court,  except  in  cases  of  open  abuse  or  gross  error,  or 
where  it  is  exercised  in  disregard  of  recognized  equitable 
principles.* 

The  matter  of  costs,  in  the  several  states,  depends  very 
much  upon  their  statutes  and  practice,  which  are  quite 
dissimilar.     But  as  foreclosures  are  equitable  actions  in  most 


>  Garr  v.  Bright,  1  Barb.  Ch.  (N. 
Y.)  157  (1845) ;  Methodist  Episcopal 
Church  V.  Jaques,  1  Johns.  Ch.  (N. 
Y.)  65  (1814) ;  Lyman  v.  Lyman,  2 
Paine  C.  C.  53  (1829).  See  Mackey 
V.  Cairns,  5  Cow.  (N.  Y.)  575,  586 
(1825);  8.  c.  15  Am.  Dec.  477; 
Demarest  v.  Wynkoop,  3  Johns, 
Ch.  (N.  Y.)  129  (1817) ;  8.  c.  8  Am. 
Dec.  467;  Pendelton  v.  Eaton,  3 
Johns.  Ch.  (N.  Y.)  69  (1817) ;  Mur- 
ray V.  Ballou,  1  Johns.  Ch.  (N.  Y.) 
566  (1815);  Traris  v.  Waters,  1 
Johns.  Ch.  (N.  Y.)  89  (1814) ;  NicoU 
V.  Trustees  of  Huntington,  1  Johns. 
Ch.  (N.  Y.)  166  (1814);  Cunning- 
ham V.  Freeborn,  11  Wend.  (N.  Y.) 
258  (1833) ;  Pearce  v.  Chastain,  3 
Ga.  226  (1847) ;  a  c.  46  Am.  Dec. 
423;  The  Martha,  Blatchf.  &  How. 
D.  C.  169  (1830). 

» Eastburn  v.  Kirk,  2  Johns.  Ch. 
(N.  Y.)  317  (1817).  See  Law  v. 
McDonald,  9  Hun  (K  Y.)  23  (1876). 

'  Prima  facie,  the  prevailing  party 
is  entitled  to  costs,  and  it  devolves 
upon  the  defeated  party  to  overcome 
such  presumptive  right.  See  Atkin- 
son y.  Manks,  1  Cow.  (N.  Y. ) 
691  (1823);  Canfleld  v.  Morgan, 
1   Hopk.  Ch.  (N.  Y.)    224   (1824); 


Aymer  v.  Gault,  2  Paige  Ch.  (N.  Y.) 
284  (1830);  Badeau  v.  Rogers,  3 
Paige  Ch.  (N.  Y.)  209  (1830) ;  Gray 
V.  Gray,  15  Ala.  779  (1849) ;  Temple 
V.  Lawson,  19  Ark.  148  (1857); 
Cowles  v.  Whitman,  10  Conn.  121 
(1834)  ;  8.  c.  25  Am.  Dec.  60 ; 
McArtee  v.  Engart,  13  El.  243 
(1851) ;  Frisby  v.  Ballance,  5  111.  (4 
Scam.)  287  (1843);  8.  C.  34  Am. 
Dec.  409 ;  Clark  v.  Reed,  28  Mass. 
(11  Pick.)  449  (1831) ;  Saunders  v. 
Frost,  22  Mass.  (5  Pick.)  259  (1827) ; 
8.  c.  16  Am.  Dec.  395 ;  Farley  v. 
Blood,  30  N.  H.  354  (1854) ;  Carpen- 
ter v.  Easton  &  A.  R.  Co.,  28  N.  J. 
Eq.  (1  Stew.)  392  (1877) ;  Decker  v. 
Caskey,  3  N.  J.  Eq.  (2  H.  W.  Gr.) 
446  (1836) ;  Hess  v.  Beates,  78  Pa. 
St.  429  (1875) ;  Manchester  P.  W. 
V.  Stimpson,  2  R.  I.  415  (1853); 
Pennsylvania  v.  Wheeling  «&  B.  B. 
Co.,  59  U.  S.  (18  How.)  421  (1855) ; 
bk.  15  L.  ed.  435  ;  Spring  v.  South 
Carolina  Ins.  Co.,  21  U.  S.  (8 
Wheat.)  268  (1823);  bk.  5  L.  ed.  614; 
Hunter  v.  Marlboro,  2  Woodb.  «fc 
Min.  C.  C.  168  (1846);  Aldrich  v 
Thompson,  2  Bro.  Ch.  149  (1787). 

*  Morris  v.  Wheeler,  45  N.  Y.  708 
(1871);    Barker  v.    White,    1   Abb. 


942  COSTS  IN   NEW   YORK.  [§§  849-S50. 

states,  the  costs  are  generally  within  the  discretion  of  the 
court.'  And,  although  there  is  no  fixed  rule  for  granting 
costs,  as  in  courts  of  law,  courts  of  equity  rarely,  if  ever, 
refuse  to  allow  them.' 

§  849.     Costs  under  New  York  Code  of  Civil  Procedure. 

— In  New  York,  the  allowance  of  costs  in  equity  cases 
stands  on  the  same  footing  now  that  it  did  before  the 
enactment  of  the  Code  of  Civil  Procedure.'  The  rules 
governing  costs  apply  to  actions  for  strict  foreclosure,  as 
well  as  to  equitable  actions  for  a  decree  of  foreclosure  and 
sale.* 

Where  the  action  is  tried  before  a  referee,  the  referee 
takes  the  place  of  the  court,  and  the  question  of  costs  is  a 
matter  resting  in  his  sound  discretion.'  If  his  discretion  is 
honestly  exercised,*  it  can  be  interfered  with  only  by  an 
appeal  from  the  judgment.^ 

§  850.  Exceptions  to  discretion  of  court  in  allowing 
costs. — Where  a  party  to  a  foreclosure  is  dissatisfied  with 
the   costs  allowed   by  a  trial   court,  his  only  method    for 


App.  Dec.  (N.  y.)  95  (1867) ;  House  (1859) ;   Church  v.  Kidd,  3  Hun  (N". 

V.  Eisenlord,  30  Hun  (N.  Y.)  90,  93  Y.)  254  (1874).     See  N.    Y.    Code 

(1883).  Civ.  Proc.  §§  3228,  3229,  3230. 

»  Garr  v.  Bright,  1  Barb.  Ch.  (N.  *  O'Hara  v.  Brophy,  42  How.  (N. 

Y.)  157  (1845) ;  O'Hara  v.  Brophy,  Y.)  Pr.  379  (1863).     See  Bartow  v. 

24  How.   (N.    Y.)  Pr.   379  (1863) ;  Cleveland,  7  Abb.  (N.  Y.)  Pr.  339 

Bartow  v.  Cleveland,  16  How.  (N.  (1858);  s.  c.  16  How.  (X.  Y.)  Pr. 

Y.)  Pr.  364  (1858) ;  8.  c.  7  Abb.  (N.  364. 

Y.)  Pr.  339  ;  Pratt  v.  Ramsdell,  16  *  Graves    v.    Blanchard,    3    N. 

How.  (N.  Y.)  Pr.  59  (1858) ;   s.  c.  7  Y.    Code  Rep.    25  (1850) ;    6.    c.   4 

Abb.  (N.  Y.)  Pr.  340  n  ;  Lessee  v.  How.   (N.   Y.)  Pr.    300 ;    Pratt    v. 

EUifl,   13  Hun  (N.  Y.)    655  (1878);  Styles,   9    Abb.    (N.    Y.)    Pr.    150 

Gallagher  v.  Eg.an,  2  Sandf.  (N.  Y.)  (1859) ;    s.  c.  17  How.  (N.  Y.)  Pr. 

742  (1850).  211 ;  Ludington  v.   Taft,  10  Barb. 

«  Garr  v.  Bright,  1  Barb.  Ch.  (N.  (N.  Y.)  447  (1857);  Couch  v.  Millard, 

Y.)  157  (1845) ;  Eastburn  v.  Kirk,  3  3  How.  (N.  Y.)  Pr.  N.  S.  22  (1885) ; 

Johns.    Ch.    (N.    Y.)    317    (1817)  ;  Lossee  v.  Ellis,  13  Hun  (N.  Y.)  655 

Stevens  v.  Veriaue,  2  Lans.  (N.  Y.)  (1878) ;  Law  v.   McDonald,  9  Hun 

90  (1870).  (N.  Y.)  23  (1876). 

3  Law  v.  McDonald,  9  Hun  (N.Y.)  «  Taylor  v.  Root,  48  N.  Y.  687 

23    (1876).      See  Phelps  v.  Woods,  (1872). 

46  How.  (N.  Y.)  Pr.  1  (1873) ;  Pratt  '  Lossee  v.  Ellis,  13  Hun  (N.  Y.) 

v.  Stiles,  17  How.  (N.  Y.)  Pr.  211  655  (1878). 


§  851.]  WHO   MAY  EECOVEE   COSTS.  943 

obtaining  relief  is  to  challenge  the  finding  as  to  costs  by  an 
exception  and  an  appeal  from  the  judgment/  Where  a 
trial  court  allows  costs  under  a  mistaken  idea  of  the  law,  it 
is  the  duty  of  the  appellate  court  to  correct  the  error." 

In  New  York,  the  discretion  of  the  trial  judge  in  an  action 
to  foreclose  a  mortgage  will  not  be  interfered  with  on 
appeal  to  the  general  term,  except  in  cases  of  abuse  or 
gross  error,  in  which  recognized  equities  and  rights  were 
disregarded.* 

§  851.  Who  may  recover  costs. — A  judgment  for  costs 
may  be  entered  in  favor  of  any  party  to  the  action,*  As  a 
general  rule,  the  mortgagee  is  entitled  to  his  costs  of  the  suit, 
whether  he  is  plaintiff  or  defendant.*  If,  however,  he  has 
been  guilty  of  improper  conduct,  the  court  may  not  only 
refuse  him  costs,  but  may  compel  him  to  pay  the  costs  of 
the  action."  Thus,  if  the  action  was  occasioned  by  the 
unreasonable  or  fraudulent  conduct  of  the  mortgagee,  he  will 
be  liable  for  its  costs.^ 

All  defendants,  who  properly  appear  and  answer,  are 
entitled  to  their  costs,  as  a  rule.  But  where  several 
defendants  have  the  same  solicitor,  they  will  not  be  allowed 
to  swell  the  costs  by  filing  separate  answers.*  This  rule  is 
different  in  New  York,  where  the  plaintiff  alone  can  tax  a 
bill  of  costs  against  the  mortgaged  premises. 


>  Rosa  V.  Jenkins,  31  Hun  (N.  Y.)  Young,  17  N.  J.  Eq.  (2  C.  E.  Gr.) 

384  (1884) ;  Woodford  v.  Bucklin,  161  (1864). 

14  Hun  (K  Y.)  444  (1878).  «  Pratt    v.    Stiles,    9   Abb.    (N 

«  Morris  v.  Wheeler,  45  N.  Y.  708  Y.)  Pr.  150  (1858) ;  s.  c.  17  How. 

(1871).  (N.   Y.)   Pr.    211;    Large  v.  Van 

»  House  V.  Eisenlord,  30  Hun  (N.  Doren,  14  N.  J.  Eq.  (1  McCart.)  208 

Y.)  90  (1883).     See  ante  %  848.  (1862) ;  Concklin  v.  Coddington,  13 

«  Garr    v.    Bright,    1  Bfjb.    Ch.  N.  J.  Eq.  (1  Beas.)  250  (1857) ;  s.  c. 

(N.  Y.)  257  (1845).  72  Am.  Dec.  893 ;  DetiUin  v.  Gale, 

»  Concklin  v.   Coddington,  12  N.  7  Ves.  583  (1802).     Compare,  Bath- 

J.   Eq.   (1    Beas.)    250    (1857) ;    8.  gate  v.  Haskin,  63  N.  Y.  261  (1875). 

c.   72  Am.    Dec.   393.     See    Hurd  '  Saunders  v.  Frost,  22  Mass.    (5 

V.    Callahan,  9   Abb.   (K   Y. )  N.  Pick.)  259  (1827) ;  s.  c.  16  Am.  Dec. 

C.    374  (1881) ;    Berlin  Building  &  394. 

L.  Assoc.  V.  Clifford,  30  N.  J.  Eq.  *  Danbury  v.  Robinson,  14  N.  J. 

(3    Stew.)    482.(1879);    Young    v.  Eq.  (1  McCart.)  324  (1862). 


944  COSTS  TO  JUNIOR  LIENORS.      [S§  852-853. 

§852.  Prior  mortgagee  entitled  to  costs.— A  prior 
mortgagee,  who  has  been  properly  made  a  defendant  for  the 
purpose  of  having  the  amount  of  his  claim  ascertained,  is 
entitled  to  a  bill  of  costs/  and  the  same  is  true  where  such 
mortgagee  has  been  improperly  joined  as  a  party  to  the 
action.  In  the  first  case,  he  is  entitled  to  have  his  costs 
paid  out  of  the  property,  and  in  the  latter,  to  have  them 
taxed  against  the  plaintiff  personally.' 

Where  a  prior  mortgagee  is  made  a  party  to  an  action  for 
foreclosure,  brought  by  a  second  mortgagee,  he  is  entitled 
to  have  his  taxable  costs  first  paid  out  of  the  proceeds  of 
the  sale,  and  if  the  second  mortgagee  wishes  to  save  such 
costs,  he  must  tender  the  prior  mortgagee  the  amount  due 
on  his  mortgage.*  Such  a  prior  mortgagee  will  not  forfeit 
his  right  to  costs  by  setting  up  in  his  answer,  in  addition 
to  his  mortgage,  an  interest  in  the  premises  acquired  under 
a  tax  sale,  even  if  such  claim  is  decided  against  him.* 

But  it  is  thought,  that  if  such  prior  mortgagee  puts  in  an 
answer  and  compels  the  plaintiff  to  prove  his  case,  and 
thereby  unnecessarily  increases  the  costs,  where  the  right 
of  such  mortgagee  might  have  been  properly  protected  by 
an  appearance  on  the  reference  to  compute  the  amount 
due,  he  will  not  only  be  denied  his  costs,  but  may  properly 
be  called  upon  to  pay  the  costs  consequent  upon  such 
conduct.* 

§  853.  Costs  to  subsequent  incumbrancers. — A  subse- 
quent incumbrancer  was  formerly  entitled  to  a  bill  of  costs  in 
a  mortgage  foreclosure.*     But,  if  subsequent  incumbrancers 


*  Boyd  V.   Dodge,  10  Paige   Ch.  *  Concklin  v.  Coddington,  12  N. 

(N.    Y.)   42   (1843);    Vroom    v.  J.  Eq.  (1  Beas.)  250  (1859) ;  s.  c.  72 

Ditmas,  4  Paige  Ch.    (N.   Y.)  526  Am.  Dec.  393. 

(1834);  Slee  v.  Manhattan  Ins.  Co.,  *  Concklin  v.  Coddington,  12  N. 

1  Paige  Ch.  (N.  Y.)  48  (1828);  Berlin  J.  Eq.  (1  Beas.)  250  (1859) ;  s.  c.  72 

Building  &  Loan  Assoc,  v.  Clifford,  Am.  Dec.  393. 

30  N.   J.  Eq.  (3  Stew.)  482  (1879) ;  «  Barnard  v.  Bruce,  21  How.  (N. 

Lithauer  v.  Royle,  17  N.  J.  Eq.  (2  Y.)  Pr.  360  (1860). 

C.  E.  Gr.)  40  (1864).  «  Young  v.  Young,   17  N.  J.  Eq. 

«  Millandon  v.  Brugiere,  11  Paige  (2  C.  E.  Gr.)  161  (1364). 
Ch.    (K    Y.)  163  (1844);    Boyd    v. 
Dodge,  10  Paige  Ch.  (N.Y.)  42  (1843). 


§  854.]  COSTS    IN    DOUBLE    FOKECLOSUliE.  945 

unnecessarily  appeared  and  answered,  they  were  not  entitled 
to  costs  until  the  plaintiff's  debt  and  costs  had  been  paid.' 
Now,  however,  a  junior  lienor  is  rarely  allowed  a  bill  of  costs. 

If  the  claims  of  subsequent  incumbrancers  are  correctly 
set  forth  in  the  complaint  for  the  foreclosure  of  a  prior 
mortgage,  it  will  not  be  necessary  for  them  to  appear, 
because  their  rights  will  be  fully  protected  under  the  decree  ; 
and  it  has  been  said,  that  where  the  appearance  of  such 
an  incumbrancer,  though  proper,  is  not  necessary,  the 
plaintiff,  upon  receiving  the  amount  due  him,  may  dis- 
continue as  against  subsequent  incumbrancers  who  have 
appeared,  without  costs  to  them.' 

By  the  rules  and  the  course  of  practice  of  the  court 
of  chancery  of  New  York,  a  subsequent  incumbrancer  was 
not  entitled  to  costs  until  the  debts  and  costs  of  all  prior 
incumbrancers  had  been  satisfied.* 

§  854.  Costs  on  two  foreclosures  against  same  prop- 
erty.— In  Wendell  v.  Wendell,'  where  there  were  two 
separate  mortgages  on  the  same  property,  belonging  to 
different  mortgagees,  and  the  holder  of  the  first  mortgage 
filed  a  bill  of  foreclosure  against  the  second  mortgagee  and 
the  owners  of  the  mortgaged  premises,  and  the  same  solicitor 
filed  another  bill  in  behalf  of  the  second  mortgagee, 
against  the  first  mortgagee  and  the  owners  of  the  premises, 
to  foreclose  the  second  mortgage,  the  court  held,  that  only 
one  bill  of  foreclosure  was  necessary,  and  that  the  owners  of 
the  equity  of  redemption  could  be  charged  with  the  costs  of 
one  suit  only.  This  decision  is  based  upon  the  principle, 
that  where  an  action  is  unnecessarily  brought,  or  where  the 
relief  asked  for,  might  have  been  obtained  by  an  application 
to  the  court  on  a  motion  in  a  case  already  pending,  the 
party  commencing  such  action  can  not  recover  costs.* 


»  Barnard  v.  Bruce,  21  How.  (N.  (N.Y.)  42(1843) ;  Litliauer  v.  Royle, 

Y.)  Pr.  360  (1860)  ;  Merchants'  Ins.  17  K  J.  Eq.  (2  C.  E.Gr.)40,  44  (1864). 

Co.  V.  Marvin,  1  Paige  Ch.  (N.  Y.)  See  Smack  v.  Duncan,  4  Sandf.  Ch. 

557  (1829).  (K  Y.)  621  (1847). 

2  Gallagher  v.  Egan,  2  Sandf.  (N.  *  3  Paige  Ch.  (N.  Y.)  509  (1832). 
Y.)  742  (1850).  "  Roosevelt  v.  Ellithorp,  10  Paige 

3  Boyd  V.  Dodge,  10  Paige  Ch.  Ch.    ( N.   Y. )    415    ( 1843 ) ;     De 


946  WHEN   COSTS   NOT   ALLOWED.      [§§  855-856. 

But,  where  a  subsequent  incumbrancer  can  not  secure  the 
relief  desired,  by  an  appHcation  in  a  suit  alteady  pending, 
the  above  rule  does  not  apply.  Thus,  where  a  second 
mortgagee  is  unable  to  secure  the  relief  prayed  for, — that  is 
to  obtain  a  satisfaction  of  his  mortgage, — in  a  suit  already 
pending  for  the  foreclosure  of  a  prior  mortgage,  because 
of  an  injunction  staying  the  sale  in  such  suit,  he  will  be 
entitled  to  his  costs  in  an  independent  action  to  foreclose.' 

§  855.  When  costs  not  allowed  to  mortgagee. — While 
a  mortgagee  plaintiff  is  generally  entitled  to  costs,  yet 
he  will  not  be  allowed  costs  if  the  foreclosure  is  defective,  on 
account  of  his  errors  in  the  conduct  of  the  proceedings, 
whereby  a  new  foreclosure  is  rendered  necessary.' 

Where  a  mortgagee,  by  his  refusal  to  accept  the  mortgage 
debt  when  tendered,  or  by  interposing  groundless  objections 
to  a  redemption,  compels  the  mortgagor  or  his  assignee 
to  resort  to  an  action,  he  will  not  be  allowed,  but  on  the 
contrary,  may  sometimes  be  compelled  to  pay  costs.* 
Where  the  plaintiff  in  a  mortgage  foreclosure,  unnecessarily 
sets  out  the  rights  of  the  several  defendants  at  length,  the 
extra  costs  occasioned  thereby  will  not  be  allowed  on  taxa- 
tion.* 

§  856.  When  costs  not  allowed  to  defendants. — Costs 
will  not  be  allowed  to  a  defendant  who  unnecessarily 
answers;*  and  where  an  action  has  been  unreasonably,  unjus- 
tifiably or  improperly  defended,  so  that  unnecessary  expenses 
have  been  incurred,  it  is  thought  that  the  court  may,  in 
its  discretion,  order  the  costs,  or  such  part  of  them  as  may 
be  proper,  to  be  paid  personally  by  the  contesting  party ; 
otherwise  the  costs  of  the  prevailing  party  should  be  paid 
from  the  fund.' 


LaVergne  v.  Evertson,  1  Paige  Ch,  *  Slee  v.  Manhattan  Co. ,  1  Paige 

(N.  Y.)  181   (1828) ;  s.   c.    19  Am.  Ch.  (N.  Y.)  48  (1828).     See  Vroom  v. 

Dec.  411.  Ditmas,  4  Paige  Ch.  (N.Y.)  535(1834). 

'  Bache  v.  Purcell,  6  Hun  (N.  Y.)  *  Union  Ins.  Co.  v.  Van  Rensselaer, 

518  (1876) ;  aff'd  51  How.  (N.  Y.)  4  Paige  Ch.  (N.  Y.)  85  (1833). 

Pr.  270.  6  Rood    v.    Winslow,     2    Doug. 

*  Clark  V.  Stilson,  36  Mich.  482  (Mich.)  68  (1845). 

Vl877).  6  Millandon  v.  Brugiere,  11  Paige 


§§  857-858.]  NOTICE  of  no  personal  claim.  947 

§  857.  Notice  of  no  personal  claim.— It  has  been  seen,' 
that  the  plaintiff  in  a  mortgage  foreclosure  may  relieve  him- 
self of  the  expense  of  unnecessary  disclaimers,  by  defen,dants 
who  are  made  parties  to  the  action  solely  for  the  purpose 
of  extinguishing  their  claims  and  of  perfecting  the  title,  by 
serving  upon  them  a  notice  that  no  personal  claim  is  made 
against  them  ;  if  any  defendant,  served  with  such  a  notice, 
unnecessarily  defends,  he  will  be  personally  liable  for  costs 
to  the  plaintiff.'  A  notice  of  no  personal  claim  is  required, 
although  a  copy  of  the  complaint  may  have  been  served.' 

But  it  is  thought  that  the  neglect  of  the  plaintiff  to  serve 
a  notice  of  no  personal  claim,  will  not  deprive  the  court 
of  power  to  award  costs  against  a  defendant  who  unneces- 
sarily or  unreasonably  defends.* 

§  858.     Effect  of  excessive  demand  in  the  complaint. 

— The  fact,  that  a  mortgagee  demands  a  larger  sum  in  his 
complaint  than  the  court  finally  decides  he  is  entitled  to 
receive,  is  no  ground  for  refusing  him  a  bill  of  costs.*  The 
court  held,  in  Loftus  v.  Swift,'  that  "  a  mortgagee  is  always 
considered  as  entitled  to  costs,  unless  there  be  something  of 
positive  misconduct.  Merely  extending  his  claim  beyond 
what  the  court  finally  decides  he  is  entitled  to,  is  no 
ground  for  refusing  him  his  costs."  If,  however,  he  has 
acted  oppressively  in  demanding  a  larger  sum  than  was  due 
on  his  mortgage,  and  the  mortgagor  has  been  diligent 
in  endeavoring  to  ascertain   from  him  the  amount  of  the 


Ch.    (N.   Y.)  163  (1844) ;    Boyd  v.  ^  O'Hara  v.  Brophy,  24  How.  (N. 

Dodge,   10  Paige    Ch.   (N.   Y.)  42  Y.)  Pr.  379  (1863). 

(1843) ;  Bank  of  Plattsburg  v.  Piatt,  ■♦  Gallagher    v.    Egan,    2    Sandf. 

1  Paige  Ch.  (N.  Y.)  464  (1829) ;  In  (N.  Y.)  742  (1850). 

re  Wright,    16  Fed.  Rep.   482,  485  *  Concklin  v.  Coddington,  12  K 

(1883).  J.  Eq.  (1  Beas.)  250  (1859) ;  s.  c.  73 

»  See  ante  §  241  ;  N.  Y.  Code  Civ.  Am.  Dec.   393  ;  Loftus  v.  Swift,  2 

Proc.  §  423.  Sch.  &  L.  642  (1806). 

"  Barker    v.    Burton,     67    Barb.  «  2  Sch.  &  L.  657  (1806),  and  thif? 

(N.  Y.)  458  (1877) ;  O'Hara  v.  Bro-  language  is  approved  in  the  case  of 

phy,  24  How.  (N.  Y.)  Pr.  379  (1863);  Concklin  v.   Coddington.    12  N.  J. 

Benedict  v.  Warriner,  14  How.  (K  Eq.   (1  Beas.)  250  (1859) ;  s.  c.   73 

Y.)    Pr.    570  (1857) ;    Gallagher  v.  Am.  Dec.  393. 
Egan,  2  Sandf.   (N.  Y.)  742  (1850) ; 
Adams  v.  Myers,  61  Wis.  385  (1884). 


948  COSTS    AS    AFFECTED    BY    TENDER.  [§859. 

incumbrance,  in  order  to  pay  it,  costs  will  be  denied  to  him, 
and  possibly,  in  some  cases,  awarded  against  him.* 

§  859.  Effect  of  tender  after  action  brought. — Usually 
a  tender  of  the  payment  of  a  debt,  at  its  maturity,  releases 
the  party  making  such  tender  from  liability  for  interest  and 
costs  thereafter;  but  it  seems  that  in  New  York,*  a  mort- 
gagor can  not  make  and  plead  a  tender  in  a  mortgage 
foreclosure,  for  the  reason  that  a  tender  to  be  good,  must  be 
complete,  and  include  not  only  the  money  due  on  the 
demand,  but  also  all  costs,  and  the  costs  in  a  mortgage 
foreclosure,  resting  in  the  discretion  of  the  court,  are  uncer- 
tain.* 

The  New  York  Code  of  Civil  Procedure  provides,*  that 
where  a  complaint  demands  judgment  for  a  sum  of  money 
only,  which  sum  is  certain  or  may  be  reduced  to  certainty  by 
calculation,  the  defendant  or  his  attorney  may,  at  any 
time  before  the  trial,  tender  to  the  plaintiff,  or  his  attorney, 
such  a  sum  of  money  as  he  conceives  will  be  sufficient  to  pay 
the  plaintiff's  demand,  together  with  the  costs  of  the 
action  to  that  time.  But  it  is  said  that  this  rule  is  confined 
to  actions  at  law,  and  for  that  reason  does  not  affect  actions 
brought  for  the  foreclosure  of  mortgages.' 

Yet,  it  is  thought  that  a  mortgagor,  or  the  owner  of  the 
equity  of  redemption,  may  relieve  himself  from  all  liability 
for  the  payment  of  interest  and  costs,  by  tendering  to  the 


'  Van  Buren  v.  Olmstead,  5  Paige  But  these  cases  were  overruled  in 

Ch.  (N.  Y.)  9  (1834) ;  Vrooni  v.  Dit-  Bathgate  v.  Haskin,  63  N.  Y.   261 

mas,  4  Paige  Ch.  (N.  Y.)  536  (1834) ;  (1875). 

Large  V.  VanDoieu,  14  N.  J.  Eq.  (1  *  Bartow    v.    Cleveland,   7    Abb. 

LlcCart.)  308  (1863);  Detillin  v.  Gale,  (N.  Y.)  Pr.  339  (1858) ;  s.  c.  16  How. 

7  Ves.  583  (1802).  (N.  Y.)  Pr.  364  ;  Thurston  v.  Marsh, 

"  la  New  York  it  was  formerly  5  Abb.  (N.  Y.)  Pr.  389  (1857) ;  s.  c. 

held,  that  a  tender  made  no  differ-  14  How.   (N.  Y.)  Pr.  572  ;  Pratt  v. 

ence  in  the  amount  of  the  costs.  Ramsdell,   16  How.  (N.  Y.)  Pr.  59 

Bartow  v.  Cleveland,  16  How.  (N.  (1858). 

T.)  Pr.  364  (1858);  s.  c.  7  Abb.  (N.  *  N.    T.  Code   Civ.    Proc.  §  7C1, 

Y.)  Pr.  339  ;  Pratt  v.  Eamsdell,  16  See  also  §^  1634.  1635. 

How.  (N.  Y.)  Pr.  59,  62  (1858) ;  s.  c.  ^  New    Y'ork    Fire    Ins,    Co.    v. 

7  Abb.  (N.  Y.)  Pr.  310  a  ;  Stesensv.  Burrell,    9  How.   (N.  Y.)  Pr.    398 

Veriuue,  2  Lans.  (N.Y.)  90  (1870).  (1854). 


§§  860-861.]  COSTS  TO  guaedian  ad  litem.  949 

plaintiff  the  amount  due  upon  the  mortgage,  together  with 
such  costs  as  he  thinks  sufficient ;  upon  refusal  of  the  plaintiff 
to  accept  the  amount,  the  mortgagor  may  apply  to  the  court 
for  leave  to  pay  the  amount  due,  and  such  costs  as  the 
court  in  its  discretion  may  allow,  into  court,  and  upon  such 
payment  the  court  will  either  order  the  action  discontinued 
or  stay  all  proceedings  therein.*  Where  a  tender  is  made 
before  judgment,  and  the  parties  themselves  do  not  mutually 
arrange  the  costs,  either  party  may  apply  to  the  court  for 
the  taxation  thereof.* 

§  860.  Costs  on  default. — Where  judgment  is  taken  by 
default  in  a  mortgage  foreclosure,  costs  will  be  allowed 
as  provided  in  section  3251,  of  the  Code  of  Civil  Procedure; 
and  it  has  been  held,  that  the  fact,  that  a  tender  of  the 
amount  due  was  made,  will  not  make  any  difference  as 
to  the  amount>  to  be  allowed.* 

§  861.  Costs  allowed  guardian  ad  litem. — In  New 
York  the  compensation  allowed  to  a  guardian  ad  litem  in 
an  equitable  action,  is  hot  dependent  upon  any  provision 
of  the  Code.  It  was  the  practice  of  the  court  of  chancery  to 
compensate  such  guardian,  for  the  services  actually  per- 
formed by  him  in  the  protection  of  the  infant's  interests,  by 
allowing  him  to  recover  costs  out  of  the  proceeds  of  the 
sale,  not  exceeding  the  taxable  items  prescribed  for  such 
services.* 

It  is  a  general  rule,  that  the  guardian  ad  litem  of  an 
infant    defendant   can    be   allowed    only  taxable    costs    as 


1  Bartow  v.  Cleveland,  7  Abb.  7  Abb.  (N.  Y.)  Pr.  339  ;  Pratt  v. 
(N.  Y.)Pr.  339  (1858) ;  s.  c.  16  How.  Ramsdell,  16  How.  (N.  Y.)  Pr.  59 
(N.  Y.)  Pr.  364.  See  N.  Y.  Code  (1858);  s.  c.  7  Abb.  (N.  Y.)  Pr. 
Civ.  Proc.  §§  1634,  1635.  340  n  ;  Stevens  v.  Veriane,  2  Lans. 

"Bartow    v.    Cleveland,   7    Abb.  (N.  Y.)  90  (1870).    But  see  Adams  v. 

(N.    Y.)    Pr.    339    (1858) ;     s.     c.  Myers.  61  Wis.  385  (1884;. 

16  How.  (N.  Y.)  Pr.  364  ;  Stevens  v.  ^  Weed  v.  Paine,  31  Hun  (N.  Y.) 

Veriane,  2  Lans.  (N.  Y.)  90  (1870) ;  10   (1883) ;    s.  c.    13  Abb.  (N.  Y.) 

Pratt  V.  Ramsdell.  16  How.  (N.  Y.)  N.  C.    200  ;  Gott  v.  Cook,  7  Paige 

Pr.  59(1858).  See  Morris  v.  Wheeler,  Ch.  (N.  Y.)  521,  544  (1839)  ;  Union 

45  N.  Y.  708  (1871).  Ins.  Co.  v.  Rensselaer,  4  Paige  Cli. 

2  Bartow  v.  Cleveland.  16  How.  (N.  Y.)  85  (lb:.3). 
(N.    Y.)    Pr.    364    (1858);     s.    c. 


950  COSTS  ON  APPOLNTINa  RECEIVER.     [§§  862-863. 

against  a  fund  belonging  to  the  other  parties  to  the  action.' 
Where  an  extra  allowance  is  made  to  the  guardian  ad  litem  of 
infant  defendants,  in  a  mortgage  foreclosure,  it  must  be  paid 
out  of  their  share,  since  only  the  taxable  costs  can  be 
charged  upon  that  portion  of  the  fund  which  belongs  to 
other  parties.'  But  only  very  special  circumstances  will 
authorize  a  court  to  allow  anything  beyond  the  taxable 
costs  of  the  guardian  ad  litem,  to  be  charged  upon  a  fund 
belonging  to  an  infant.' 

§  862.  Costs  on  appointment  of  receiver. — Where  it  is 
found  necessary  to  appoint  a  receiver  to  take  charge  of  the 
mortgaged  premises  or  to  collect  the  rents  and  profits 
thereof  during  the  pendency  of  the  action,  the  costs  of  the 
motion  for  the  appointment  of  such  receiver  are  sometimes 
reserved  until  the  hearing,*  even  where  the  application 
therefor  is  refused ;'  but  the  court  may,  in  its  discretion, 
deal  with  the  costs  of  a  motion  for  a  receiver  at  the  time  of 
the  application  ;*  or  the  costs  of  the  application  may  be 
ordered  to  be  taxed  with  the  costs.of  the  action.* 

§  863.  Costs  on  resale. — Where  a  sale  is  reported  by  the 
officer  conducting  it,  and  the  purchaser  refuses  to  comply 
with  its  terms,  the  court  may,  upon  representations  by  the 
plaintiff,  or  other  parties  in  interest,  order  that  cause  be 
shown  why  the  terms  of  the  sale  should  not  be  complied 
with ;  if  sufficient  cause  is  not  shown,  it  may,  considering  all 
the  circumstances  of  the  case,  either  ratify  the  sale  or  set  it 
aside,  as  will  best  subserve  the  interests  of  the  parties  con- 
cerned.*    And  in  such  a  case,  if  the  sale  is  set  aside,  the  court 


'  Union  Ins.  Co.  v.  Rensselaer,  4         '  Goodman  v.  Whitcome,  1  Jac. 

Paige  Ch.  (N.  Y)  85  (1833),  «&  W.  593  (1820) ;  Wilson  v.  Wilson, 

»  Downing  v.  Marshall,  37  N.  Y.  18  Jur.  581  (1854) ;  Skinner's  Com- 

391  (1867) ;  Union  Ins.  Co.  v.  Kens-  pany  v.   Irisli  Society,  1  M.  &  C. 

selaer,  4  Paige  Ch.  (N.  Y.)  85  (1833).  169  (1835) ;  Fall  v.  Elkins,  9  W.  R. 

»  Union  Ins.  Co.  v.  Rensselaer,  4  861  (1861). 
Paige  Ch.  (N.  Y.)  85  (1833).  •"  Bowker  v.  Henry,  6  L.  T.,  N. 

"  Chaplin  v.  Young,  6  L.  T.,  K  S.  43  (1862) ;  Topping  v.  Searson,  6 

S.  97  (1802).  L.  T.,  N.   S.  449    (18G2) ;    Full  v. 

»  Baxter  v.  West,  28  L.  J.  Ch.  169  Elkins.  9  W.  R.  861  (18(31). 
(1859) ;  Coope  v.    Creswell,  12  W.  «  Schaefer  v.  O'Brien,  49  Md.  2G3 

R.  299  (1864).  (1878). 


§  864.]  PEESOJJTAL   LIABILITY   FOE    COSTS.  951 

may  properly  impose  upon  the  party  reported  as  purchaser, 
all  the  costs  and  expenses  attending  the  sale,  as  the  condition 
of  releasing  him  from  his  bid  and  the  consequences  of  his 
default.* 

§  864.  Who  personally  liable  for  costs. — It  was  said  by 
Lord  Eldon,  in  the  case  of  Detillen  v.  Gale"'  that  "it  is 
admitted  that  there  is  no  instance  in  which  a  mortgagee  has 
been  called  upon  to  pay  costs ;" '  but  it  is  thought  that  the 
mortgagee  may  be  required  to  pay  costs,  if  he  has  rejected 
a  tender  of  the  full  amount  due  him,  together  with  his 
costs,  or  if  the  litigation  has  in  any  way  been  occasioned  oy 
his  fraud  or  mistake.*  Where  the  plaintiff  in  a  mortgage 
foreclosure  so  misstates  the  rights  of  a  defendant  as  to  render 
it  necessary  for  him  to  put  in  an  answer  to  protect  his 
rights,  the  plaintiff  may  be  personally  charged  with  the  extra 
costs  occasioned  thereby.* 

The  mortgagor,  or  any  other  party  to  the  action,  who 
unnecessarily  defends  it,  may  be  charged  personally  with  the 
costs,  for  the  benefit  of  those  entitled  to  the  surplus.* 
Thus,  costs  are  properly  imposed  against  a  subsequent 
incumbrancer  who  defends  against  a  bill  of  review  filed  by  a 
principal  defendant,  and  maintains  the  supplemental  liti- 
gation in  opposition  to  the  terms  of  a  mortgage  binding  his 
lands.* 

It  has  been  held,  that  a  purchaser  of  a  portion  of  the 
mortgaged  premises  from  the  mortgagor,  should  pay  his 
p^ortion  of  all  legitimate  costs  incurred  in  the  foreclosure  of 
a  mortgage  upon  such  lands  ;*  and  it  is  certain  that  a  sub- 
sequent purchaser  of:  mortgaged  premises  may  make  himself 
personally  liable  for  costs,  although  he  may  not  be  liable  for 


»  Schaefer  v.  O'Brien,  49  Md.  253  «  Jones  v.   Phelps,   2  Barb.   Ch. 

(1878).  (K    Y.)    440  (1847);    Barnard    v. 

«  7  Ves.  584  (1802).  Bruce,   21   How.   (N.    Y.)  Pr.   360 

3  House    V.    Eisenlord,    30    Hun  (I860) ;  O'Hara  v.  Brophy,  24  How. 

(N.  Y.)  90  (1883).  (N.  Y.)  Pr,  379  (1863).     See  ante 

*  Pratt  V.  Stiles,  9  Abb.  (N.  Y.)  §241. 

Pr.   150  (1859) ;  s.  c.   17  How.  (N.  '   '  Mickle  v.  Maxfield,  42  Mich.  304 

Y.)Pr.  211.  (1879). 

*  Union  Ins.  Co.  v.  Rensselaer,  4  *  Bates  v.   Ruddick,  2  Iowa,  425 
Paige  Ch.  (N.  Y.)  85  (1833).  (1856) ;  s.  c.  65  Am.  Dec.  774. 


952  COSTS  FKOM  PROCEEDS  OF  SALE.    [§§  865-866. 

the  payment  of  the  mortgage  debt,  if  he  makes  an  unreason- 
able and  unfounded  defence  to  the  suit,  and  the  property  is 
not  of  sufficient  value  to  pay  the  incumbrance.* 

§  865.  Out  of  what  fund  costs  payable. — The  costs  of  a 
mortgage  foreclosure  are  usually  payable  from  the  proceeds 
of  the  sale  of  the  mortgaged  premises."  It  is  thought  that 
where  the  circumstances  of  the  case  require  it,  the  court 
may  direct  the  costs  to  be  paid  out  of  any  moneys  in  its 
custody,  belonging  to  any  of  the  parties  litigant,  and 
subject  to  the  lien  of  the  mortgage.'  Thus,  where  a  prior 
mortgagee  is  properly  made  a  party  to  a  foreclosure,  for 
the  purpose  of  ascertaining  the  amount  of  his  claim,  such 
mortgagee  is  entitled  to  his  costs,  to  be  paid  out  of  the 
property,  or  by  the  plaintiff  personally,  in  the  discretion  of 
the  court.* 

But  where  a  party  is  improperly  made  a  defendant,  his 
costs  must  be  paid  by  the  plaintiff  personally,'  and  not 
out  of  the  general  fund.'  Where  a  complaint  is  dismissed 
as  to  some  of  the  defendants,  the  costs  are  to  be  paid  by  the 
plaintiff,  and  not  out  of  the  funds  raised  by  the  sale  of 
the  mortgaged  premises.^ 

§866.  Counsel  fees  in  foreclosing  mortgages.— It  is 
the  general  rule,  that  a  reasonable  attorney's  fee  for  foreclos- 
ing a  mortgage,  beyond  the  costs  allowed  by  law,  may  be 
contracted  for  in  a  mortgage,  and  the  court  will  consider  the 
amount  stipulated  for  by  the  parties  to  be  reasonable, 
unless  it  is  extravagantly  large  and  extortionate,  so  as  ,to 
show  that  it  was  intended  as  a  penalty  to  be  held  in  terrorem 
over  the  mortgagor.*     A  percentage  may  be  allowed  instead 


•Daclniry  v.  Robinson,  14  N.  J.  Dodge,    10    Paige  Ch.   (N.  Y.)  42 

Eq.  (1  McCart.)  324  (1862).  (1843). 

■■^  Botsford  V.  Botsford,  49  Mich.  *  JMillandon  v.  Brugiere,  11  Paige 

29  (1882).  Ch.  (N.  Y.)  163  (1844). 

2  Falkner    v.    Priuling     Co.,    74  *  Nelson  v.  Montgomery,  1  Edw. 

Ala.  359  (1883).  Ch.  (N.  Y.)  657  (1833). 

••  Chamberlain    v.    Dempsey,    36  ■■  Rosa  v.  Jenkins,  81  Hun  (N.  Y.) 

N.   Y.  144,    147   (1867);    Jones    v.  384(1884). 

Phelps,   2  Barb.    Ch.  (N.    Y.)   440  « Munter    v.    Linn,    61   Ala.    493 

(1847) ;  Mayer  v.  Salisbury,  1  Barb.  (1878)  ;  Alden  v.  Pryal,  60  Cal.  215 

Ch.   (N.    Y.)  546  (184G);   Boyd  v.  (1882);  Clawson  v.  Munson,  55  111. 


§  866.]      COUNSEL  FEE  ON  EOEEOLOSUEE.         953 

of  a  fixed  sum  as  a  fee,  or  the  fee  may  be  stipulated  for 
in  blank.' 

A  provision  in  a  mortgage,  that  the  mortgagor  shall,  in 
case  of  foreclosure,  pay  the  costs  and  "  fifty  dollars  as  liqui- 
dated damages  for  the  foreclosure  of  the  mortgage,"  has 
been  held  to  be  void,  because  so  indefinite  that  the  court 
could  not  tell  whether  the  amount  was  for  something  legal 
or  illegal,  and  a  judgment  rendered  on  such  a  stipulation  for 
fifty  dollars  as  an  attorney's  fee,  was  declared  erroneous.' 
But  a  stipulation  that  the  mortgagee  shall  be  entitled  on 
foreclosure,  "  to  a  judgment  for  the  possession  of  said 
premises,  and  costs,  expenses  and  an  attorney's  fee  of  ten 
per  centum  of  the  amount  due  for  foreclosing  said  mortgage," 
is  valid ;  and  on  a  mortgage  debt  of  $4,000,  or  less,  such  a 
percentage  has  been  held  not  to  be  so  excessive  that  a  court 
of  equity  would  refuse  to  enforce  it.* 

A  stipulation  in  a  mortgage,  for  the  payment  of  an  attor- 
ney's fee,  is  regarded  as  a  compensation  to  the  mortgagee  for 
expenses  incurred  by  the  default  of  the  mortgagor,  and  will 
not  be  relieved  against  in  equity,  if  fairly  entered  into, 
unless  it  is  evidently  a  penalty,  or  made  the  cloak  for  an 
usurious  contract.* 


394  (1870) ;    McLane  v.  Abrams,  2  *  Thus,  where  the  mortgage  fore- 

Nev.  207,  208(1866);  Cox  v.  Smith,  closed  provided  for  "counsel  fees 

1  Nev.  161  (1865) ;  s.  c.  90  Am.  Dec.  and  charges  of  attorneys  and  coun- 

476 ;  Daly  v.  Maitland,  88  Pa.  St.  sel  employed  in   such   foreclosure 

884  (1878) ;  Hitchcock  v.  Merrick,      suit,  not  exceeding ,"  it  was 

15  Wis.  522  (1862) ;  Rice  v.  Cribb,  held  that  counsel  fees  were  properly 

12    Wis.    179   (1860).       Compare,  allowed.     Alden  v.  Pryal,  60  Cal. 

Ogborn    v.    Eliason,    77    Ind.    393  215(1882). 

(1881) ;  Alexandrie  v.  Saloy,  14  La.  *  Foote  v.  Sprague,  13  Kan.  155 

An     327    (1859).       In    McLane    v.  (1874) ;     Stover  v.    Johnnycake,    9 

Abrams,  2  Nev.  199  (1866),  a  stipu-  Kan.  367  (1872) ;  Tholen  v.  Duffy, 

lation  for  ten  per  centum  on  the  7  Kan.  405  (1871) ;  Kurtz  v.  Spon- 

amount  of  the    mortgage,   $6,000,  able,  6  Kan.  395  (1878). 

was  not  regarded  as  unreasonable.  ^  Sharp  v.   Barker,  11  Kan.  381 

In  Daly  v.  Maitland,  88  Pa.  St.  384  (1873). 

(1878) ;    8.  c.  13  West.  Jur.  204,  a  *  Daly  v.  Maitland,  88  Pa.  St.  384 

stipulation  for  a  commission  of  five  (1878).     Compare,  Myer  v.  Hart,  40 

per    centum    on     a    mortgage    of  Mich.  517  (1879)  ;  s.  c.  25  Am.  Rep. 

$14,000  was  considered  to  be  unrea-  558.     See  Alden  v.  Pryal,   GO  Cal. 

louable.  215  (1882). 


954:  attorney's  fee.  [§§  867-8G8. 

§  867.  Counsel  fees  in  Kentucky  and  Michigan. — It 
seems  that  a  different  doctrine  prevails  in  Kentucky'  and 
Michigan.*  It  was  held  by  the  supreme  court  of  Michigan, 
in  the  case  of  Vosburgh  v.  Lay,'  that  a  stipulation  in 
a  mortgage  fixing  in  advance  a  gross  allowance,  is  against 
public  policy  and  can  not  be  enforced  ;  and  that  this  is 
specially  true,  where  the  allowance  for  an  attorney's  fee 
differs  from  that  authorized  by  statute.* 

§  868.    Stipulation  for  attorney's  fee — When  usurious. 

— A  stipulation  in  a  mortgage,  that  the  mortgagor,  in 
addition  to  legal  interest,  shall  pay  to  the  mortgagee  an 
attorney's  fee  for  collecting  the  debt,  such  fee  to  be  taxed  in 
the  judgment,  will  not  render  the  agreement  usurious, 
and  may  be  enforced,*  because  the  debtor,  by  neglecting 
or  refusing  to  pay. the  debt,  imposes  upon  the  mortgagee 
the  expense  of  resorting  to  law  to  enforce  his  rights,  and  it 
is  only  just  that  all  the  expenses  of  foreclosure  should 
be  borne  by  the  party  whose  wrong  has  made  it  necessary  to 
incur  them.'  But  such  a  stipulation  will  not  embrace  the 
unnecessary  and  useless  services  of  a  solicitor,  however  exten- 
sive or  laborious.''     Where  such  a  stipulation  is  intended  as 


»  Rilling  V.   Thompson,  12  Bush  (1878) ;  McGill  v.  Griffin,  32  Iowa, 

(Ky.)    310    (1876) ;    Thomasson    v.  445  (1871) ;  Weatherby  v.  Smith,  30 

Townsend,     10    Bush     (Ky.)     114  Iowa,  131  (1870) ;  s.  c.   6  Am.  Rep. 

(1873).  663  ;  Nelson  v.  Everett,  29  Iowa,  184 

2  Millard  v.  Truax,  50  Mich.  343  (1870) ;  Conrad  v.  Gibbon,  29  Iowa, 

(1883)  ;    Botsford  v.    Botsford,    49  120  (1870) ;  Gilmore  v.  Ferguson,  28 

Mich.  29  (1882) ;  Vosburgh  v.  Lay,  Iowa,  220  (1869) ;  Gower  v.  Carter, 

45  Mich.  455  (1881) ;  Parks  v.  Allen,  3  Clarke  (Iowa),  244  (1856).    In  Wil- 

42  Mich.  482  (1880) ;  Myer  v.  Hart,  liams  v.  Meeker,  29  Iowa,  292  (1870), 

40  Mich.  517  (1879);  s.  c.  29  Am.  an  attorney's  fee  of  $75  was  allowed. 
Rep.  553.  Contra,  Rilling    v.    Thompson,    13 

8  45  Mich.  455  (1881).  Bush  (Ky.)  310  (1876) ;  Thomasson 

*  The  court  held  in  this  case,  that  v.   Townsend,   10  Bush  (Ky.)  114 
"  in  respect  to  all  proceedings  of  this  (1873). 

nature,   and  which  are  exceptional  •  Hitchcock  v.  Merrick,  15  "Wis. 

and  peculiar,  all  allowances  which  522  (1862);  Rice  v.  Cribb,  12  Wis. 

partake  of  the  character  of  fees  are  179  (1800) ;   Boyd  v.    Summer,   10 

dependent    on    legislation,"    citing  Wis.  41  (1859) ;  Tallman  v.  Trues- 

Booth  V.  McQueen,  1  Doug.  (Mich.)  dell,  3  Wis.  443,  454  (1854). 

41  (1843).  '  Soles   v.   Sheppard,  99  111.  620 

*  Munter    v.    Linn,   61    Ala.   492  (I88I). 


§  869.]         DISCEETIONAEY    ALLOWANCE    OF   FEE.  955 

a  gratuity,  or  is  without  consideration,  or  is  inserted  as 
a  cover  for  usury,  which  is  prohibited  by  statute,  it  will  be 
void.' 

§  869.  Allowance  of  attorney's  fee — Discretion  of 
court. — It  has  been  said,  that  the  allowance  of  an  attorney's 
fee  for  the  collection  of  a  mortgage,  is  in  the  nature  of 
a  penalty,  rather  than  of  liquidated  damages  ;'  and  that  it  is 
within  the  sound  discretion  of  the  court  in  which  the  mort- 
gage is  being  foreclosed,  to  determine  whether  the  whole,  or 
any  part  of  the  sum  stipulated  for  in  the  mortgage  as 
a  counsel  fee,  shall  be  included  in  the  judgment.*  The 
allowance  of  the  stipulated  fee,  being  a  matter  of  discretion 
with  the  court,  can  not  be  reviewed  on  appeal,  unless  it 
appears  that  such  discretion  has  been  abused.* 

The  supreme  court  of  Alabama  held,  in  Munter  v.  Linn,* 
that  in  case  of  such  a  stipulation,  a  reasonable  sum  only  can 
be  collected  as  an  attorney's  fee,  although  a  larger  sum 
or  per  centum  may  have  been  agreed  upon  by  the  parties. 
And  the  supreme  court  of  Mississippi  held,  in  the  case 
of  Voechting  v.  Grau,"  that  where  a  mortgage  contains  a 
stipulation,  that  in  case  of  foreclosure,  the  mortgagor  will 
pay  "  in  addition  to  the  taxable  costs  a  reasonable  and 
customary  sum  for  an  attorney's  or  solicitor's  fee,"  the  amount 
to  be  paid  for  such  fee  must  be  ascertained  by  evidence, 


'  Soles  V.  Sheppard,   99  HI.   616  ing  such  a  fee  in  the  decree.    Mc- 

(1881).  Intire  v.  Yates,  104  lU.  491  (1882). 

»  Daly  V.  Maitland,  88  Pa.  St.  384  A   mortgage    provided    for   the 

(1878).  allowance  of  a  counsel  fee,  "  at  the 

*  Daly  V.  Maitland,  88  Pa.  St.  384  rate    of  —  per    centum,    upon    the 

(1878) ;  Reed  v.  Catlin,  49  Wis.  686  amount  which  may  be  found  to  be 

(1880).     See  Carriere  v.  Minturn,  5  due  on  principal  and  interest."    The 

Cal.  485  (1855) ;  Insurance  Co.   v.  court    allowed   one   hundred    and 

Shields,  12  Phila.  (Pa.)  407  (1882).  fourteen  dollars,  bemg  25  per  centum 

*Reed  v.    Catlin,    49    Wis.    686  of  the  amount  found  due ;  it  was  held 

(1880).     Where  a  mortgage  contains  that  such  an  allowance  was  author- 

a  provision,  that  in  case  of  fore-  ized  by  the  terms  of  the  mortgage, 

closure,   two   per   centum   on   the  Rickards  v.   Hutchinson,   18  Nev. 

amount  found  due  on  the  mortgage  815  (1883). 

indebtedness,  shall  be  allowed  and  *  61  Ala.  497  (1878). 

included  in  the  decree  as  a  solicitor's  *  55  Wis.  312  (1882). 
fee,  there  will  be  no  error  in  includ- 


956  ALLOWANCE    OF   FEE.  [§§  870-871. 

as  the  Judge  has  no  authority  to  fix  the  amount  thereof  on 
a  mere  inspection  of  the  record,  or  from  his  personal  knowl- 
edge of  the  services  rendered.* 

Where  a  mortgage  contains  a  stipulation  for  the  payment 
of  a  specified  sum  as  an  attorney's  fee,  in  case  the  mortgage 
is  foreclosed,  it  seems  that  the  allowance  of  a  greater  sum  will 
be  erroneous.*  In  the  early  case  of  Remington  v.  Willard,* 
however,  where  the  mortgage  contained  a  stipulation  for  the 
payment  of  a  fee  of  seventy-five  dollars,  the  court  allowed, 
under  the  Code,  five  per  centum  on  the  amount  due. 

§  870.  Allowance  of  attorney's  fee  a  matter  of  contract 
or  statute. — A  judgment  of  foreclosure  can  not  include  a  sum 
as  an  attorney's  fee  in  addition  to  statutory  costs,  unless 
such  sum  is  stipulated  for  in  the  mortgage,*  or  expressly 
authorized  by  statute,  as  in  some  of  the  states.'  It  is 
thought,  however,  that  courts  of  equity  may  allow  the 
counsel  fees  incurred  by  the  mortgagee  in  defending  his 
title,  without  an  express  contract  in  the  mortgage,  or 
a  statutory  enactment  providing  therefor." 

In  an  action  for  the  foreclosure  of  a  mortgage  executed 
by  a  corporation,  the  plaintiff  is  not  entitled  to  recover 
a  counsel  fee  for  such  foreclosure,  where  the  resolutions  of 
the  corporation,  authorizing  the  loan  and  the  execution  of 
the  mortgage,  did  not  provide  for  the  payment  of  a  counsel 
fee,  or  that  such  fee  should  be  secured  by  the  mortgage.* 

§  871.    Enforcement  of  counsel  fee  against  purchaser. — 

A  covenant  in  a  mortgage,  that  in  case  of  foreclosure  the 


•  As  to  the  necessity  for  proof  of  54  Wis.   591   (1 882) ;  Hitchcock  ▼. 
the  value  of  an  attorney's  services,  Merrick,  15  Wis.  522  (1862). 

see  Wyant  v.  Pottorff,  37  Ind.  512  »  Hunt  v.   Chapman,   62  N.   Y. 

(1871) ;  Samstag  v.   Conley,  64  Mo.  333  (1875) ;   Bocks  v.  Hathorn,  17 

476  (1877) ;  First  Nat.  Bank  of  Tren-  Hun  (N.  Y.)  87  (1879).  See  Stover  v. 

ton  v.  Gay,  63  Mo.  33  (1876) ;  Woods  Johnnycake,  9  Kan.  367  (1872) ;  In 

V.  North,  84  Pa.  St.  407  (1877).  re  Carroll's  Will,  53  Wis.  228  (1881); 

«  Palmeter  v.  Carey,  63  Wis.  426  B.  c.  10  N.  W.  Kep.  375. 

(1885).  « Lomax    v.    Hide,    2  Vern,  185 

»  15  Wis.  583  (1862).  (1690) ;  Hunt  v.  Fownes,  9  Ves.  70 

*  Sichel  v.   Carrillo,  42  Cal.   493  (1803). 

(1871) ;    Stover    v.    Johnnycake,    9  '  Schallard  v.    Eel  River    Steam 

Kan.  3G7  (1873) ;  Wylie  v.  Karner,  Nav.  Co.,  70  Col.  144  (1886). 


§  872.]      COUNSEL  FEE  ON  FORECLOSURE.         957 

mortgagor  shall  pay  to  the  mortgagee  a  solicitor's  fee,  in 
addition  to  taxable  costs  in  the  suit,  is  enforceable  not  only 
against  the  mortgagor  but  also  against  a  subsequent  pur- 
chaser of  the  mortgaged  premises.' 

In  the  case  of  Pierce  v.  Kneeland,*  the  court  say:  "  It  is 
objected  that  the  covenant  could  not  be  enforced  against 
subsequent  purchasers.  But  we  fail  to  see  any  good  reason 
why  it  could  not.  In  case  of  foreclosure,  the  property  was 
bound  for  the  payment  of  the  one  hundred  dollars  solicitor's 
fee  as  much  as  it  was  for  the  taxable  costs.  The  defendants 
purchased  the  property  subject  to  the  incumbrances,  and  it 
is  certainly  strange  that  they  can  relieve  themselves  from 
conditions  in  the  mortgage  which  were  binding  upon  their 
immediate  grantors." 

§  872.  Allegation  as  to  counsel  fee. — The  fee  stipu- 
lated to  be  paid  in  a  foreclosure,  is  additional  to  the  costs 
recoverable  by  statute.*  It  is  not  essential  that  there  should 
be  an  averment  that  the  amount  of  the  fee  stipulated  for  in 
the  mortgage  is  reasonable,  as  it  is  a  mere  incident  to  the 
cause  of  action  and  may  be  fixed  by  the  court  in  its  discretion.* 

It  has  been  said,  that  where  a  mortgage  contains  a  stipu- 
lation that  the  mortgagee  shall  be  entitled  to  an  attorney's 
fee  in  any  action  that  he  may  be  compelled  to  bring  on  the 
mortgage,  he  may  claim  such  fee  when,  as  a  defendant  in 
the  foreclosure  of  a  prior  mortgage,  he  sets  up  his  cause  of 
action,  because  this  is,  in  effect,  bringing  an  action  on  the 
mortgage.'  But  the  supreme  court  of  Illinois  held,  in 
the  case  of  Soles  v.  Sheppard,*  that  such  a  stipulation  does 
not  apply  to  the  filing  of  an  answer  or  a  cross  bill  by  a 
mortgagee  to  a  complaint  to  foreclose  a  prior  mortgage. 

A  stipulation  in  a  mortgage  allowing  a  counsel  fee  in  a 
foreclosure  does  not  entitle  the  plaintiff  to  such   counsel 


'  Pierce  v.  Kneeland,  16  Wis.  673  (1855) ;  Carriere  v.  Minturn,  5  Cal. 

(1863) ;  s.  c.  84  Am.  Dec.  720.  435  (1855). 

«  16  Wis.  672  (1863) ;  B.  c.  84  Am.  *  Carriere  v.  Mintum,  5  Cal.  435 

Dec.  726.    See  Weatherby  v.  Smith,  (1855). 

30  Iowa,  131  (1870) ;   s.  c.  6  Am.  «  Lanoue  v.  MoKinnon,  19  Kan. 

Rep.  663.  408  (1877). 

»  Gronfier  v.  Mintum,  5  Cal.  492  «  99  111.  616  (1881). 


958         WHEN  attorney's  fee  not  allowed.    [§  873. 

fee  until  he  has  paid  it  or  become  liable  therefor.'  The 
mortgagee  can  not  recover  such  fee  for  personally  prosecut- 
ing his  own  foreclosure;*  consequently,  an  attorney  who  is 
the  mortgagee,  can  not  recover  such  a  fee  in  his  own 
foreclosure.* 

§  873.  When  attorney's  fee  not  allowed. — A  counsel 
fee  for  foreclosing  a  mortgage  will  be  allowed  in  no  case, 
unless  stipulated  in  the  mortgage,*  or  expressly  authorized 
by  statute  ;*  and  even  where  it  is  so  stipulated  or  authorized, 
such  fee  will  not  be  allowed  in  the  decree  unless  it  is 
demanded  in  the  bill  or  complaint.' 

A  provision  in  a  mortgage  for  an  attorney's  fee  is  not 
enforceable  unless  a  sale  is  actually  made.'  Thus,  it  was 
held  in  Jennings  v.  McKay,*  that  astipulation  in  a  mortgage 
providing  that  "an  attorney's  fee  of  fifty  dollars  for  fore- 
closure, with  costs  of  suit  and  accruing  costs,"  shall  be 
taxed  against  the  mortgagor,  does  not  authorize  such  a  fee 
unless  a  decree  for  foreclosure  is  entered  ;  if  the  mortgagor 
pays  the  debt  after  the  action  is  commenced,  but  before  a 
decree  of  sale  is  entered,  the  fee  can  not  be  collected.  It 
has  been  held,  that  under  a  provision  in  a  power  of  sale  for 
an  attorney's  fee  in  case  of  foreclosure,  no  allowance  can  be 
made  if  the  mortgage  is  foreclosed  in  chancery  instead." 

The  supreme  court  of  Maryland  held,  in  the  case  of  Maus 
V.   McKellip,'"   that    fees  paid    to    counsel   for  resisting   an 


■  Bank  of  Woodland  v.  Treadland,  •  Augustine  v.  Doud,  1  111.  App. 

55    Cal.    379  (1880);    Patterson    v.  588(1878). 

Donner,  48  Cal.  369  (1874) ;  Soles  v.  ^  Myer    v.    Hart,    40  Mich.    517 

Sheppard,  99  111.  616  (1881) ;  Reed  (1879) ;  s.  c.  25  Am.  Rep.  553. 

V.  Catlin,  49  Wis.  686  (1880).  «  19  Kan.  120(1 8 r6),  distinguishing 

*  Patterson  v.  Donner,  48  Cal.  369  Life  Association  v.   Dale,   17  Kan. 

(1874) ;  Reed  v.  Catlin,  49  Wis.  686  185  (1877).     See  Schmidt  v.  Potter, 

(1880).  35  Iowa,  426  ( 1873 ) ;  Collar  v.  Har- 

'3  Patterson    v.    Donner,    48   Cal.  rison,  30  Mich.  66  (1874). 

369    (1874) ;     Sclater   v.   Cottam,    3  »  Van  Marter    v.      McMillan,     39 

Jur.  K  S.  630  (1857).  Mich.  304  (1878) ;  Hardwick  v.  Bas- 

*Sichelv.Carrillo,42  Cal.  493(1871);  sett,   29  Mich.    17  (1874);  Sage  v. 

Wylie  V.  Karner,  54  Wis.  591  (1882).  Riggs,  12  Mich.  313  (1864). 

»  Bockes  V.  Hathorn,  17  Hun  (N.  '«  38  Md.  231  (1873). 
Y.)  87  (1879);    Stover  v.    Johnny- 
cake,  9  Kan.  367  (1872). 


§§  874-875.]         COSTS  on  eedeeming.  959 

application  by  the  assignee  in  bankruptcy  of  the  mortgagor 
to  enjoin  a  sale  under  a  power  contained  in  the  mortgage,  do 
not  constitute  a  payment  in  defence  of  the  mortgage  title. 
A  defendant  in  a  foreclosure  who  does  not  seek  to  redeem, 
but  who  claims  the  land  by  a  superior  title,  is  not  in  a 
position  to  object  to  the  amount  of  an  attorney's  fee  allowed 
by  the  court.* 

§  874.  Costs  on  redeeming.— It  is  said  in  the  case 
of  Benedict  v.  Gilman,"  that  upon  the  redemption  of  mort- 
gaged premises  by  a  judgment  creditor,  after  a  statutory 
foreclosure,  he  is  not  bound  to  pay  the  costs  of  such  fore- 
closure; but  the  general  rule  is  that  a  party  who  is  permitted 
to  redeem  mortgaged  premises,  whether  he  is  a  plaintiff  or 
a  defendant  in  the  suit,  must  pay  the  costs  of  the  suit  in 
addition  to  the  amount  due  on  the  mortgage. 

Where  the  purchaser  under  a  statutory  foreclosure  makes 
valuable  and  permanent  improvements  upon  the  premises, 
under  the  belief  that  he  has  a  good  title,  and  without  notice 
of  the  existence  of  a  judgment  which  is  a  lien  upon  the 
equity  of  redemption,  the  judgment  creditor  applying  to 
redeem,  must,  in  addition  to  the  amount  due  upon  the 
mortgage,  pay  the  enhanced  value  of  the  premises  arising 
from  such  improvements.* 

§  875.  Foreclosure  under  power — Mortgagee's  com- 
pensation.^Under  a  power  of  sale  contained  in  a  mortgage, 
reasonable  and  proper  expenses  incurred  in  advertising  a  sale 
under  such  power  will  always  be  allowed,  whether  or  not  an 
express  provision  therefor  is  made  in  the  mortgage  ;*  and 
this,  it  is  thought,  will  always  include  a  reasonable  sum  for 
legal  advice  regarding  the  sale  and  an  attorney's  fee  for  pre- 
paring the  notice  of  sale.* 


1  Winnebago  Countj  v.  Brones,  Y.)  Pr,  493  (1852) ;   Allen  v.  "Rob- 

68  Iowa.  682  (1886).  bins,  7  R.  I.  33  (1861) ;  Fearus  v. 

«  4  Paige  Ch.  (N.  T.)  58  (1883).  Young,  10  Ves.  184  (1804) ;  Worrall 

3  Benedict  v.  Oilman,  4  Paige  Ch.  v.  Harford,  8  Ves.  4  (1802). 
(N.  Y.)  58  (1833).     See  Bradley  v.  '  Marsh  v.   Morton,   75    PI.    621 

Snyder,  14  PI.  265  (1853);  s.  c.  58  (1874);    Varnum    v.    Meserve,    90 

Am.  Dec.  504.  Mass.  (8  Allen),  158  (1864). 

^  Collins  V.  Standish,  6  How.  (N. 


960  BISBURSEJUENTS    OF   TRUSTEE.     [§§  876-877. 

Where,  however,  the  sale  is  not  completed,  and  the  adver- 
tisement, being  imperfect,  is  withdrawn  after  a  single  publi- 
cation, no  costs  or  attorney's  fees  can  be  collected.*  Where 
a  sale  is  enjoined,  after  it  is  advertised,  and  the  mortgagee 
or  trustee,  in  anticipation  of  the  action  of  the  court, 
incurs  expenses  in  advertising  an  adjournment  of  the 
sale,  he  will  not  be  entitled  to  have  such  expenses  allowed, 
on  the  dissolution  of  the  injunction.' 

§  876.  Expenses  and  disbursements  of  trustee.  — 
The  holder  of  a  mortgage,  containing  a  power  of  sale, 
on  foreclosing  under  such  power,  is  regarded  as  a  trustee, 
and  under  the  general  rule  applicable  to  trustees,  that 
they  shall  not  be  permitted  to  profit  by  their  trust,  he 
will  not  be  entitled  to  recover  compensation  for  his  services, 
in  the  absence  of  a  special  agreement  providing  therefor.* 

Provision  may  be  made  in  the  mortgage  or  trust  deed  for 
compensation  to  the  mortgagee  or  trustee,  and  in  such 
a  case  the  agreement  of  the  parties  will  govern.  Where  a 
provision  is  inserted,  securing  to  the  mortgagee  or  trustee 
a  commission  for  his  services  in  selling  the  property,  such 
compensation  will  be  allowed,  in  addition  to  his  ordinary 
expenses  and  counsel  fees.*  The  mere  fact,  however,  that  a 
party  is  named  as  trustee  in  a  deed  of  trust  raises  no  implied 
promise  on  the  part  of  the  beneficiary  to  pay  him  for  his 
services.' 

§  877.  Taxing  costs  and  disbursements  on  foreclosure 
by  advertisement. — The  New  York  Code  of  Civil  Pro- 
cedure provides,*  that  costs,  in  addition  to  necessary  expenses 
provided  for,  shall  be   allowed  as  follows,  in  a   statutory 


»  See  Collar  v.  Harrison,  30  Mich.  Appeal,  65  Pa.  St.  233  (1870) ;  SIoo 

«6  (1874).  V.  Law,  3  Blatchf.  C.  C.  459  (1856). 

*  Marsh  v.   Morton,   75    HI.   621  *  Lime  Rock  Bank  v.  Phetteplace, 

(1874).     See  Collins  v.  Standish,  6  8  R.  I.  56  (1864),     See  Varnum  v. 

How.  (N.  Y.)  Pr.  493  (1852).  Meserve,   90  Mass.    (8  Allen),    158 

» Allen   V.   Robbins,  7  R.   L  33  (1864). 

(1861).      See  Lime  Rock  Bank  v.  *  Catlin   v.   Glover,  4   Tex.    151 

Phetteplace.  8  R.  I.  56  (1864);  Catlin  (1843). 

V.  Glover,  4  Tex.  151  (1843) ;  Sug-  •  N.  T.  Code  Civ.  Proc.  §  2401. 
den  on  Vendors,  55  ;  also  Parshall's 


§  878.]    TAXING    COSTS STATUTORY   FORECLOSURE.  9G1 

foreclosure;  "(i)  For  drawing  a  notice  of  sale,  a  notice 
of  the  postponement  of  a  sale,  or  an  affidavit,  made  as 
prescribed  in  this  title,  for  each  folio,  twenty-five  cents  ;  for 
making  each  necessary  copy  thereof,  for  each  folio,  thirteen 
cents.  (2)  For  serving  each  copy  of  the  notice  of  sale, 
required  or  expressly  permitted  to  be  served  by  this  title, 
and  for  affixing  each  copy  thereof,  required  to  be  affixed 
upon  the  court  house,  as  prescribed  in  this  title,  one  dollar. 
(3)  For  superintending  the  sale,  and  attending  to  the  execu- 
tion of  the  necessary  papers,  ten  dollars."* 

A  charge  for  drawing  the  notice,  for  making  an  office  copy 
to  keep,  and  for  a  copy  for  the  printer,  is  proper  f  and  it  is 
proper  to  charge  for  thirteen  weeks'  publication.'  But  a 
charge  can  not  be  made  for  a  copy  of  the  notice  served  on  the 
auctioneer,  when  he  is  also  the  counsel  of  the  mortgagee.* 

Where  the  mortgagee  neglected  to  serve  the  notice  of  sale 
on  the  necessary  parties,  and  the  sale  had  to  be  postponed 
for  that  reason,  the  court  held  that  such  mortgagee  could 
not  tax  the  costs  of  the  sale  first  attempted.'  In  taxing  costs 
in  such  a  foreclosure,  matter  inserted  in  the  notice  which  is 
not  required  by  statute,  should  be  excluded  in  determining 
the  number  of  folios  to  be  allowed  ;  and  no  charge  should 
be  allowed  for  serving  the  notice  on  parties  not  required  by 
statute  to  be  served.' 

§  878.  What  disbursements  allowed. — The  Code  pro- 
vides,^ that  there  shall  be  an  allowance  for  disbursements,  not 
exceeding  the  fees  allowed  by  law  for  those  services,  as  fol- 
lows: "(l)  For  publishing  the  notice  of  sale,  and  the  notice 
or  notices  of  postponement,  if  any,  for  a  period  not  exceeding 
twenty-four  weeks.  (2)  For  the  services  specified  in  section 
2390  of  this  act.     (3)  For  recording  the  affidavits  ;  and  also. 


*  Collins  V.  Standish,  6  How.  (N.  *  Hornby    v.    Cramer,    13   How. 
Y.)  Pr.  493,  495  (1835).  (K  Y.)  Pr.  490  (1855) ;  Ferguson  v. 

'  Ferguson  v.   Wooley,   9  N.  Y.  Wooley,  9  N.  Y.  Civ.  Proc.   Kep. 

Civ.  Proc.  Rep.  236  (1880).  236  (1886). 

*  Ferguson  v.   Wooley,  9  N.   Y.  *  Ferguson  v.  Wooley,   9  N.  Y. 
Civ.  Proc.  Rep.  236  (1886).  Civ.  Proc.  Rep.  236  (1886). 

*  Ferguson  v.  Wooley,  9  N.  Y.  ■"  N.  Y.  Code  Civ.  Proc.  §  2403. 
€iv.  I'roc.  Rep.  236  (1886). 

(6n 


962  WHO  MAY  REQUIRE  TAXATION.    [§§  879-880. 

where  the  property  sold  is  situated  in  two  or  more  counties, 
for  making  and  recording  the  necessary  certified  copies 
thereof.     (4)  For  necessary  postage  and  searches."* 

§  879.  Who  may  require  taxation  of  costs  and  dis- 
bursements.— Any  party,  who  is  liable  for  the  costs  of  the 
foreclosure,  may  require  such  costs  to  be  taxed.  Thus,  it 
has  been  held,  that  a  party  who  claims  the  surplus,  as  an  heir 
at  law  of  the  mortgagor,  and  who  has  been  recognized  as  a 
claimant,  by  being  made  defendant  in  an  action  of  inter- 
pleader to  determine  the  ownership  of  the  surplus,  is  a  party 
liable  to  pay  the  costs,  and,  as  such,  entitled  to  require  their 
taxation.' 

The  Code  provides,*  that  "the  costs  and  expenses  must 
be  taxed,  upon  notice,  by  the  clerk  of  the  county  where  the 
sale  took  place,  upon  the  request  and  at  the  expense  of  any 
person  interested  in  the  payment  thereof.  Each  provision 
of  this  act  relating  to  the  taxation  of  costs  in  the  supreme 
court,  and  the  review  thereof,  applies  to  such  a  taxation."* 

It  is  said  in  Ferguson  v.  Wooley,*  that  devisees,  under  the 
recorded  will  of  a  deceased  mortgagor,  and  a  lessee,  under 
a  recorded  lease,  may  be  deemed  grantees  who  should  be 
served  with  the  notice  of  sale ;  where  such  devisees  are 
minors  under  fourteen  years  of  age,  a  notice  should  also  be 
served  on  their  guardian,  and  such  service  may  be  charged 
for. 

§  880.  Costs  in  surplus  proceedings. — In  proceedings 
for  the  distribution  of  surplus  moneys,  motion  fees,  fees  of  the 
referee,  and  disbursements,  are  all  the  costs  that  can  be 
granted  to  the  successful  party.*    The  hearing  before  the 


»  Collins  V.  Standish,  6  How.  (K  »  9  N.  T.   Civ.  Proc.  Rep.  236 

T.)  Pr.  493  (1852).  (1886). 

«  In  re  Moss,  6  How.   (N.  T.)  Pr.  «  Borland  v.  Alleond,8  Daly  (N.  Y.) 

263  (1851).  126  (1878) ;  New  York  Life  Ins.  & 

•  N.  Y.  Code  Civ.  Proc.  §  2403.  Trust  Co.   v.   Vanderbilt,  12  Abb. 

*  The  statute  clearly  contemplates  (N.  Y.)  Pr.  458  (1861) ;  In  re  Gibbs, 
a  taxation  in  such  manner  that  the  58  How.  (N.  Y.)  Pr.  502  (1880) ; 
parties  can  be  heard,  and  not  an  ex  Elwell  v.  Robbins,  43  How.  (N.  Y.) 
pa/rte  taxation.  In  re  Moss,  6  How.  Pr.  108  (1872) ;  German  Sav.  B»ink 
(N.  Y.)  Pr.  263  (1851).  v.  Sharer,  25  Hvp  (N.  Y  )  409  (18«1). 


§  880.]  COSTS  m  surplus  pkoceedings.  9G3 

referee  is  not  a  trial,  and  no  extra  allowance  can  be  made 
therefor,'  The  reason  for  this,  is  thought  to  be,  that 
proceedings  for  the  distribution  of  surplus  moneys  arising 
in  a  foreclosure  by  action,  are  not  special  proceedings, 
but  are  proceedings  in  the  action  and  a  part  of  it.' 

In  Elwell  V.  Robbins,'  Balcom,  J.,  said :  "  It  was  held  in 
New  York  Life  Insurance  &  Trust  Company  v.  Vanderbilt,* 
that  in  disposing  of  surplus  funds  arising  on  the  foreclosure 
of  a  mortgage,  the  court  has  authority  to  allow  to  the  parties 
a  suitable  compensation  for  costs  and  disbursements,  to  be 
paid  out  of  the  funds,  in  addition  to  the  taxable  costs.  This 
is  a  special  proceeding.  It  is  provided  by  statute  that  in  special 
proceedings,  costs  may  be  allowed  in  the  discretion  of  the 
court,  and  when  allowed,  shall  be  at  the  rate  allowed  for  simi- 
lar services  in  civil  actions.'  The  claimants  to  the  surplus 
moneys  are  entitled  to  the  fees  of  the  referee  and  the  fees  of 
the  clerk  in  the  proceeding.  The  only  costs,  aside  from  dis- 
bursements, that  can  be  allowed  the  claimants,  at  the  rate 
allowed  for  similar  services  in  civil  actions,  are  such  as  are 
prescribed  by  the  Code.  The  attorney  of  the  claimants  has 
made  two  motions  in  this  proceeding,  one  for  the  appointment 
of  the  referee,  and  the  other  for  the  confirmation  of  his  report. 
And  by  section  315  of  the  Code,  not  exceeding  $10  for  each 
motion  can  be  allowed  the  claimants,  or  their  attorney,  in 
the  discretion  of  the  court.     I  will  not  say  but  there  may 


McDermott  v.  Hennesy,  9  Hun  (N.  502  (1880) ;  Elwell  v.   Robbins,   43 

Y.)  59  (1876) ;  Hebrank  v.  Colell,  2  How.  (N.  Y.)  Pr.  108  (1872) ;  Ger- 

N.   Y.   Month.    L.    Bui.  39  (1880)  ;  man  Sav.  Bank  v.   Sharer,  25  Hun 

Dudgeon  v.  Smith,  23  N.  Y.  Week.  (N.  Y.)  409  (1881) ;  McDermott  v. 

Dig.  400(1886) ;  Wellington  v.  Ulster  Hennesy,  9  Hun  (N.  Y.)  59  (1876) ; 

County  Ice  Co.,  5  N.  Y.  Week.  Dig.  Dudgeon  v.  Smitli,  23  N.  Y.  Week. 

104  (1877).  In  Elwell  v.  Robbins,  43  Dig.  400  (1880);  Wellington  v.  Ulster 

How.  (N.  Y.)  Pr.  108  (1872),  it  was  County  Ice  Co.,  5  N.  Y.  Week.  Dig. 

held,  that  two  motion  fees  might  be  104  (1877). 

allowed  in  such  proceedings,  one  on  ^  Mutual  Life  Ins.  Co.  v.  Eowen, 

the  appointment  of  a  referee  and  the  47  Barb.    (N.  Y.)  618  (18CG) ;  In  re 

other  on    the    confirmation  of  his  Gibbs,  58  How.  (2\.  Y.)  Pr.  502,  504 

report.  (1880). 

>  See     Borland    v.     Alleond,     8  *  43  How.  (N.  Y.)  Pr.  108  (1872), 

Daly     (N.    Y.)    126     (1878);     In  M2  Abb.  (N.  Y.)  Pr.  458  (1861).  * 

re    Gibbs,    58  How.    (N.   Y.)    Pr.  » Laws  of  1854,  chap.  270,  §3. 


964  WHO  CHARGEABLE  WITH  COSTS.    [§§  881-882. 

be  made  cases  where  the  proceedings  before  the  referee 
should  be  regarded  in  the  nature  of  a  trial,  and  a  trial  fee 
allowed  to  the  claimant  of  the  surplus  money  in  the  discre- 
tion of  the  court." 

§  88i.    Who  entitled  to  costs  in  surplus  proceedings. 

— The  successful  applicant  for  surplus  moneys  is  entitled  to 
have  his  costs  taxed  to  the  extent  set  forth  in  the  preceding 
section  ;  and  where  on  a  complaint  to  foreclose  a  mortgage, 
the  widow  of  the  mortgagor  is  made  a  party  and  answers 
and  submits  to  the  decree  of  the  court,  she  is  entitled  to 
one-third  of  the  surplus  proceeds  of  the  sale  of  the  mort- 
gaged premises  remaining  in  court,  after  satisfying  the 
mortgage  debt,  as  her  equitable  dower,  and  to  have  her 
costs  paid  out  of  the  other  two-thirds.' 

§  882.  Who  chargeable  with  costs  in  surplus  proceed- 
ings.— Generally  the  costs  and  expenses  of  the  proceedings 
for  the  distribution  of  surplus  moneys  are  properly  charge- 
able against  the  proceeds  of  the  mortgage  sale ;'  but  where 
the  facts  are  such  as  to  make  another  rule  more  equitable, 
they  may  be  charged  against  a  party  individually.* 

Where  the  surplus  is  small,  and  unsuccessful  claimants 
have  caused  unnecessary  expenses,  they  may  be  charged 
personally  with  the  costs  ;*  parties  litigating  in  good  faith, 
however,  will  not  usually  be  so  charged."     Thus,  it  has  been 


'  Tabele  v.  Tabele,  1  Johns.  Ch.  the  surplus  moneys  upon  a  sale  of 

(N.  Y.)  45   (1814).    See  Hawley  v.  mortgaged    premises,    who    should 

Bradford,  9  Paige  Ch.  200  (1841).  fail    to  establish  his  claim  on  the 

*  Oppenheimer  v.  Walker,  3  Hun  reference  before  the  master,  might 
(N.  Y.)  31  (1874) ;  s.  c.  5  T.  ife  C.  be  charged  with  such  costs  as  the 
(N.  Y.)  325.  other  parties  were  subjected  to  by 

^  Lawton  v.  Sager,  11  Barb.  (N.  reason    of    such   claim.     And    the 

Y.)  349  (1851) ;  Bevier  v.  Schoon-  parties  succeeding  in  the  reference 

maker,  29  How.   (N.  Y.)  Pr.  411  might  be  allowed  such  costs  as  the 

(1864).  court  should  deem  reasonable  ;  but 

*  Lawton  v.  Sager,  11  Barb.  (N.  no  costs,  unnecessarily  incurred  on 
Y.)  349  (1851) ;  Bevier  v.  Schoon-  such  reference,  or  previous  there- 
maker,  29  How.  (N.  Y.)  Pr.  411  to,  by  any  of  the  parties,  could  be 
(1864).  allowed  on  taxation  or  paid  out  of 

Chancery  rule  136  also  provided,  such  surplus, 

in  respect  to  costs  on  the  reference,  *  Farmers'  Loan  &  Trust  Co.  v. 

that  any  person  making  a  claim  to  Millard,   9  Paige  Ch.  (N.  Y)  620 


§  883.]    DISBURSEMENTS  IN  SURPLUS  PROCEEDINGS.  9G5 

held  that  a  claimant  who  litigates  a  prior  lien  unsuccessfully 
and  in  good  faith,  is  not  chargeable  with  costs;  but  if  he 
files  exceptions  which  are  overruled,  he  will  be  required  to 
pay  the  costs  of  the  appeal.'  And  if  a  creditor  makes  claim 
to  a  larger  amount  than  is  found  upon  the  reference  to  be 
owing  to  him,  or  if  he  adopts  an  unusual  and  expensive 
method  of  procedure,  he  may  be  charged  with  the  costs. 

Where  a  junior  incumbrancer,  who  has  sufficient  reason 
to  believe  th^t  the  prior  lien  will  exhaust  the  surplus,  files 
his  claim  and  subjects  the  prior  incumbrancer  to  unnecessary 
costs,  he  will  be  required  to  pay  such  costs.  The  rule  is 
different,  however,  where  he  acts  in  good  faith  and  has 
sufficient  reason  to  believe  that  the  prior  lien  will  not 
exhaust  the  surplus.'  It  has  been  held  that  a  creditor  who 
was  not  made  a  party  to  the  suit,  and  who  files  a  claim 
to  the  surplus,  will  be  required  to  pay  the  costs  of  proving 
his  claim.* 

§  883.  Disbursements  in  surplus  proceedings. — Although 
disbursements,  in  an  action  to  foreclose  a  mortgage,  are  not 
costs  in  the  strict  sense  of  the  word,  yet  they  may  be 
regarded  as  discretionary,  and  the  courts  usually  allow 
disbursements  not  legally  chargeable  as  costs,  if  they  are  for 
services  actually  rendered  and  are  reasonable  in  amount.* 

Disbursements  usually  include  advancements  necessary 
to  remove  prior  incumbrances  and  to  protect  the  rights  and 
interests  of  the   mortgagee;*  also   taxes,  assessments  and 


(1841) ;  Norton  v.  Whiting,  1  Paige  gher  v.  Egan,  2  Sandf.  (N.  T.)  742 

Ch.  (N.  Y.)  578  (1829).  (1850). 

'  De   LaVergne    v.   Evertson,    1  *  Hill    v.    Eldred,   49    Cal.    398 

Paige  Ch.  (N.  Y.)  181  (1828).  (1874).     See  Marshall  v.  Davies,  78 

» Farmers'  Loan  &  Trust  Co.  v.  N.    Y.    414    (1879) ;    Williams    v. 

Millard,   9  Paige   Ch.  (N.  Y.)  620  Townsend,    31   N.    Y.    411    (1865); 

(1842).  Robinson  v.  Ryan,   25  N.  Y.    320 

»  Abell  V.  Screech,  10  Ves.    355  (1862) ;  Eagle  Fire  Ins.  Co.  v.  Pell, 

(1805).     See  Lawton   v.    Sager,    11  2  Edw.    Ch.   (N.    Y.)    631    (1836); 

Barb.  (N.  Y.)  349  (1851) ;  Bevier  v.  Brevoort     v.     Randolf,      7    How. 

Schoonmaker,  29  How.  (N.  Y.)  Pr.  (N.   Y.)  Pr.    398  (1853) ;    Burr  v. 

411,  ^2  (1864).  Veeder,  3  Wend.  (N.  Y.)  412  (1829); 

*  Benedict  v.  Warriner,  14  How.  Hughes  v.  Johnson,   38  Ark.   296 

(N.    Y.)   Pr.    568    (1857);    Galla-  (1881). 


966  DISBUKSEMENTS  IN  SURPLUS  PROCEEDIN-GS.    [§  883. 


insurance  paid  by  the  mortgagee.'  This  rule  is  applicable 
although  the  mortgage  may  not  contain  a  tax  clause  ;*  and 
a  mortgagee  has  a  right  to  pay  insurance  premiums  for  the 
protection  of  the  estate  mortgaged,  and  to  add  the  amount 
paid  to  the  mortgage  debt,  independently  of  an  express 
agreement  authorizing  such  payment.* 


»  Sidenberg  v.  Ely,  90  N.  T.  257 
(1882) ;  s.  c.  43  Am.  Rep.  163  ;  Wil- 
liams V.  Townsend,  31  N.  Y.  411 
(1865);  Kortright  v.  Cady,  5  Abb. 
(N.  Y.)  Pr.  358  (1857);  8.  C.  23 
Barb.  (N.  Y.)  490  ;  Mix  v.  Hotch- 
kiss,  14  Conn.  33  (1840)  ;  Wright  v. 
Langley,  36  111.  381  (1865). 

» Sidenberg  v.  Ely,  90  N.  Y. 
257  (1883) ;  3.  c.  43  Am.  Rep.  163. 


In  re  Bogart,  28  Hun  (N.  Y.)  466 
(1883) ;  Cook  v.  Kraft,  3  Laus.  (X. 
Y.)  512  (1871).  Compare,  Faure  v. 
Wynans,  Hop.  Ch.  (N.Y.)  283  (1824); 
Barthell  v,  Syverson,  54  loAva,  160 
(1880) ;  Savage  v.  Scott,  45  Iowa, 
130  (1876) ;  Manning  v.  Tuthill,  30 
N.  J.  Eq.  (3  Stew.)  29  (1878). 

» In  re  Bogart,  28  Him  (N.  Y.)  466, 
469  (1882). 


APPENDIX  OF  FORMS. 


No.  I. 
General  Complaint  in  Foreclosure  by  Action. 

\_Title  of  action  contaiiiino^  ) 

tia fries  of  all  ike  parties],  ) 

The  complaint  of  the  plaintiff  in  the  above  entitled  action 
respectfully  shows  to  this  court  (upon  information  and  belief)  : 

That  the  defendant,  C.  D.,  for  the  purpose  of  securing  the 
payment  to  E.  F.,  his  certain  attorney,  executors,  administrators 
or  assigns,  of  the  sum  of  dollars,  with  interest  thereon,  on  or 

about  the         day  of  ,  i8     ,  executed  and  delivered  to  the 

said  E.  F.  a  bond  bearing  date  on  that  day,  sealed  with  his  seal, 
whereby  the  said  C.  D.  did  bind  himself,  his  heirs,  executors  and 
administrators,  in  the  penal  sum  of  dollars,  upon  condition 

that  the  same  should  be  void,  if  the  said  C.  D.,  his  heirs,  executors 
or  administrators  should  pay  to  the  said  E.  F.,  his  certain  attor- 
ney, executors,  administrators  or  assigns,  the  sum  of  money  first 
above  mentioned,  as  follows  :  \_Insert  conditions  of  the  bond 
verbatim,  if  possible']. 

That  it  was  therein  expressly  agreed,^  that  should  any  default 
be  made  in  the  payment  of  the  principal  or  interest,  or  of 
any  part  of  the  said  principal  or  interest,  when  the  same  should 
become  due  and  payable,  according  to  the  conditions  of  said 
bond,  as  above  expressed,  and  should  the  same  remain  unpaid  for 
the  space  of  days  after  the  same  had  become  due  and  payable, 
then  the  said  moneys,  principal  and  interest,  at  the  option  of  the 
said  obligee,  his  executors,  administrators  or  assigns,  should 
become  and  be  due  and  payable  immediately  thereupon,  any 
other  provision  in  said  bond  to  the  contrary  notwithstanding. 

That  the  said  obligor,^  in  and  by  said  bond,  did  covenant  for 
himself,  his  heirs,  executors  and  administrators,  that  the  build- 
ings erected  and  to  be  erected  on  the  mortgaged  premises, 
described  in  the  mortgage  given  as  collateral  to  said  bond  and 
bearing  even  date  therewith,  should  be  kept  insured  against  loss  or 
damage  by  fire,  in  a  sum  not  less  than  dollars,  and  that  the 

policy  therefor  should  be  assigned  to  said  obligee,  his  executors, 
administrators  or  assigns,  and  that  upon  any  default  thereof, 
the  said  obligee,  his  executors,  administrators  or  assigns,  were 


'  Insert  in  case  bond  and  mortgage  contain  an  interest  clause. 

'  Insert  in  case  the  action  is  to  recover  money  paid  for  insurance  premiums. 


968  APPENDIX  OF    FOR:\rs. 

thereby  authorized  to  insure  the  same,  and  to  add  the  sums 
paid  therefor  to  the  moneys  then  due,  or  first  to  become  due,  upon 
said  bond,  and  that  they  should  be  payable  on  demand,  with  interest 
from  the  time  of  such  payment,  and  should  also  be  a  lien  on 
said  premises  secured  by  said  mortgage,  and  added  to  the  sums 
otherwise  secured  thereby ;  and  also  that  in  case  the  taxes,^ 
which  might  thereafter  be  assessed,  taxed  or  levied  against  said 
mortgaged  premises,  were  at  any  time  allowed  to  remain  unpaid 
for  days  after  the  said  taxes  had  become  due  and  payable,  then 
the  said  obligee,  his  executors,  administrators  or  assigns,  might 
pay  the  same,  and  the  sum  so  paid  should  also  be  a  lien  on 
said  mortgaged  premises  and  be  added  to  the  sums  thereby 
secured  and  payable  on  demand,  with  interest. 

That,  as  a  collateral  security  for  the  payment  of  said  indebted- 
ness, the  said  defendants,  C.  D.,  and  M.  D.,  his  wife,  on  the 
same  day  executed,  duly  acknowledged  and  delivered  to  the 
said  E.  F.,  a  mortgage,  whereby  they  granted,  bargained  and 
sold  to  the  said  E.  F.,  his  heirs  and  assigns,  the  following 
described  premises,  with  the  appurtenances,  that  is  to  say : 
\_Here  insert  descriptioji  of  premises  from  7nortgage\,  \i\i\Q\\  mort- 
gage was  duly  recorded  in  the  office  of  the  clerk  of  the  county 
of  ,  on  the       day  of        ,  in  the  year  i8     ,  at     o'clock     m., 

in  book  No.         of  mortgages,  at  page 

That  said  mortgage  contained  the  same  conditions  as  said 
bond,  and  the  further  condition,  that  if  the  mortgagor,  his  heirs 
or  assigns,  should  not  pay  the  moneys  thereby  secured,  according 
to  the  terms  thereof,  then  the  said  E.  F.,  his  executors,  administra- 
tors or  assigns,  were  empowered  to  sell  the  said  mortgaged  prem- 
ises in  due  form  of  law,  and  out  of  the  moneys  arising  from  such 
sale  to  retain  the  amount  due  for  principal,  interest,  taxes,  assess- 
ments and  insurance,  in  and  by  said  bond  and  mortgage  secured 
to  be  paid,  with  the  costs  and  expenses  of  the  proceedings 
thereon,  the  surplus,  if  any  there  should  be,  to  be  returned  to 
the  said  mortgagor,  C.  D.,  his  heirs  or  assigns. 

That  thereafter,  the  said  defendant,  E.  F.,  by  an  instru- 
ment in  writing,^  given  under  his  hand  and  seal,  dated  the  day 
of  i8  ,  and  recorded  in  the  office  of  the  clerk  of  the 
county  of  ,  on  the  day  of  i8  ,  for  a  valuable 
consideration  therein  expressed,  duly  assigned  said  bond  and 
mortgage  to  this  plaintiff,  H.  O.,  who  now  is  and  has  since  been  the 
owner  and  holder  thereof,  and  also  guaranteed  to  the  plaintiff 
that  the  sum  secured  thereby  would  be  paid  when  due,  with 
interest ;  \or  which  said  assignment  also  contain^  a  covenant  in 
the  following  words,  to  wit :  Set  forth  the  covenant  verbatitn']. 

\If  the  bond  and  mortgage  -ji'ere  assigned  as  collateral  security 
only,  such  fact  and  the  actual  interest  and  claim  of  the  plaititiff  should 
be  fully  alleged  here\ 


'  Insert  in  case  money  has  been  paid  for  taxes. 
'  Insert  in  case  the  mortgage  has  been  assigned. 


APPENDIX   OF   FORMS.  969 

That  thereafter,^  the  said  C  D.,  and  M.  D.,  his  wife,  by  their 
deed  of  conveyance,  executed  under  their  hands  and  seals, 
dated  the         day  of  ,  i8     ,  and  recorded  in  the  ofifire  of  the 

clerk  of  the  county  of  ,  in  book  No.         of   deeds,    at 

page  ,  duly  conveyed  the  said  mortgaged   premises    to  the 

defendant,  J.  H.,  subject  to  said  mortgage;  that  the  said  defendant, 
J.  H.,  in  and  by  said  deed  of  conveyance,  and  by  accepting  the 
same,  assumed  said  mortgage  and  covenanted  and  agreed  to  pav 
off  and  discharge  the  same  as  part  of  the  consideration  in  said  deed 
of  conveyance  expressed.     \_0r  set  forth  the  covenant  vei  l)dtiin\. 

And   the  plaintiff   further   shows,   that   the   sum   of 
dollars  became  due  and  payable  by  the  terms  of  said  bond  and 
mortgage,  on  the  day  of  i8     ,  that  the  same  has 

remained  unpaid  for  more  than  days  thereafter,  that  the  said 
plaintiff  has  elected  and  does  elect  that  the  whole  sum  owing 
upon  said  bond  and  mortgage  be  due  and  payable,  and  that 
thereby,  by  the  provisions  of  said  bond  and  mortgage,  the  same 
became  due  and  payable  before  the  commencement  of  this  action. 

And  the  plaintiff  further  shows,  that  the  said  defendants, 
C.  D.,  and  J.  H.,  have  failed  to  comply  with  the  conditions 
of  the  said  bond  and  mortgage,  by  omitting  to  pay  the  sum 
of  dollars,   which    by   the   terms   and   conditions   of  said 

bond  and  mortgage  became  due  and  payable  on  the  day 
of  i8     ;  and  also,  by  omitting  to  pay  the  sum  of  dollars 

for  insurance,  as  required  by  said  bond  and  mortgage,  which  sum 
of  dollars  was  advanced  and  paid  for  such  insurance  by 

this   plaintiff"   on    the  day   of  i8     ,   for  the  payment 

whereof  due  demand  was  made  before  the  commencement  of  this 
action,  the  same  being  also  a  lien  added  to  the  other  claims 
by  said  mortgage  secured  to  be  paid  ;  and  also,  by  omitting  to 
pay  the  sum  of  dollars,  for  taxes  or  assessments,  taxed  or 

assessed  against  the  said  mortgaged  premises,  and  left  unpaid 
for  days  after  the  same  became  due  and  payable,  which  said 
sum  for  taxes  and  assessments  was  thereafter  advanced  and  paid 
by  this  plaintiff  on  the         day  of  ,  i8     ;  and  that  the  same 

is  justly  due  and  unpaid  with  interest  thereon  from  the  day 
of  i8     ,  and  is  also  a  lien  added  to  the  other  claims  by 

said  mortgage  secured  to  be  paid  ;  and  that  there  is  now  justly 
due  to  the  plaintiff  upon  said  bond  and  mortgage  the  sum 
of  dollars,  with  interest  thereon  from  the  day  of  ,  i8  , 
and   the   further   sura   of  dollars   paid   for   insurance   as 

aforesaid,  with  interest  thereon  from  the       day  of  i8     ,  and 

the  further  sum  of  dollars  paid  for  taxes  and  assessments 

as  aforesaid,  with  interest  thereon  from  the         day  of  i8     , 

amounting  in  the  aggregate  to  the  sum  of  dollars  ;  and  that 

there  is  to  become  due  thereon  the  further  sum  of  dollars 

with  interest  thereon  from  the         day  of  i8     . 


'  Insert  in  case  premises  have  been  conveyed  with  assumption  of  payment 
'  mortpatre. 


of  mortgage 


970  APPENDIX    OF    FORMS. 

And  the  plaintiff  further  shows,  that  the  defendants,  R.  P.  and 
D.  O.,  are  infants,  under  the  age  of  fourteen  years  and  reside 
with    their   parents    {or  guardiati)    at  ,  ;   that  the 

defendant,  D,  P.,  is  an  infant  above  the   age  of  fourteen  years, 
residing  with  at  ;  and  that  the  defendant,  O.  S.,  does 

not  reside  within  the  state  of  New  York,  but  at  in 

\^State  residence  if  knouni]. 

And  the  plaintiff  further  shows,  that  no  proceedings  have 
been  had  at  law  or  otherwise,  and  that  no  other  action  has  been 
brought,  to  his  knowledge  or  belief,  for  the  recovery  of  said  sum 
secured  by  said  bond  and  mortgage,  or  for  the  recovery  of  the 
said  mortgage  debt  or  any  part  thereof.  [//  this  is  not  true,  state 
what  proceedings  have  been  taketi]. 

And  the  plaintiff  further  shows,  upon  information  and  belief, 
that  the  defendants,  C.  D.,  M.  D.,  J.  H.,  R.  P.,  X.  Y.  and  D.  P., 
have,  or  claim  to  have,  some  interest  in,  or  lien  upon,  the  said 
mortgaged  premises  or  some  part  thereof,  which  interest  or 
lien,  if  any,  has  accrued  subsequently  to  the  lien  of  said  mort- 
gage. 

[If  parties  with  paramount  liens  are  made  defendants  for  the 
purpose  of  having  them  ascertained,  such  liens  should  be  fully 
stated  here\ 

Wherefore,  the  plaintiff  demands  judgment,  that  the  defendants 
and  all  persons  claiming  under  them,  or  either  or  any  of  them, 
subsequently  to  the  commencement  of  this  action,  and  every 
person,  whose  conveyance  is  subsequent  or  subsequently  recorded, 
may  be  barred  and  foreclosed  of  all  right,  title,  claim,  lien  and 
equity  of  redemption  in  said  mortgaged  premises ;  that  the 
said  mortgaged  premises,  or  so  much  thereof  as  may  be  sufficient 
to  raise  the  amount  due  to  the  plaintiff  for  all  sums  paid  for 
insurance,  taxes,  or  assessments,  and  also  for  principal,  interest 
and  costs,  and  which  may  be  sold  in  parcels  without  material 
injury  to  the  parties,  may  be  decreed  to  be  sold  according  to  law; 
that  out  of  all  the  moneys  arising  from  the  sale  thereof,  the 
plaintiff  may  be  paid  the  amount  due  on  said  bond  and  mortgage 
with  interest  to  the  time  of  such  payment,  and  the  costs  and 
expenses  of  this  action,  so  far  as  the  amount  of  such  moneys 
properly  applicable  thereto  will  pay  the  same  ;  that  the  officer 
making  such  sale  be  directed  to  pay  from  the  proceeds  thereof, 
all  taxes,  assessments  and  water  rates,  which  are  liens  on  the 
property  sold  ;  that  the  defendants,  C.  D.,  E.  F.  and  J.  H.,  may 
be  adjudged  to  pay  any  deficiency  which  may  remain  after 
applying  all  of  said  moneys  so  applicable  thereto;  and  that  the 
plaintiff  may  have  such  other  or  further  relief,  or  both  in  the 
premises,  as  shall  be  just  and  equitable. 

T.  R., 

Plaintiff's  Attorney, 
\^Add  verification  in  the  usual  for  m\ 


APPENDIX    OF   FORMS.  971 

No.   2. 

Complaint  to  Foreclose  Mortgage  Executed  by  Infants 
Pursuant  to  Order  of  Court. 

\_Title  of  action  containing  \    .  , 
names  of  all  the  parties],  ) 

The  complaint  of  the  plaintiff  in  the  above  entitled  action 
respectfully  shows  to  this  court  (upon  information  and  belief) : 

That  a  petition  was  heretofore  presented  to  this  court  by  the 
defendant,  D.  P.,  an  infant  over  fourteen  years  of  age,  and  by 
the  defendants,  O.  P.,  R.  P.  and  T.  P.,  infants  under  the  age 
of  fourteen  years,  by  the  defendant,  C.  M.  P.,  their  mother  and 
next  friend,  praying  for  the  mortgaging  of  all  the  right,  title  and 
interest  of  said  infants  in  and  to  the  real  estate  hereinafter 
mentioned  and  described  ;  and  that  such  proceedings  were 
afterwards  had  in  said  court  upon  the  said  petition,  that  an 
order   of   this  court  was   made   on    the         day  of  ,  i8     , 

whereby  M.  C.  was  appointed  the  special  guardian  of  said  infants 
for  the  purposes  of  such  application,  upon  his  giving  the  proper 
security  therein  required;  and  that  such  security,  duly  executed, 
justified  and  approved,  was  subsequently  filed  by  said  guardian 
in  the  proper  office. 

That  by  an  order  of  said  court  in  said  proceedings,  made  on 
the         day  of  ,  i8     ,  the  said  M.  C.  was  authorized  and 

empowered  to  contract  for  the  mortgaging  of  all  the  right,  title 
and  interest  of  the  said  infants  in  the  said  real  estate,  for  an 
amount  not  exceeding  that  specified  in  the  referee's  report, 
referred  to  in  said  order,  and  upon  the  terms  and  conditions 
therein  mentioned,  to  wit  :  for  dollars,  payable  in         years 

at  least,  or  in  a  longer  time,  at  the  rate  of         interest  per  annum. 

That  in  pursuance  of  the  last  mentioned  order,  the  said  special 
guardian  afterwards  made  his  report  to  the  said  court,  which 
report  was  dated  the         day  of  ,  18     ,  whereby  he  reported 

that  he  had  entered  into  an  agreement  with  this  plaintiff,  subject 
to  the  approval  of  said  court,  for  the  mortgaging  to  said  plaintiff 
of  all  the  right,  title  and  interest  of  said  infants  in  and  to  the 
said  real  estate,  upon  the  terms  and  conditions  therein  mentioned, 
to  wit :  providing  for  the  execution  by  said  guardian  of  a  mortgage, 
in  the  name  of  said  infants,  to  said  plaintiff,  for  the  amount  and 
time  and  upon  the  terms  and  conditions  upon  which  said  mortgage 
was  to  be  executed,  as  hereinafter  set  forth. 
(  That  by  another  order  of  said  court,  made  in  said  proceedings 
on  the         day  of  ,  18     ,  it  was  ordered,  that  the  said  report 

of  said  special  guardian  and  the  agreement  therein  mentioned, 
be,  and  the  same  were  thereby,  ratified  and  confirmed  ;  and  that 
the  said  special  guardian,  in  the  names  of  said  infants,  execute, 
acknowledge  and  deliver  to  the  said  plaintiff,  a  good  and  sufficient 
mortgage,  upon  the  terms  and  conditions  provided  by  said 
agreement,  of  all  the  estate,  right,  title  and  interest  of  said  infants 


972  APPENDIX    OF   FOKMS. 

in  and  to  the  said  premises,  being  the  fee  simple  thereof,  subject 
to  their  mother's  dower  interest  therein,  as  hereinafter  mentioned, 
upon  the  said  plaintiff's  complying  with  the  said  terms  and 
conditions  of  the  said  agreement  by  which  such  mortgage  was  to 
be  delivered,  to  wit :  the  payment  to  said  special  guardian  by 
him  of  the  sum  of  dollars. 

That  the  said  plaintiff  thereafter  complied  with  the  said  terms 
and  conditions  of  said  agreement  on  his  part  to  be  performed,  and 
paid  the  said  special  guardian  the  sum  of  dollars. 

That  the  said  infants,  by  their  said  special  guardian,  pursuant  to 
the  several  orders  aforesaid,  and  in  pursuance  of  the  statute  in 
such  case  made  and  provided,  and  in  consideration  of  the  sum 
of  dollars,  paid  to  their  said  special  guardian  as  aforesaid, 

and  the  said  C.  M.  P.,  the  mother  of  said  infants,  who  had  d 
vested  dower  right  in  said  premises  as  the  widow  of  L.  P , 
deceased,  the  father  of  said  infants,  in  consideration  of  the  sum 
paid  to  said  special  guardian  and  of  one  dollar  to  her  in  hand 
paid,  as  a  consideration  for  releasing  her  said  dower  interest  in 
said  premises  to  said  plaintiff,  (the  said  C.  M.  P.  thereby  agreeing, 
in  consideration  aforesaid,  that  she  would  not  assert  or  set  up  her 
dower  interest  in  said  premises  as  against  said  mortgage  and 
against  the  said  plaintiff,  the  mortgagee  therein  named,  his 
executors,  administrators  or  assigns),  on  the  day  of  ,  i8  , 
as  security  for  the  payment  of  said  principal  sum  of  dollars, 

with  interest  thereon,  as  hereinafter  mentioned,  did  execute,  duly 
acknowledge  and  deliver  to  the  said  plaintiff  a  mortgage,  whereby 
they  granted,  bargained  and  sold  to  the  said  plaintiff  the  following 
described  premises,  with  the  appurtenances,  that  is  to  say  :  \Here 
insert  description  of  premises  from  mortgage\,  upon  the  express 
condition,  that  if  the  said  parties  of  the  first  part  should  well  and 
truly  pay  unto  the  said  party  of  the  second  part,  his  executors, 
administrators,  or  assigns,  the  sum    of  dollars  in         years 

from  the  date  of  said  mortgage,  with  interest  thereon  at  the  rate 
of  per  centum  per  annum,  payable  semi-annually   from  the 

date  thereof,  and  should  keep  the  buildings  erected,  or  thereafter 
to  be  erected  upon  said  premises,  insured  in  some  solvent 
incorporated  fire  insurance  company  of  this  state,  against  loss  or 
damage  by  fire,  in  the  sum  of  at  least  dollars,  and  should 

assign  and  deliver  the  policy  or  policies  of  such  insurance,  and 
the  receipts  or  certificates  of  renewal  thereof,  to  the  said  party  of 
the  second  part,  his  executors,  administrators,  or  assigns,  so  and 
in  such  manner  and  form  that  they  should  at  all  time  and  times, 
until  the  full  payment  of  the  said  money,  have  and  hold  said 
policies  as  a  collateral  and  full  security  for  the  payment  of  all 
money  due  or  to  become  due  upon  said  mortgage,  and  should, 
during  all  the  time,  until  the  said  moneys  secured  by  said  mortgage 
should  be  fully  paid  and  satisfied,  pay  and  discharge,  immediately 
after  they  should  become  due  or  payable,  all  taxes,  water  rates, 
assessments,  or  other  charges  which  might  be  levied,  laid,  or 
assessed  upon  the  above  described  premises  or  any  part  thereof; 


APPENDLX    OF   FOEMS.  973 

then  the  said  mortgage  and  the  estate  tliereby  granted,  should 
cease,  determine  and  become  null  and  void. 

And  the  plaintif¥  further  shows,  that  the  said  mortgage  was  duly 
recorded  in  the  office  of  the  clerk  of  the   county  of  ,  on 

the  day  of  ,  i8     ,  at  o'clock  m.,  in  book 

No.  of  mortgages,  at  page 

[Adapt  the  remainder  of  this  form  from  Form  No.  i]. 


No.  3. 

Complaint  to  Foreclose  Savings  and  Loan  Association 

Mortgage. 

\_Title  of  action  containing  ) 
names  of  all  the  parties\  \ 

The  plaintiff  in  the  above  entitled  action  complains  of  the 
defendants  therein,  and  states  to  the  court  (upon  information 
and  belief)  : 

That  the  plaintiff  is  a  domestic  corporation,  located  at  , 

and  duly  constituted,  organized  and  incorporated  in  pursu- 
ance of  an  act  entitled,  "  An  Act  for  the  Incorporation  of 
Building,  Mutual  Loan  and  Accumulating  Fund  Associations," 
passed  April  loth,  1851,  and  of  the  act  or  acts  supplementary 
thereto,  and  amendatory  thereof  ;  that  the  defendant,  C.  D.,  on  or 
about  the       day  of  ,18     ,  executed  under  his  hand  and  seal, 

and  delivered  to  this  plaintiff,  a  bond,  dated  on  that  day,  in  the 
penal  sum  of  dollars,  with  the  conditions  therein  written 

in  substance,  that  if  the  said  obligor  in  said  bond  named,  would 
pay  or  caused  to  be  paid  to  the  association  or   to  its  suc- 

cessor or  assigns,  the  sum  of  dollars  in  manner  following, 

that  is  to  say:  the  sum  of  dollars  and         cents  contribution 

or  principal,  and  dollars  and         cents  interest  on       shares 

of  the  capital  stock  of  said  association,  each  and  every  week  from 
the  date  thereof,  until  the  dues  and  dividends  accrued  on  said 
shares  should  equal  the  said  principal  sum  of  dollars,  including 
premiums  paid  for  any  loan,  by  the  consent  of  such  holder;  and 
also  all  dues,  fines  and  penalties  that  might  be  imposed  upon  the 
said  obligor,  as  a  member  of  said  association,  pursuant  to  the 
articles,  rules  and  regulations  thereof,  to  be  paid  into  the  treasury 
of  said  association  on  each  and  every  {^day)  thereafter,  until  the 
said  sum    of  dollars  has  been  fully  paid  as  aforesaid,  then 

the  said  bond  to  be  void,  else  to  remain  in  full  force  and  virtue  ; 
and  with  the  agreement  also  therein  written,  in  substance,  that  in 
case  any  of  said  installments  of  principal  or  interest,  or  any  part 
thereof,  or  any  fines  or  penalties  imposed  as  aforesaid,  should 
remain  unpaid  for  months  after  the  same  should  become  due, 
then  the  whole  of  said  principal  sum,  together  with  the  unpaid 
interest,  dues,  penalties,  fines  and  assessments  thereon,  should 
become  due  and  payable  forthwith. 


974  APPENDIX   OF   FOKMS. 

And  to  secure  the  payment  of  the  principal,  interest,  dues,  fines 
and  premiums  mentioned  in  the  conditions  of  said  bond,  the  said 
C.  D.  and  M.  D.,  his  wife,  did  at  the  same  time  execute  under 
their  hands  and  seals,  duly  acknowledge  and  deliver  to  this 
plaintiff  a  mortgage,  bearing  even  date  with  said  bond,  whereby 
they  granted,  bargained  and  sold  to  this  plaintiff,  its  successors  and 
assigns,  the  following  described  premises,  with  the  appurtenances, 
that  is  to  say  :    {Here  insert  description  of  premises  from   mort- 

That  said  mortgage  contained  the  same  conditions,  as  the  said 
bond,  and  the  further  condition,  that  if  said  mortgagors  should 
not  pay  the  moneys  thereby  secured,  according  to  the  terms 
thereof,  then  the  said  plaintiff,  or  its  successors,  or  assigns,  were 
empowered  to  sell  the  mortgaged  premises  in  due  form  of  law, 
and  out  of  the  moneys  arising  from  such  sale  to  retain  the  amount 
then  due  upon  said  bond  and  mortgage,  secured  to  be  paid, 
together  with  the  costs  and  charges  of  the  proceedings  thereon, 
the  surplus,  if  any  there  should  be,  to  be  returned  to  the  said  C.  D., 
his  heirs  and  assigns,  which  said  mortgage  was  duly  recorded  in 
the  office  of  the  clerk  of  the  county  of  ,  on  the  day  of  , 
1 8       ,  at  o'clock  M.,  in  book  No.  of  mortgages,  at 

page 

That  at  the  time  of  the  execution  and  delivery  of  said  bond 
and  mortgage,  as  aforesaid,  the  said  C.  D.  was,  and  still  is,  a 
member  of  said  association,  and  is  the  owner  of  shares  of 

the  capital  stock  thereof  ;  that  said  bond  and  mortgage  were 
given,  as  aforesaid,  to  secure  the   indebtedness  of  dollars 

upon  of  such  shares  loaned  to  the  said  C.  D. 

That  the  capital  stock  of  said  association  consists  of  shares 
of  dollars  each  ;  that  by  the  rules  and  regulations  of  said 

association  it  was  provided,  among  other  things,  that  the  said 
capital  stock  should  be  payable  in  weekly  installments  of  cents 
per  share,  from  and  including  the  first  day  of  membership  ;  and 
that  after  being  awarded  a  loan,  every  member  should  pay  to  the 
said   association,  weekly,  the  full   sum   of  cents   interest 

per  share  on  each  and  every  share  of  said  loan ;  and  that 
every  member,  neglecting  to  pay  said  installments  regularly, 
should  forfeit  and  pay  to  said  association  cents  per  week  as 

a  fine  for  each  and  every  share  of  such  stock  held  by  him,  and 
for  neglecting  to  pay  said  weekly  interest,  should  forfeit  and  pay 
as  a  fine  the  full  sum  of  cents  per  share  of  the  loan  to  him, 
for  each  and  every  week  he  should  be  in  default  of  such  weekly 
payments. 

That  the  said  C.  D.  failed  to  comply  with  the  conditions  of 
said  bond  and  mortgage  by  omitting  to  pay  the  sum  of  dollars 
contribution  or  principal,   and  dollars    interest,    which 

became  due  on  the  day  of  ,  i8       ;  that  more  than 

three  months  have  elapsed  since  the  same  became  due ;  that 
the  same  and  all  installments  of  principal  and  interest  which  have 
become  due  since  that  time,  still  remain  unpaid  ;  and  thit  there 


APPENDIX   OF   FOEMS.  975 

remains  unpaid  on  said  bond  and  mortgage  the  sum  of  dollars 
principal,  together  with  dollars  interest,  and  dollars 

dues  and  dollars  fines,  amounting  in  the  aggregate  to  the 

sum  of  dollars,  with  interest  thereon  from  the  day 

of  ,  i8    . 

And  the  plaintiff  further  states  (upon  information  and  belief) 
that  the  defendants,  C.  D.,  M.  D.  and  J.  H.,  have,  or  claim  to  have, 
some  interest  in  or  lien  upon  said  mortgaged  premises,  or  some  part 
thereof,  which  interest  or  lien,  if  any,  has  accrued  subsequently 
to  the  lien  of  said  mortgage. 

And  the  plaintiff  further  shows,  that  no  proceedings  have  been 
had  at  law  or  otherwise,  and  no  action  has  been  brought  to  the 
knowledge  or  belief  of  said  plaintiff,  for  the  recovery  of  said  sum 
secured  by  said  bond  and  mortgage,  or  for  the  recovery  of  said 
mortgage  debt,  or  any  part  thereof.  \If  not  true,  state  what 
proceedings  have  been  taken]. 

Wherefore,  the  plaintiff  demands  that  the  defendants,  and  all 
parties  claiming  under  them,  or  either  or  any  of  them,  subsequently 
to  the  commencement  of  this  action,  and  every  person  whose 
conveyance  is  subsequent  or  subsequently  recorded,  may  be  barred 
and  foreclosed  of  all  right,  title,  claim,  lien  and  equity  of 
redemption  in  said  mortgaged  premises  and  every  part  thereof ; 
that  the  said  mortgaged  premises,  or  so  much  thereof  as  may  be 
sufficient  to  raise  the  amount  due  to  the  plaintiff  for  all  sums  paid 
for  taxes,  assessments,  or  insurance,  and  also  for  principal,  interest, 
fines  and  costs,  and  which  maybe  sold  in  parcels,  without  material 
injury  to  the  parties,  may  be  decreed  to  be  sold  according  to  law  ; 
that  out  of  all  the  moneys  arising  from  the  sale  thereof,  the 
plaintiff  may  be  paid  the  amount  due  on  said  bond  and  mortgage, 
and  the  said  interest  and  fines,  with  the  interest  thereon  to  the 
time  of  such  payment,  together  with  the  costs  and  expenses  of 
this  action,  so  far  as  the  amount  of  such  moneys  properly  appli- 
cable thereto  will  pay  the  same  ;  that  the  officer  making  such  sale 
be  directed  to  pay  from  the  proceeds  thereof  all  taxes,  assessments 
and  water  rates,  which  are  liens  upon  the  property  sold  ;  that 
the  defendant,  C.  D.,  may  be  adjudged  to  pay  any  deficiency 
which  may  remain  after  applying  all  of  said  moneys  so  applicable 
thereto  ;  and  that  the  plaintiff  may  have  such  other  or  further 
relief,  or  both  in  the  premises,  as  shall  be  just  and  equitable. 

T.  R., 

Flaintiff's  Attorney. 

County  of  ,  ss. : 

H.  F.  being  duly  sworn,  says  that  he  is  the  of  the 

plaintiff,  in  the  above  entitled  action  ;  that  the  foregoing  complaint 
is  true  to  his  own  knowledge,  except  as  to  the  matters  therein 
stated  to  be  alleged  upon  information  and  belief,  and  that  as  to 
those  matters  he  believes  it  to  be  true  ;  that  the  reason  why  this 
affidavit  is  not  made  by  the  plaintiff  is,  that  the  plaintiff  is  a 
corporation  ;  that  deponent  is  an   officer  of  said  corporation,  to 


976  APPENDIX  OF  roiiMS. 

■^rJt :  the  thereof  ;  that  deponent's  knowledge  of  the 

facts  stated  in  said  complaint  is  derived  from  the  books  and  papers 
of  said  association,  which  are  kept  under  the  immediate  super- 
vision of  deponent,  and  from  the  records  of  the  county  clerk's 
office. 

l/ura/].  H.  F. 

No.  4. 

General  Form  of  Answer. 

\^Ttile  of  the  actio n\ 

The  defendant,  C.  D.,  for  his  answer  to  the  complaint  of  the 
plaintiff  herein,  denies  each  and  every  allegation  therein  con- 
tained, and  further  denies  that  the  plaintiff  is  the  lawful  owner  of 
the  bond  and  mortgage  mentioned  in  said  complaint,  or  of  either 
of  them,  or  that  he  has  any  interest  whatever  in  said  bond  and 
mortgage,  or  in  the  moneys  thereby  secured,  or  pretended  to  be 
thereby  secured. 

[And  for  a  further  answer  and  defence,  this  defendant  alleges 
and  states  to  the  court,  that  she  is,  and  at  the  time  of  the  execu- 
tion of  the  bond  and  mortgage  mentioned  in  said  complaint,  was  a 
married  woman  ;  that  the  said  bond  and  mortgage  wer^  not  exe- 
cuted for  any  debt  or  liabihty  of  this  defendant,  nor  for  any 
advance  or  loan  to  her,  nor  for  any  benefit  or  advantage  to  her 
or  to  her  estate  whatever,  but  were  given  solely  as  collateral  security 
for  an  antecedent  pretended  indebtedness  of  her  husband  ;  that 
the  said  mortgage  was  given  upon,  and  covers  the  sole  and  sep- 
arate real  estate  of  this  defendant,  in  which  her  husband  has  no 
interest,  and  had  none  when  said  mortgage  was  given ;  that 
this  mortgage  was  executed  by  this  defendant  under  and  by  the 
direction,  coercion,  duress  and  threats  of  the  plaintiff  and  her 
said  husband,  and  was  not  her  free  and  voluntary  act  ;  and  this 
defendant,  therefore,  insists  that  the  said  bond  and  mortgage  are 
void  and  of  no  effect,  and  no  lien  or  charge  upon  her  said  real 
estate]. 

And  this  defendant  further  answering,  shows,  that  the  loan 
alleged  in  the  complaint,  was  made  to  the  defendant  by  the 
plaintiff  on  the  corrupt  and  unlawful  agreement  between  them, 
that  the  plaintiff  should  reserve  and  secure  to  himself,  and  the 
defendant  would  pay  to  him,  for  the  use  of  said  sum,  a  greater 
sum  than  the  rate  of  per  centum  per  annum  ;  to  wit :  the 

rate  of  per  centum  per  annum  (besides  a  commission  of  per 
centum  on  the  face  of  said  bond  and  mortgage). 

That  said  sum  was  deducted  and  reserved  from  the  amount  of 
said  bond  and  mortgage  by  said  plaintiff,  and  the  balance  only 
paid  to  said  defendant  ;  that  is  to  say,  that  this  defendant  agreed 
to  pay,  and  the  plaintiff  agreed  to  receive,  dollars    for  said 

loan,  the  plaintiff  reserving  and  securing  to  himself  for  the  loan 
of  money   on    said    bond     and    mortgage,    until    the    maturity 


APPENDIX    OF   FOEMS.  977 

thereof,  dollars.*    [Or,  state  any  other  interest  or  compensation 

agreed  on;  and  the  payment  of  it,  if  it  has  been  paid]. 

Wherefore,  this  defendant  demands  that  the  complaint  in  this 
action  be  dismissed  with  costs. 

J.  Z., 
Attorney  for  Defetidant  C.  D. 
[Office  and  post-office  address\, 
[Add  verification  in  the  usual  form\. 


No.  5. 
Infant  Defendant's  Answer. 

[Title  of  the  action]. 

The  defendants  R.  P.  and  D.  P.,  by  M.  N.,  their  guardian 
ad  litem,  answering  the  complaint  of  the  plaintiff  above  named, 
say,  that  they  are  strangers  to  all  and  singular  the  matters  and 
things  in  said  complaint  contained  ;  that  these  defendants  are 
infants  under  the  age  of  twenty-one  years,  and  claim  such  an 
interest  in  the  premises  described  in  said  complaint  as  they  are 
entitled  to,  and  submit  their  rights  to  the  court  for  protection. 
Dated,  the         day  of  ,  18     . 

V.  O., 

Attorney  for  Guardian  ad  litem. 
[Office  and  post-office  address]'. 


No.  6.- 

Notice  of  Object   of  Action,  with  Notice  of  No   Per- 
sonal Claim. 

[Title  of  the  action]. 

To  the  above  named  defendant,  [name]  : 

Take  notice,  that  the  summons  herewith  served  upon  you  in 
this  action,  is  issued  upon  a  complaint  praying  for  the  tore- 
closure  of  a  mortgage  executed  by  C.  D.,  and  wife,  to  E.  F., 
dated    the  day   of  ,  18     ,  and    recorded    in    the   office 

of  the  clerk  of  the  county  of  ,  in  book  No.      of  mortgages,  at 

page         ,  on  the         day   of  ,  18     ,    at      o'clock      m.,    to 

secure    the  payment  of   the   sum    of  dollars,  with   interest 

thereon  from  the  day  of  ,  18     ,  (and  which  mortgage 

has  been  duly  assigned  to  this  plaintiff). 

That  there  is  now  due  and  owing  to  this  plaintiff,  on  said 
bond  and  rnortgage,  the    sum   of  dollars,    with    interest 

thereon  from  the         day  of  .  18     ;  that  the  following  is  a 

description  of  the  mortgaged  premises  :     [Insert  description  from 
mortgage]. 

»  See  MaoDing  v.  Tyler,  21  N.  Y.  5G7  (18G0). 


978  APPENDIX    OF    FORMS. 

That  no  personal  claim  is  made  against  you,  nor  against  any 
defendant,  except  against  the  defendants,  C.  D.  and  J.  H. 
Dated  the        day  of  ,  i8     . 

T.  R.,  Plaintiff's  Attorney. 

\Office  and  post-office  addresi\. 


No.  7. 
Notice  of  Pendency  of  Action. 

\Title  of  the  action\ 

Notice  is  hereby  given,  that  an  action  has  been  commenced 
and  is  now  pending  in  this  court,  upon  the  complaint  of  the 
above  named  plaintiff,  against  the  above  named  defendants,  for 
the  foreclosure  of  a  mortgage,  bearing  date  the  day  of  ,18  , 
executed  by  C.  D.,  and  M.  D.,  his  wife,  to  E.  F.,  and  recorded  in 
the  ofhce  of  the  clerk  of  the   county  of  ,  at  ,  on 

the      day   of         ,18     ,  in  book  No.       of  mortgages,  at  page     , 
at  o'clock  in  the  noon  (which  said  mortgage  has  been 

duly  assigned  by  said  E.  F.,  to  the  above  named  H.  O.,  who  is 
the  plaintiff  herein). 

That  the  mortgaged  premises  affected  by  this  foreclosure  were, 
at  the  time  of  the  commencement  of  this  action,  and  at  the  time 
of  filing  this  notice  are,  situated  in  the  county  of  ,  and  that 

they   are   described    in  the    said    mortgage    as    follows,    to    wit : 
\IIere  insert  description  of  prefuises  from  7nortgage\ 

The  clerk  of  the  county  of  will  please  index  this  notice 

against  the  names  of  the  defe,ndants,  C.  D.,  J.  H.  and  R.  P. 

Dated  the         day  of  ,  18     . 

T.  R.,  Plaintiffs  Attorney. 

\Office  and  post-office  address\. 


No.  8. 
County  Clerk's  Certificate  of  Filing  Lis  Pendens. 

County  of  ,  ss. : 

I,  clerk  of  the  county  of  ,  and  of  the  court 

thereof,  being  a  court  of  record  and  having  a  seal,  do  hereby 
certify,  that  I  have  compared  the  copy  of  the  notice  of  pendency 
of  action  in  the  above  entitled  action  hereto  annexed,  with  the 
original  thereof,  now  on  file  and  record  in  my  office,  and  that 
the  same  is  a  transcript  thereof  and  of  the  whole  of  said  original. 

And  I  do  hereby  further  certify  that  the  said  notice  of  pen- 
dency of  action  was  filed  and  recorded  in  my  said  office,  on 
the         day  of  ,  18     . 

In  witness  whereof,  I  have  hereunto  set  my  hand  and  affixed 
the  seal  of  my  said  office,  this         day  of  ,  18     , 

\,Seal\  {County  Clerk\. 


APPENDIX    OF   FOKMS.  979 

No.  9. 

Affidavit  of  Filing  Notice  of  Pendency  of  Action 
Preliminary  to  Judgment. 

[7VV/f  of  the  actio?i\. 
County  of  ,  ss.  : 

O.  J.,  being  duly  sworn,  says  that  he  resides  in  the  of         , 

in  the  county  of  ,  and  that  he  is  (managing  clerk  for  T.  R.), 

the  attorney  for  the  plaintiff  in  the  above  entitled  action  ;  that 
this  action  was  brought  to  foreclose  a  mortgage  upon  real  property 
situated  in  the  county  of 

That  the  whole  sum  secured  by  said  mortgage  is  now  due  and 
payable,  {or,  that  an  installment  of  dollars  of  the  principal 

of    said   mortgage,    and   interest    thereon    from    the  day 

of  ,  18     ,  is  now  due  and  payable,    and  that  the  residue 

thereof,  being  the  sum  of  dollars,  and  interest  thereon  from 

the         day  of  ,  18     ,   will  become  due  and  payable  on  the 

day  of  ,  18     ). 

That  the  complaint  herein  was  filed  in  the  office  of  the  clerk  of 
the  county  of  ,  on  the       day  of  ,  18     ,  and  that  a  notice 

of  the  pendency  of  this  action,  containing  the  names  of  all  the 
parties  thereto,  the  object  of  the  action,  the  date  of  the  said 
mortgage,  the  names  of  the  parties  thereto,  the  time  and  place  of 
recording  the  same,  and  a  description  of  the  mortgaged  premises, 
and  containing  correctly  and  truly  all  the  particulars  required  by 
law  to  be  stated  in  such  notice,  was  more  than  twenty  days  since, 
viz.:  on  the         day  of  ,  18     ,   filed  and  recorded   in   the 

office  of  the  clerk  of  the  county  of  ,  that  being  the  county 

in  which  the  mortgaged  premises  are  situated,  which  filing  was  at 
or  immediately  after  the  time  of  filing  said  complaint  therein  as 
required  by  law,  and  more  than  twenty  days  since  ;  and  that  since 
the  filing  of  said  notice  the  complaint  in  this  action  has  not  been 
amended  by  making  new  parties  to  the  action,  nor  so  as  to 
affect  other  property  not  described  in  the  original  complaint,  nor 
so  as  to  extend  the  claims  of  the  plaintiff  as  against  the  mortgaged 
premises. 

That  all  of  the  defendants  haA-e  been  duly  served  with  the 
summons,  or  have  duly  appeared  herein  by  their  respective 
attorneys,  as  will  more  fully  appear  by  the  affidavits  of  service 
and  notices  of  appearance  which  are  hereto  annexed. 

That  none  of  the  defendants  are  infants  or  absentees  {or,  that 
none  of  the  defendants  are  infants,  except  the  defendant,  R.  P., 
who  has  appeared  by  his  guardian  ad  litem,  and  that  none  of  the 
defendants  are  absentees,  except  the  defendant,  O.  S.,  who  has 
been  duly  served  with  the  summons  by  publication  thereof,  under 
an  order  of  this  court,  proof  of  which  service  is  hereto  annexed). 

That  the  time  to  answer  has  expired  as  to  all  of  the  defendants, 
and  that  no  answer  or  demurrer  has  been  received  from  any 
defendant    (except    the    usual    general    answer   of    the    infant 


y80  APPENDIX   OF   FOEMS. 

defendant,  D.  P.,  who  answers  by  his  gnavrlian,  and  who  does  not 
controvert  aTiy  of  the  allegations  of  the  complaint;  and  except 
al?o,  the  answer  of  the  defendant,  C.  D.,  the  issues  raised  by 
which  have  been  duly  tried  and  decided  in  favor  of  this  plaintiff 
by  Hon,  L.  Q.,  a  justice  of  this  court,  whose  findings  are  hereunto 
annexed). 

l/ura/].  \_Signature]. 

No.  lo. 

Notice  of  Application  for  Order  of  Reference  and 

Judgment. 
[Title  of  the  action]. 

Take  notice,  that  on  all  of  the  papers  and  proceedings  in  this 
action  and  on  the  affidavits  hereto  annexed,  copies  of  which 
are  herewith  served  upon  you,  the  plaintiff  will  apply  to  this 
court  at  a  term  thereof,  to  be  held  at  the  court  house,  in  the 
city  of  ,  on  the  day  of  ,  i8     ,  at  o'clock  in 

the  noon  of  that  day,  or  as  soon  thereafter  as  counsel  can  be 
heard,  for  the  relief  demanded  in  the  complaint ;  and  also  for  an 
order  referring  this  action  to  some  suitable  person  to  compute  the 
amount  due  to  the  plaintiff  for  principal  and  interest  on  the  bond 
and  mortgage  set  forth  in  the  complaint,  (and  also  to  ascertain 
and  compute  the  amount  due  to  such  of  the  defendants  as  aie 
prior  incumbrancers  of  the  mortgaged  premises),  [if  the  whole 
amount  secured  by  the  mortgage  has  not  become  due,  or  if  any  of  the 
defendants  are  infatits  or  absentees,  the  notice  of  motion  should 
folloxv  the  language  of  the  order  in  Form  No.  ii],  and  for  such 
other  and  further  relief  as  may  be  just.^ 
Dated  the        day  ,  i8    . 

T.  R., 

Flaifitiff's  Attorney. 
[Office  and  tosi-office  addressX. 
To  J.  Z., 

Attorney  for  Defendant^  \fiame\. 


No.  II. 
Order  of  Reference,  Preliminary  to  Judgment. 

At  a  term,  etc. 

Present :  Hon.  ,  Judge. 

[Title  of  the  action]. 

On  reading  the  complaint  on  file  in  this  action,  and  on  reading 
and  filing  the  affidavit  of  T.  R.,  the  attorney  for  the  plaintiff,  and 
the  affidavits  of  service  and  the  notices  of  appearance,  from  v/hich 


'  See  ante  §§  4G0,  4G1. 


APPENDIX   OF   FORMS.  981 

it  appears  that  this  action  was  brought  to  foreclose  a  mortgage, 
and  that  the  whole  amount  secured  thereby  is  (not)  due  ;  and  it 
further  appearing  that  the  summons  was  duly  served  on  all  of  the 
defendants  herein,  more  than  twenty  days  since  ;  that  the 
time  to  answer  has  expired  as  to  all  of  the  defendants,  and 
that  no  answer  or  demurrer  has  been  received  from  any  of  them, 
and  that  none  of  the  defendants  are  infants  or  absentees,  {or, 
that  no  answer  has  been  served  by  any  defendant,  except  the 
usual  general  answer  of  the  infant  defendants,  R.  P.  and  D.  P., 
who  have  appeared  and  answered  by  their  guardian  ad  litem,  and 
that  the  defendant  O.  S.,  is  an  absentee)  ;  and  it  further  appear- 
ing that  a  notice  of  the  pendency  of  this  action  was  filed  more 
than  twenty  days  since  ;  and  on  filing  due  notice  of  this  motion, 
with  due  proof  of  the  service  thereof  on  the  attorneys  for  all  of 
the  defendants  who  have  appeared  herein  : 

Now,  on  motion  of  T.  R.,  attorney  for  the  plaintiff,  and  after 
hearing  J.  Z.,  of  counsel  for  the  defendant  C.  D.,  it  is 

Ordered,  that  it  be  referred  to  X.  Y.,  Esq.,  a  counselor  at 
law,  of  ,  to  ascertain  and  compute  the  amount  due  to  the 

plaintiff  for  principal  and  interest  on  the  bond  and  mortgage  set 
forth  in  the  complaint,  (and  also  to  compute  the  amount  due  to 
such  of  the  defendants  as  are  prior  incumbrancers  of  the  mort- 
gaged premises). 

[  Where  the  whole  amount  secured  by  the  mortgage  has  not  become 
due,  the  order  should  be\:  to  ascertain  and  compute  the  amount 
due  and  yet  to  become  due  on  the  bond  and  mortgage  set  forth 
in  the  complaint,  including  interest  thereon  to  the  date  of  his 
report,  and  also  to  ascertain  and  report  the  situation  of  the  mort- 
gaged premises,  and  whether,  in  his  opinion,  the  same  can  be  sold 
in  parcels,  without  prejudice  to  the  interests  of  the  parties  ;  and  if 
he  shall  be  of  the  opinion  that  a  sale  of  the  whole  of  said  prem- 
ises in  one  parcel  will  be  most  beneficial  to  the  parties,  then  that 
he  report  the  same  with  his  reasons  for  such  opinion. 

\If  one  of  the  defendants  is  an  infant,  and  has  put  in  a  general 
answer  by  his  guardian  ad  litem,  or  if  any  of  the  defendants  are 
absentees,  the  order  should  read  in  addition'\  :  to  take  proof  of  the 
facts  and  circumstances  stated  in  the  complaint,  and  to  examine 
the  plaintiff  or  his  agent  on  oath,  as  to  any  payments  which  have 
been  made,  and  to  ascertain  and  compute  the  amount  due  to  the 
plaintiff  for  principal  and  interest  on  the  bond  and  mortgage  set 
forth  in  the  complaint 

No.  12. 
Subpcena  to  Attend  Before  Referee. 

[Title  of  the  actioji\. 

By  virtue  of  an  order  made  and  entered  in  the  above  entitled 
action,  on  the         day  of  ,  i8     ,  to  ascertain  and  compute 

the  amount  due  to  the  plaintiff  for  principal  and  interest  on  the 


982  APPENDIX    OF    FORMS. 

bond  and  mortgage  set  forth  in  the  complaint  [Or,  insert  the  sub- 
stance of  the  order  of  refere^ice,  follo7ving  its  langiiage\  I,  X.  Y., 
the  referee  appointed  herein,  do  hereby  summon  you  to  appear 
before  me,  at  my  office,  No.  street,  in  the  city  of  ,  on 

rhe         day  of  ,  i8     ,  at  o'clock  in   the  noon,  to 

attend  a  hearing  of  the  matters  in  said  action,  in  reference  before 
me,  as  such  referee,  pursuant  to  said  order.  And  hereof,  fail  not 
at  your  peril. 

Dated  the         day  of  ,  i8     . 

X.Y., 

Referee, 

No.  13. 

Oath  of  Referee. 

\Title  of  the  actio n\ 
County  of  ,  ss. : 

I,  X.  Y.,  the  referee  named  in  the  order  of  this  court,  made  in 
the   above    entitled    action,    at    a  term    thereof    held    on 

the       day  of  ,  18     ,  hy  which  it  was  referred  to  the  under- 

signed referee,  to  ascertain  and  compute  the  amount  due  to  the 
plaintiff  for  principal  and  interes-t  on  the  bond  and  mortgage  set 
forth  in  the  complaint,  [folloiving  the  language  of  the  order\  being 
duly  sworn,  do  depose  and  say  : 

That  I  will  faithfully  and  fairly  try  and  determine  the  questions 
referred  to  me,  as  the  case  requires,  and  that  I  will  make  a  just 
and  true  report,  according  to  the  best  of  my  understanding. 

[J'urat'l  \_Signaiure\ 


No.   14. 
Report  of  Referee,  Preliminary  to  Judgrnent. 

Whole  Amount  Due.    No  Infants  or  Absentees. 

[Title  of  the  actio fi]. 

To  the  court  of  : 

In  pursuance  of  an  order  of  this  court,  made  in  the  above 
entitled  action,  on   the         day  of  ,  18     ,  by  which   it  was 

referred  to  the  undersigned  referee,  to  ascertain  and  compute 
the  amount  due  to  the  plaintiff  on  the  bond  and  mortgage  set 
forth  in  the  complaint  in  this  action,  [folloiving  the  language  of 
the  order\ 

I,  X.  Y.,  the  referee  in  said  order  named,  do  report,  that,  having 
first  taken  the  referee's  oath  herein  as  required  by  law,  I  have 
computed  and  ascertained  the  amount  due  to  the  plaintiff,  upon 
and  by  virtue  of  the  said  bond  and  mortgage,  and  that  I  find  and 
accordingly  report,  that  there  is  due  to  the  plaintiff  for  principal 
and  interest  on  the  said  bond  and  mortgage  at  the  date  of  this, 
my  report,  the  sum  of  dollars. 


Ai'l'JflNDLK   OF   rOKMS. 


9So 


t> 


Schedule  "A,"  hereunto  annexed,  shows  a  statement  of   the 

amounts  due  for  principal  and  interest  respectively,  the  periods  ot 

the  computation  of  interest,  and  its  rate. 

Dated  the         day  of  ,  i8    .  ^  „  ^      i 

[Stgnafure  of  Referee\. 

Schedule  "A." 
Exhibit  No.   i.     Bond   executed   by  C.   D.   to  E.  F.,  dated 
the         day  of  ,  i8     ,  to  secure  the  payment  of  the  sum 

of  dollars  and  interest. 

Exhibit  No.  2.  Mortgage  executed  by  C.  D.  and  M.  D.,  his 
wife  to  E  F.,  to  secure  the  payment  of  said  bond  ;  same  date  as 
bond  ;  recorded  the  day  of  ,18,  in  the  office  of  the  clerk 
of  the  county  of  ,  in  book  No.       ,  of  mortgages,  at  page     . 

Exhibit  No  3.  \^Insert  in  case  of  assignmeni\.  Assignment 
of  said  bond  and  mortgage  from  E.  F.  to  H.  O.,  dated  the  day 
of  18     ,  and  recorded  in  the  office  of  the  clerk  of  the 

county  of'  ,  in  book  No.      ,  of  assignments  of  mortgages,  at 

page 

Exhibit    No.    4.     Policy   of  insurance   for   _  dollars   in 

the  fire  insurance  company.     Premium  paid,  dollars. 

Exhibit  No.  5.     Tax  receipts  for  taxes  paid  by  plaintiff  for 

the   year    18     ,    to   the   county    {or  city)    treasurer,   amounting 

to  dollars. 

Principal  sum  on  bond •, ^ 

Interest  thereon  from  to  ,  being         years, 

months  and  days,  at  per  centum  per 

annum 

Amount  paid  by  plaintiff  for  taxes 

Interest  thereon  from        to  this  date,  at       per  centum 

per  annum 

Amount  paid  by  plaintiff  for  insurance 

Interest  thereon  from  to  this  date,  at    per  centum 


per  annum 

Total  amount  due 

Dated  the        day  of  ,18 


{^Signature  of  Referee\. 


No.  15. 
Report  of  Referee  Preliminary  to  Judgment. 

Whole  Amount  Not  Due.    No  Infants  or  Absentees. 

[  Title  of  the  actio?i\ 

To  the  court  of  :  ^     •     .u       1  « ,^ 

In   pursuance  of  an  order  of  this  court,    made  in  the  above 

entitled  action,  on  the  day  of  .18     .  ^y  which  it  was 

referred  to  the  undersigned  referee,  to  ascertain  and  compute  the 


984  APPENDIX   OF   FORMS. 

amount  due,  and  yet  to  become  due,  to  the  plaintiff  on  the  bond 
and  mortgage  set  forth  in  the  complaint,  which  is  filed  in  this 
action,  including  interest  thereon  to  the  date  of  this  report;  and 
also  to  ascertain  and  report  the  situation  of  the  mortgaged 
premises,  and  whether,  in  his  opinion,  the  same  could  be  sold  in 
parcels,  without  injury  to  the  interests  of  the  parties,  and  if  he 
should  be  of  the  opinion  that  a  sale  of  said  premises  in  one  parcel 
would  be  most  beneficial  to  the  parties,  to  report  his  reasons  for 
such  opinion, 

I,  X.  Y.,  the  referee  in  said  order  named,  after  having  first 
taken  the  referee's  oath  herein  as  required  by  law,  do  report : 

That  I  have  ascertained  and  computed  the  amount  due  to  the 
plaintiff  upon  and  by  virtue  of  the  said  bond  and  mortgage,  and 
that  the  amount  so  due,  with  interest  to  the  date  of  this  report, 
is  the  sum  of  dollars. 

That  I  have  also  ascertained  and  computed  the  amount  yet  to 
become  due  to  the  plaintiff  upon  said  bond  and  mortgage,  and 
that  the  amount  which  is  not  yet  due,  but  which  will  hereafter 
become  due  thereon,  including  interest  to  the  date  of  this  report, 
is  the  sum  of  dollars. 

That  the  whole  amount  secured  by  the  said  bond  and  mortgage 
and  still  remaining  unpaid,  including  interest  thereon  to  the  date 
of  this  report,  is  the  sum  of  dollars. 

Schedule  "A,"  hereunto  annexed,  shows  a  statement  of  the 
amounts  of  principal  due,  and  yet  to  become  due,  respectively;  the 
amounts  of  interest  thereon,  the  periods  of  computation  of 
interest,  and  its  rate. 

I  do  further  certify  and  report  that  I  have  ascertained  the 
situation  of  the  mortgaged  premises,  and  am  of  the  opinion  that 
the  same  can  not,  (or  can)  be  sold  in  parcels,  without  injury  to 
the  interests  of  the  parties  ;  that  my  reasons  for  such  opinion  are 
as  follows  :  \Here  state  the  reasons  for  such  opinion\. 

The  testimony  upon  which  I  have  formed  said  opinion  is  hereto 
annexed,  and  forms  a  part  of  this  report. 

Dated  the        day  of  ,  i8    . 

{^Signature  of  Referee\. 

Schedule  "  A." 

\Setout  the  bond  and  mortgage  and  the  other  papers  used  as  exhibits 
on  the  reference,  as  in  the  preceding  form,  and  continue  as  follows^  : 

Principal  sum  now  due ^ 

Interest  thereon  from  to  ,  being  years, 

months  and       days,  at      per  centum  per  annum. 

Amount  due $ 

Principal  sum  secured  by  said  bond  and  mortgage,  but 

not  yet  due $ 

Interest  thereon  from  to  ,  being  years, 

months  and      days,  at       per  centum  per  annum. 

Amount  to  become  due <ft 


APPENDIX   OF  FORMS.  985 


Amount  due,  as  above 

Amount  to  become  due,  as  above 


Total  amount  of, plaintiff's  claim  at  this  date. .  .$ 
Dated  the         day  of  ,  i8    . 

[^Signature  of  Refer ee\. 


No.  1 6 
Report  of  Referee  Preliminary  to  Judgment. 

Whole  Amount  Due.    Infants  or  Absentees. 

[Tttie  of  the  actton\ 

To  the  court  of  : 

In  pursuance  of  an  order  of  this  court,  made  in  the  above 
entitled  action,  on  the         day  of  ,  18     ,  by  which  it  was 

referred  to  the  undersigned  referee,  to  take  proof  of  the  facts  and 
circumstances  stated  in  the  complaint,  and  to  examine  the 
plaintiff  or  his  agent  on  oath,  as  to  any  payments  which  have 
been  made,  and  to  ascertain  and  compute  the  amount  due  to  the 
plaintiff  for  principal  and  interest  on  the  bond  and  mortgage  set 
forth  in  the  complaint, 

I,  X.  Y.,  the  referee  in  said  order  named,  do  certify  and  report, 
that  after  having  first  taken  the  referee's  oath  herein,  as  required 
by  law,  I  took  proof  of  the  facts  and  circumstances  stated  in  the 
complaint,  and  examined  the  plaintiff  {or  U.  R.,  his  agent),  on 
oath  as  to  any  payments  which  have  been  made,  and  that  I  am  of 
the  opinion,  and  accordingly  do  report,  that  the  facts  and  circum- 
stances stated  in  said  complaint  are  true,  and  that  no  payments 
have  been  made  on  said  bond  and  mortgage,  except  such  as  are 
duly  credited  in  the  said  complaint. 

The  said  examination  of  the  plaintiff,  {or  of  U.  R.,  the  said 
agent  of  the  plaintiff),  and  the  proofs  taken  by  me  of  the  facts 
and  circumstances  stated  in  the  complaint,  except  such  of  said 
proofs  as  were  documentary,  are  annexed  to  this  report. 

And  I  do  further  certify  and  report,  that  I  have  ascertained 
and  computed  the  amount  due  to  the  plaintiff  for  principal 
and  interest  on  the  bond  and  mortgage  set  forth  in  the  complaint, 
and  that  I  find  and  accordingly  do  report,  that  there  is  due  to 
the  plaintiff  for  principal  and  interest  on  the  said  bond  and 
mortgage,  at  the  date  of  this  my  report,  the  sum  of  dollars. 

Schedule  "  A,"  hereto  annexed,  shows  a  statement  of  the 
amounts  due  for  principal  and  interest  respectively,  the  periods  of 
the  computation  of  the  interest,  and  its  rate. 

Dated  the         day  of  ,  18    . 

{^Signature  of  Referee\. 

Schedule  "A." 
[Insert  Schedule  "A,"  as  in  the  preceding  for}ti\. 


986  APPENDIX    OF    FOEMS. 

No.  17. 
Judgment  of  Foreclosure  and  Sale. 

Whole  Amount  Due. 

At  a  term,  etc. 

Present :  Hon.  ,  Judge. 

[Title  of  the  action\. 

On  reading  and  filing  the  affidavits  of  service  of  the  summons 
herein,  and  the  notices  of  appearance,  showing  the  due  service  of 
the  summons  on  all  of  the  defendants  in  this  action,  and  the  affi- 
davit of  T.  R.,  attorney  for  the  plaintiff,  showing  that  none  of  the 
defendants  are  infants  or  absentees  {or,  that  none  of  the  defend- 
ants are  infants  excepting  the  defendant  R.  P.,  and  that  none  of 
the  defendants  are  absentees  excepting  the  defendant  O.  S.,  who 
has  been  duly  served  with  the  summons  by  the  publication 
thereof  pursuant  to  an  order  of  this  court),  and  that  the  time  to 
answer  has  expired  as  to  all  of  the  defendants,  and  that  no  answer 
or  demurrer  has  been  put  in  by  any  of  the  defendants  (excepting 
the  general  answer  of  the  defendant  R.  P.,  who  is  an  infant,  and 
whose  answer  by  his  guardian  ad  litetn  does  not  controvert  any  of 
the  allegations  of  the  complaint,  and  excepting  also  the  answer  of 
the  defendant  C.  D.,  the  issues  raised  by  which  have  been 
duly  tried  at  a  term  of  this  court,  before  Hon.  , 

one  of  the  Justices  thereof,  and  a  decision  therein  rendered 
for  the  plaintiff  and  duly  filed )  [  //"  computation  is  by  the 
cou7-t  on  the  trial  of  the  issues\,  (and  the  court  on  such  trial 
having  ascertained  and  computed  the  amount  due  to  the  plaintiff 
for  principal  and  interest  on  the  bond  and  mortgage  set  forth  in 
the  complaint  to  be  the  sum  of  dollars,  and  interest  thereon 

from  the       day  of  ,  18    ,  the  date  when  said  computation  was 

made)  ;  and  on  reading  and  filing  the  report  of  X.  Y.,  Esq.,  to 
whom  it  was  referred,  to  ascertain  and  compute  the  amount  due 
to  the  plaintiff,  for  principal  and  interest  on  the  bond  and  mort- 
gage set  forth  in  the  complaint  (and  to  such  of  the  defendants, 
as  are  prior  incumbrancers  of  the  mortgaged  premises),  \^If  any  of 
the  defendatits  are  infants  or  absentees^  continue  in  the  language  of 
the  order  of  reference ;  and  to  take  proof  of  the  facts  and  cir- 
cumstances stated  in  the  complaint,  and  to  examine  the  plaintiff, 
or  his  agent,  on  oath,  as  to  any  payments  which  have  been  made], 
by  which    report,   bearing   date    the         day    of  ,    18     ,    it 

appears  \in  the  case  of  infants  or  absentees],  that  the  facts  and  cir- 
cumstances stated  in  said  complaint,  are  true,  and  that  no  pay- 
ments have  been  made,  except  such  as  are  duly  credited  in  the 
said  complaint,  and  that  the  sum  of  dollars  was  due  thereon, 

at  the  date  of  said  report ;  and  on  reading  and  filing  due  proof 
that  notice  of  the  pendency  of  this  action  was  filed  in  the  office 
of  the  clerk  of  the  county  of  ,  on  the         day  of         ,   18     . 

Now,  on  motion  of  T.  R.,  attorney  for  the  plaintiff,  no  one 
appearing  in  opposition  {or,  after  hearing  J.  Z.,  attorney  for 
the  defendant  C.  D.,  in  opposition  thereto),  it  is 


APPEia)IX    OF    FORMS.  987 

Ordered,  that  the  said  report  be,  and  the  same  hereby  is,  in 
all  things  confirmed  ;  and,  on  like  motion  as  af  Jresaid,  it  is 
adjudged,  that  the  mortgaged  premises,  described  in  the  com- 
plaint in  this  action,  as  hereinafter  set  forth,  or  so  much  thereof 
as  may  be  sufficient  to  raise  the  amount  due  to  the  plaintiff  for 
principal,  interest  and  costs,  and  which  may  be  sold  separately, 
without  material  injury  to  the  parties  interested,  be  sold  at  pub- 
lic auction,  in  the  county  of  ,  by  and  under  the  direction 
of  J.  R.,  Esq.,  of  the  city  of  ,  counselor  at  law,  who  is 
hereby  appointed  a  referee  for  that  purpose,  [or  by,  and  under,  the 
direction  of  the  sheriff  of  said  county)  ;  that  the  said  referee 
give  public  notice  of  the  time  and  place  of  such  sale,  according 
to  law  and  the  practice  of  this  court ;  that  either,  or  any,  of  the 
parties  to  this  action,  may  purchase  at  such  sale  ;  that  the  said 
referee  execute  to  the  purchaser,  or  purchasers,  a  deed,  or  deeds, 
of  the  premises  sold  ;  that  out  of  the  moneys  arising  from  such 
sale,  after  deducting  the  amount  of  the  fees  and  expenses  on  such 
sale,  and  any  lien,  or  liens,  upon  said  premises  so  sold  for  taxes, 
assessments  or  water  rates,  at  the  time  of  such  sale,  and  the 
amount  necessary  to  redeem  the  property  sold,  from  any  liens 
for  unpaid  taxes,  assessments  or  water  rates,  which  have  not  appar- 
ently become  absolute,  the  said  referee  pay  to  the  plaintiff,  or  to 
his  attorney,  the  sum  of  dollars,  adjudged  to  the  plaintiff  for 
costs  and  disbursements  in  this  action,  with  interest  thereon, 
from  the  date  hereof  ;  that  he  pay  to  M.  N.,  guardian  ad /item  for 
said  infant  defendant,  R.  P.,  the  sum  of  dollars,  as  an 
allowance  of  costs,  and  that  he  also  pay  to  the  plaintiff,  or  to  his 
attorney,  the  amount  so  reported  due  to  him,  as  aforesaid,  together 
with  the  legal  interest  thereon,  from  the  date  of  said  report,  or  so 
much  thereof,  as  the  purchase  money  of  the  mortgaged  premises 
will  pay  of  the  same,  and  that  he  take  a  receipt  therefor,  and  file 
it  with  his  report  of  sale  ;  that  he  pay  over  the  surplus  money,  if 
any  there  should  be,  arising  from  the  said  sale,  to  the  treasurer 
of  said  county  of  ,  {or,  if  the  property  is  situated  in  the  city  of 
New  York,  to  the  chamberlain),  within  five  days  after  the 
same  is  received  and  ascertainable,  subject  to  the  order 
of  this  court  ;  that  he  make  a  report  of  such  sale,  and  file 
it  with  the  clerk  of  this  court,  with  all  convenient  speed  ;  that 
if  the  proceeds  of  such  sale  are  insufficient  to  pay  the  amount  so 
reported  due  to  the  plaintiff,  with  the  interest  and  costs,  as  afore- 
said, then  that  the  said  referee  specify  the  amount  of  such  defi- 
ciency in  his  report  of  sale,  and  that  the  defendants,  C.  D.,  J. . 
H.  and  H.  O.,  pay  to  the  plaintiff  the  residue  of  the  debt  remain- 
ing unsatisfied,  after  a  sale  of  the  mortgaged  property,  and  the 
application  of  the  proceeds  thereof,  pursuant  to  the  directions 
contained  herein,  and  that  the  plaintiff  have  execution  therefor, 
and  that  the  purchaser,  or  purchasers,  at  such  sale,  be  let  into 
possession  on  production  of  the  referee's  deed. 

And   it   is    further   adjudged,    that    the    defendants,    and    all 
persons  claiming  under  them,  or  any  or  either  of  them,  after  the 


988  APPENDIX    OF   FORMS. 

filing  of  the  said  notice  of  the  pendency  of  this  action,  be  forever 
barred  and  foreclosed  of  all  right,  title,  interest  and  equity  of 
redemption,  in  the  said  mortgaged  premises,  so  sold,  and  in 
every  part  thereof. 

The  following  is  a  description  of  the  mortgaged  premises,  here- 
inbefore mentioned  :  {^Insert  description  of  the  premises  as  contained 
in  the  mortgage  and  the  co7nplaini\. 


No.  1 8. 
Judgment  of  Foreclosure  and  Sale. 

Part  only  Due— Premises  Sold  in   One   Parcel.    CAs  in   Preceding   Form   No.  17, 
to  *  and  Continue). 

To  ascertain  and  compute  the  amount  due,  and  yet  to  become 
due,  to  the  plaintiff,  on  the  bond  and  mortgage  set  forth  in  the  com- 
plaint, including  the  interest  thereon,  to  the  date  of  his  report, 
and  also,  to  ascertain  the  situation  of  the  mortgaged  premises,  and 
whether  the  same  can  be  sold  without  prejudice  to  the  interests 
of  the   parties,  by   which    report,    bearing    date    the  day 

of  ,  18     ,  it  appears  that  the  amount  due  to  the  plaintiff, 

with  interest,  to  the  date  of  said  report,  is  the  sum  of  dol- 

lars, and  that  the  amount  which  is  not  yet  due  to  the  plaintiff,  but 
which  will  hereafter  become  due  to  him,  on  said  bond  and 
mortgage,  including  interest  thereon,  to  the  date  of  said  report, 
is  the   sum  of  dollars,  and,  that  the  whole  amount  secured 

by  said  bond  and  mortgage,  and  still  remaining  unpaid,  including 
interest  thereon,  to  the  date  of  said  report,  is  the  sum  of  dol- 

lars, and  that  the  said  mortgaged  premises  can  not  be  sold  in 
separate  parcels,  without  injury  to  the  interests  of  the  parties, 
for  the  reason  that  \insert  reason  as  conlaitied  in  the  rejeree's 
repori\. 

Now  on  motion  of  T.  R.,  attorney  for  the  plaintiff,  and  after 
hearing  J.  Z.,  attorney  for  the  defendant,  C.  D.,  in  opposition 
thereto,  it  is 

Ordered,  [Continue  as  in  preceding  Form  No.  17,  except  that 
the  direction  to  pay  the  ^^  amount  due,"  should  be  changed  to  a 
similar  direction^  pay  to  the  plaintiff,  or  his  attorney,  the  whole 
amount  so  reported  to  be  secured  by  the  said  bond  and  niort- 
gage,  and  still  remaining  unpaid,  together  with  the  legal  interest. 

And  it  is  further  adjudged,  that  in  case  the  amount  reported  asj 
actually  due  to  the  plaintiff,  with  interest,  and  the  costs  of  thib 
action,  shall  be  paid  before  such  sale,  the  plaintiff  shall  be  at  liberty 
at  any  time  hereafter,  when  any  of  the  principal  sum  or  interest, 
secured  by  said  bond  and  mortgage,  shall  become  due,  to  apply  to 
the  aforesaid  referee,  who  is  hereby  continued  a  referee  for  that 
purpose,  under,  and  in  pursuance  of,  this  judgment,  and  obtain  a 
report  of  the  amount  which  shall  then  be  due  ;  to  the  end,  that 
upon  the  coming  in  and  confirmation  of  such  report,  a  judgment 


APPENDIX   OF   FORMS.  989 

maybe  made  for  a  sale  of  the  said  premises,  to  satisfy  the  amount 
which  shall  then  be  due,  with  interest,  and  the  costs  of  such 
report  and  sale. 

And  it  is  further  adjudged,  that,  in  case  the  said  premises 
shall  be  sold  under  this  judgment,  and  shall  not  produce  suffi- 
cient to  satisfy  the  amount  so  reported  as  being  secured  by  the 
said  bond  and  mortgage,  and  still  remaining  unpaid,  with 
interest,  and  the  costs  of  this  action  and  of  such  sale,  the 
plaintiff  may,  at  any  time  thereafter,  when  any  future  installment 
of  principal  or  interest  on  said  bond  and  mortgage  shall  become 
due,  apply  to  this  court,  for  an  execution  against  the  said  defend- 
ant C.  D.,  who  is  personally  liable  for  the  payment  of  the  debt 
secured  by  the  said  mortgage,  for  the  amount  which  shall  thea 
be  due,  with  interest  and  the  costs  of  such  application. 

The  following  is  a  description  of  the  mortgaged  premises  here- 
inbefore mentioned :  [Insert  description\. 


No.   19. 
Judgment  of  Foreclosure  and  Sale. 

Part  Only  Due — Premises  to  be  Sold  in  Separate  Parcels. 

\As  in  preceding  For?n  No.  1 8,  except  that  the  opinion  of  the 
referee  to  the  effect.,  that  the  premises  can  be  sold  in  parcels  without 
injury  to  the  interests  of  the  parties,  should  be  stated  according  to 
the  facts.  The  addition  to  Form  No.  17,  imtnediately  before  the 
description  should  be  as  follows\  : 

And  it  is  further  adjudged,  that  the  plaintiff  be  at  liberty,  at 
any  time  hereafter,  as  any  installment  of  principal  or  interest, 
secured  by  said  bond  and  mortgage,  shall  become  due,  to  apply 
to  the  aforesaid  referee,  who  is  hereby  continued  a  referee  for 
that  purpose,  under,  and  in  pursuance  of  this  judgment,  and 
to  obtain  a  report  as  to  the  amount  which  shall  then  be  due  to  the 
plaintiff,  to  the  end  that,  upon  the  coming  in  and  confirmation  of 
such  report,  an  order  may  be  made  for  a  sale  of  the  residue  of 
said  premises,  not  sold  under  this  judgment,  to  satisfy  the  amount 
which  shall  then  be  due,  with  interest,  and  the  costs  of  such 
report  and  sale. 

And  it  is  further  adjudged,  that  in  case  the  said  premises  shall 
be  sold  under  this  judgment,  and  shall  not  produce  sufficient 
to  satisfy  the  amount  so  reported  as  secured  by  the  said  bond 
and  mortgage,  and  still  remaining  unpaid,  with  interest,  and  the 
costs  of  this  action,  and  of  such  sale,  the  plaintiff  may,  at  any 
time  thereafter,  when  any  future  installment  of  principal  or 
interest,  on  said  bond  and  mortgage,  shall  become  due,  apply  to 
this  court  for  an  execution  against  the  said  defendants,  C.  D., 
J.  H.  and  H.  0.,who  are  personally  liable  for  the  payment  of  the 
debt  secured  by  the  said  bond  and  mortgage,  for  the  amount 
which  shall  then  be  due,  with  interest,  and  the  costs  of  such 
application. 


990  APPENDIX    OF    iOiiMS. 

The  following  is  a  description  of  the  mortgaged  premises,  here- 
inbefore mentioned  and  specified,  and  the  order  in  which  the 
said  several  parcels  thereof  are  to  be  sold  separately,  to  wit  : 

I.  The  lot  or  parcel,  to  be  sold  first,  is  bounded  as  follows  : 
[Inseri  description]. 

II,  The  lot  or  parcel,  to  be  sold  next  or  second,  is  bounded 
as  follows  :  [Insert  description]. 


No.   20. 
Judgment  of  Foreclosure  and  Sale. 

Direction  to  be  Inserted  in  Judgment  for  a  Sale  «f  Separate  Parcels  in  the 
Inverse  Order  of  Alienation. 

[Insert  at  the  end  of  the  judgment,  immediately  before  the  descrip- 
tion] : 

And  it  is  further  adjudged,  that  the  said  referee  summon 
before  him  all  of  the  parties  who  have  appeared  in  this  action, 
and  that  he  take  proof  of  the  order  and  manner  of  alienation  of 
the  mortgaged  premises,  and  that  if  it  shall  appear  to  the  said 
referee,  that  separate  parcels  of  the  said  mortgaged  premises 
have  been  conveyed  or  incumbered  by  the  said  mortgagor,  or  by 
those  claiming  under  him,  subsequently  to  the  lien  of  the  plaintiff's 
mortgage,  the  said  referee  shall  sell  the  mortgaged  premises  in 
parcels,  in  the  inverse  order  of  their  alienation,  according  to  the 
equitable  rights  of  the  parties  who  are  subsequent  grantees  or 
incumbrancers,  as  such  rights  shall  be  made  to  appear  to  said 
referee. 


No.  21. 
Judgment  of  Foreclosure  and  Sale. 

Provision  to  be  Inserted  in  Judgment  for  Sale,  When  One  of  the  Defendants  is 
Merely  a  Surety. 

And  it  is  further  adjudged,  that  if  the  plaintiff  is  not  able  to 
collect  the  amount  of  such  deficiency  out  of  the  estate  of  the  said 
[naming  mortgagor],  upon  the  issuing  of  an  execution  against  his 
property,  to  the  sheriff  of  the  county  in  which  he  resides,  or  of 
the  county  where  he  last  resided  in  this  state,  the  defendants, 
[fiamifig  the  sureties],  upon  the  return  of  such  execution  unsatis- 
fied, pay  so  much  of  such  deficiency,  as  the  proceeds  of  the  sale 
hereinbefore  directed,  and  the  amount,  if  any,  which  shall  have 
been  collected  of  the  said  [naming  mortgagor],  personally,  (sub- 
sequent to  the  assignment  by  said  sureties  to  the  plaintiff), 
exclusive  of  the  costs  and  expenses  of  the  foreclosure  and  snle, 
shall  be  less  than  the  principal  [or  other  limit  of  sureties'  liability), 
and  the  interest  thereon,  from  the  time  of  the  commencement  of  this 
action,  to  the  time  of  such  sale,  with  the  interest  on  that  part  of 


'  APPENDIX    OF    FUKMS.  991 

the  deficiency,  from  the  time  of  the  said  sale,  until  it  shall  be   so 
paid  by  them. 

And  it  is  further  adjudged,  that  if  they  pay  the  amount  thus 
decreed  against  them  personally,  or  if  the  same  is  collected  out  of 
their  property,  they  shall  have  the  benefit  of  this  judgment, 
against  the  said  \^naming  mortgagor-],  for  the  purpose  of  enabling 
them  to  obtain  remuneration  from  him,  to  the  same  extent  with 
interest,  but  no  further,  either  by  a  new  execution  against  his 
property,  or  by  bringing  an  action  thereon,  as  they  may  think 
proper. 


No.    22. 

Notice  of  Sale  Under  Judgment. 

l^Tt'fle  of  the  action]. 

In  pursuance  of  a  judgment  of  foreclosure  and  sale,  made  and 
entered  in  the  above  entitled  action,  bearing  date  the  day 
of  ,  i8     ,  and  entered  in  the  county  clerk's  office,  on 

the         day  of  ,  iS     ,  I,  the   undersigned    referee,  in    said 

judgment  named,  {or  the  sheriff  of  the  county  of  ),  will  sell 

at    public    auction,    at    the  ,  in    the  city  of  ,  county 

of  ,  and    state    of  ,  on    the         day    of  >  i8     , 

at  o'clock  in  the  noon  of  that  day,  the  following  described 
premises  :    [^Insert  description]. 

Dated  the         day  of  ,  i8     . 

J.R., 

T.  R.,  Referee  {or  Sheriff). 

Plaintiff's  Attorney. 


No.   23. 
Terms  of  Sale. 

[  Title  of  the  action]. 

The  premises  described  in  the  annexed  notice  of  sale,  will  be 
sold  under  the  direction  of  J.  R.,  referee  {or  sheriflf  of  the 
county  of  ),  upon  the  following  terms  : 

I.  Ten  per  centum  of  the  purchase  money  of  the  said  prem- 
ises will  be  required  to  be  paid  to  the  said  referee  {or  sheriff),  at 
the  time  and  place  of  sale,  for  which  the  referee's  {or  sheriff's) 
receipt  will  be  given. 

II.  The  balance  of  said  purchase  money  will  be  required  to 
be  paid  to  said  referee  {or  sheriff),  at  his  office,  No.  ,  in  the 
city  of  ,  on  the  day  of  ,  18  ,  at  which  time  the 
said  referee's  {or  sheriff's)  deed,  will  be  ready  for  delivery. 

III.  The  referee  {or  sheriff),  is  not  required  to  send  any 
notice  to  the  purchaser;  and  if  he  neglects  to  call  at  the  time  and 


992  APPENDIX   OF   FORMS. 

place  above  specified,  to  receive  his  deed,  he  will  be  charged  with 
interest  thereafter,  on  the  whole  amount  of  his  purchase,  unless 
the  referee  {or  sheriff),  shall  deem  it  proper  to  extend  the  time 
for  the  completion  of  said  purchase. 

IV.  All  taxes,  assessments  and  water  rates  upon  said  premises, 
will  be  allowed  by  the  referee  (or  sheriff),  out  of  the  purchase 
money,  provided  the  purchaser  shall,  previously  to  the  delivery  of 
the  deed,  produce  to  the  referee  {or  sheriff),  proof  of  such  liens 
and  duplicate  receipts  of  the  payment  thereof. 

v.  The  purchaser  of  said  premises,  or  of  any  portion  thereof, 
will,  at  the  time  and  place  of  the  sale,  sign  a  memorandum  of  his 
purchase,  and  pay,  in  addition  to  the  purchase  money,  the  auc- 
tioneer's fee  of  ten  dollars,  for  each  parcel  separately  sold. 

VI.  The  biddings  will  be  kept  open,  after  the  property  is 
struck  off,  and,  in  case  any  purchaser  shall  fail  to  comply  with  any 
of  the  above  conditions  of  sale,  the  premises  so  struck  down  to 
him,  will  be  again  put  up  for  sale  under  the  direction  of  said 
referee  {or  sheriff)  under  these  same  terms  of  sale,  without  appli- 
cation to  the  court,  unless  the  plaintiff's  attorney  shall  elect  to 
make  such  appHcation  ;  and  such  purchaser  will  be  held  liable 
for  any  deficiency  that  may  exist  between  the  sum  for  which  said 
premises  were  struck  off  upon  the  sale,  and  that  for  which  they 
may  be  sold  on  the  resale,  and  also,  for  all  costs  and  expenses 
occurring  on  such  resale. 

VII.  \If  there  is  a  prior  incumbrance\.  The  said  premises 
will  be  sold  subject,  however,  to  a  mortgage  for  dollars, 
and  interest  thereon,  from  the  day  of  >  i8  ,  and  subject  to 
{describing  any  other  incumbrances^ 

J-  R., 

Referee  {or  Sheriff). 

Memorandum  of  Sale. 

I,  M.  N.,  have  this        day  of  »  i8     ,  purchased  the  prem- 

ises described  in  the  annexed  printed  notice  of  sale,  for  the  sum 
of  dollars,  and  I  hereby  promise  and  agree  to  comply  with 

the  terms  and  conditions  of  sale  of  said  premises,  as  above 
mentioned  and  set  forth. 

Dated  i8    .  M.  N., 

Purchaser, 
Receipt. 
$ 

Received  from   M.  N,,  the  sum  of  dollars,  being  ten  per 

centum  of  the  amount  bid  by  him,  for  the  property  sold  by  me, 
under  the  judgment  in  the  above  entitled  action,  and  pursuant  to 
the  foregoing  terms  of  sale. 

Dated  i8    . 

J.  R., 

Referee  {or  Sheriff). 


APPENDIX    OF   FOKMS.  993 

No.  24. 

Affidavit  of  Posting  Notice  of  Sale. 
\^Title  of  the  actioti\. 
County  of  ,  ss. : 

,  being  duly  sworn,  says  that  he  is  more  than  21  years  of 
age,  and  resides  at  ;  that  on  the         day  of  ,18     ,  he 

posted,  and  conspicuously  fastened  up,  a  printed  notice  of  sale, 
of  which  the  prefixed  notice  is  a  copy,  in  three  public  places,  in 
the  city  of  ,  in  said  county  of  ,  as  follows  :  one  notice  on 

the  outer  door  of  the  court  house  in  said  city  ;  one  notice  on  the 
bulletin  board  at  ;  one  notice  in  the  post-office  at         ;  that 

said  city  of  ,  is  the  place  where  said  sale  is  to  take  place, 

as  mentioned  in  said  notice  ;  and  that  the         day  of  ,  18     , 

is  at  least  forty-two  days  before  the  day  of  sale,  mentioned  in 
said  notice. 

Deponent  further  says,  that  on  the  said         day  of  ,  18     , 

he  also  posted,  and  conspicuously  fastened  up,  said  printed 
notice  of   sale  in  three  public  places,  in  the  town   of  ,  in 

said  county  of  ,  as  follows  :  one  notice  of  sale  in  the  store 

of  ;  one  notice  in  the  post-office  of  said  town  ;  one  notice 

in   the  hotel;  that    said    town    of  ,  is  the  town  where 

the  property  described  in  said  notice,  is  situated  ;  and  that 
said  day  of  ,  18     ,  is  at  least  forty-two  days  before  the 

day  of  sale  mentioned  in  said  notice. 

[furat.] 

No.  25. 

Referee's  Report  of  Sale. 

[Title  of  the  actioti\. 

To  the  court  of  : 

In  pursuance  and  by  virtue  of  a  judgment  of  this  court,  granted 
in  the  above  entitled  action,  at  a         term  thereof,  held  at  , 

on  the  day  of  ,  18      ,  and  heretofore  duly  entered,  by 

which  it  was,  among  other  things,  ordered  and  adjudged,  that  all 
and  singular  the  mortgaged  premises  mentioned  in  the  complaint 
in  this  action,  and  hereinafter  described,  or  so  much  thereof  as 
might  be  sufficient  to  discharge  the  mortgage  debt,  the  expenses 
of  the  sale  and  the  costs  of  the  action,  and  which  might  be  sold 
separately  without  material  injury  to  the  parties  interested,  be 
sold  at  public  auction,  in  the  county  of  ,  by  or  under  the 

direction  of  the  undersigned  referee  (<?r  sheriff)  ;  that  the  referee 
{or  sheriff)  give  public  notice  of  the  time  and  place  of  such  sale, 
according  to  law  and  the  rules  and  practice  of  this  court ;  that 
the  plaintiff,  or  any  of  the  parties  to  this  action,  might  become  a 
purchaser  on  such  sale  ;  that  the  referee  execute  a  deed  to 
the  purchaser  of  the  mortgaged  premises  so  sold  ;  that  said 
referee  pay  all  taxes,  assessments  and  water  rates,  which  are  liens 

(63J 


994  APPENDIX    OF    FOliMS. 

Upon  the  property  sold,  and  the  amount  necessary  to  redeem  the 
property  sold  from  any  sales  for  unpaid  taxes,  assessments  or 
water  rates  which  have  not  apparently  become  absolute  ;  that  said 
referee  pay  to  the  said  plaintiff,  or  his  attorney,  out  of  the 
proceeds  of  the  sale,  dollars,  his  costs  and  charges  in  this  action 

as  adjusted,  with  interest  from  the  date  of  said  judgment,  and  also 
the  amount  reported  due  to  the  plaintiff,  together  with  the  legal 
interest  thereon  from  the  date  of  the  referee's  report,  or  so  much 
thereof  as  the  purchase  money  of  the  mortgaged  premises  would 
pay  ;  that  the  referee  take  the  plaintiff's  receipt  therefor  and  file 
the  same  with  his  report ;  that  he  pay  the  surplus  moneys  arising  from 
said  sale,  if  any  there  should  be,  into  court,  to  the  treasurer  of 
the  county  of  ,  [or,  to  the  chamberlain  Of  the  city  of  New 

York),  within  five  days  after  the  same  should  be  received  and 
ascertainable,  for  the  use  of  the  person  or  persons  entitled  thereto, 
subject  to  the  further  order  of  this  court ;  and  that  if  the  moneys 
arising  from  said  sale  should  be  insufficient  to  pay  the  amount  so 
reported  due  to  the  plaintiff,  Avith  the  interest,  costs,  taxes  and 
expenses  aforesaid,  the  said  referee  {or  sheriff),  specify  the 
amount  of  such  deficiency  in  his  report  of  sale, 

I,  the  undersigned,  J.  R.,  the  referee  {or  sheriff)  named  in  said 
judgment,  do  respectfully  certify  and  report  such  sale  and  pro- 
ceedings as  follows  : 

That,  having  been  charged  by  the  attorney  for  the  plaintiff 
with  the  execution  of  said  judgment,  I  advertised  said  premises 
to  be  sold  by  me,  at  public  auction,  at  ,  in  the  town  (^rcity) 

of  ,  in  the  county  of  ,  on  the         day  of  ,  i8     , 

at  o'clock  in  the  noon  ;  that  previous  to  said  sale,  I  caused 
notice  thereof  to  be  publicly  advertised  for  weeks  successively, 
as  follows,  to  wit:  by  causing  a  printed  notice  thereof  to  be  fastened 
up  in  three  public  and  conspicuous  places  in  the  ,  where 

the  said  premises  were  to  be  sold,  and  also  in  three  public  and 
conspicuous   places   in    the  ,  where  the  said  mortgaged 

premises  are  situated,  at  least  days  before  the  sale,  and  also 
by  causing  a  copy  of  such  notice  to  be  published  once  in  each 
week  during  the  weeks  immediately  preceding  such  sale,  in 

a  public  newspaper  printed  in  said  county  of  ,  to  wit : 

the  ,  published  at  ,  in  said  county,  which  notice 

contained  the  same  description  of  said  mortgaged  premises  as  did 
said  judgment. 

And  I  do  further  report,  that  on  the  day  of  »  i8     , 

the  day  on  which  said  premises  were  so  advertised  to  be  sold  as 
aforesaid,  I  personally  attended,  at  the  time  and  place  fixed  for 
said  sale,  and  exposed  said  premises  for  sale  at  public  auction  to 
the  highest  bidder,  and  that  the  said  premises  were  then  and 
there  fairly  struck  off  to  ,  for  the  sum  of  dollars,  he 

being  the  highest  bidder  therefor  and  that  being  the  highest  sum 
bidden  for  the  same. 

And  I  do  further  report  that  I  have  executed,  acknowledged 
and  delivered  to  the  said  purchaser,  the  usual  referee's  {or  sheriff's) 


APPENDIX    OF   FORMS.  995 

deed  for  said  premises,  and  have  paid  over  or  disposed  of  the 
purchase  money,  or  the  proceeds  of  said  sale,  as  follows,  to  wit :  I 
have  paid  to  the  attorney  for  the  plaintiff  the  sum  of  dollars, 

being  the  amount  of  his  costs  of  this  suit,  as  adjusted,  with  interest, 
and  have  taken  his  receipt  therefor,  v/hich  is  hereto  annexed. 

I  have  also  retained  in  my  hands  the  sum  of  dollars,  being 

the  amount  of  my  fees  and  disbursements  on  said  sale,  including 
the  expense  for  publishing  the  notice  of  sale. 

I  have  paid  to  the  plaintiff  {or  his  attorney)  the  sum  of 
dollars,  adjudged  to  him,  and  have  taken  his  receipt  therefor, 
which  is  hereto  annexed. 

I  have  paid  to  the  county  treasurer  of  county,  for  the  use 

of  the  person  or  persons  entitled  thereto,  the  sum  of  dollars, 

the  surplus  herein,  and  have  taken  his  receipt  therefor,  which  is 
hereto  annexed. 

I  have  paid  for  city  taxes $ 

For  county  taxes 

For  printing  and  posting  the  notice  of  sale , . 

For  all  of  which  receipts  are  hereto  annexed. 
I  have  retained  for  my  fees  and  commissions 

Total $ 

[In  case  of  deficiency^  instead  of  the  clause  for  the  surplus,  inseri\: 
And  I  do  further  report  that  after  such  sale  herein,  and  the  dis- 
posal of  the  proceeds  thereof,  as  above  provided,  the  amount  of 
the  deficiency  is  the  sum  of  dollars,  with  interest  thereon 

from  the  date  of  this  report. 

And  I  do  further  report  that  the  premises  so  sold  and  conveyed 
by  me,  as  aforesaid,  were  described  in  said  judgment  and  in  the 
deed  executed  by  me,  as  aforesaid,  as  follows  : 

[^Insert  same  description  of  premises  as  in  judgment\ 
All  of  which  is  respectfully  submitted  to  this  court. 
Dated  the        day  of  ,  i8    . 

J.  R., 

Referee  {or  Sheriff). 

Receipt  for  Amount  Due  Plaintiff. 
[Title  of  the  action\ 

Received,  i8     ,  of  J.  R.,  the  referee  {or  sheriff),  who 

made  the  sale  of  the  premises  under  and  by  virtue  of  the  judg- 
ment in  the  above  entitled  action,  the  sum  of  dollars,  which 
sum,  being  part  of  the  proceeds  of  the  sale  of  said  premises,  is 
received  by  me  under  and  by  virtue  of  the  provisions  of  said 
judgment,  being  {or  on  account  of)  the  amount  adjudged  to  be 
paid  to  said  plaintiff,  with  interest  thereon,  as  mentioned  in  said 
judgment. 

T.  R., 

Attorney  for  Plaintiff. 


996  APPENDIX    OF   FORMS. 

Receipt  for  Costs. 
\_Title  of  the  action]. 

Received,  i8     ,  of  J.  R.,  the  referee  {or  sheriff),  who 

made  the  sale  of  the  premises  under  and  by  virtue  of  the  judg- 
nient  in  the  above  entitled  action,  the  sum  of  dollars,  being 

the  amount  of  the  costs  and  disbursements  of  the  plaintiff  in  said 
action,  as  taxed,  with  the  interest,  which  costs  are  paid  by  said 
referee  {or  sheriff)  under  and  by  virtue  of  the  provisions  of 
said  judgment. 

T.  R., 

Attorney  for  Plaintiff. 

Receipt  for  Surplus  Moneys. 

[Title  of  the  action]. 

Received,  ,  i8     ,  of  J.  R.,  referee  {or  sheriff)  herein, 

pursuant  to  the  judgment  in  this  action,  the  sum  of  dollars, 

being  surplus  moneys  received  on  the  sale  of  the  premises  in  the 
above  entitled  action. 

N.  v.,  '^''■" 

Treasurer  of  County. 


No.  26. 

Order  Confirming  Report  of  Sale. 

At  a  term,  etc. 

Present :  Hon.  ,  Judge. 

[Title  of  the  action]. 

The  report  of  J.  R..  Esq.,  the  referee  appointed  by  the  judg- 
ment in  this  action,  to  sell  the  mortgaged  premises  described  in 
the  complaint  herein,  having  been  duly  filed  in  the  office  of  the 
clerk  of  the  county  of  ,  on  the         day  of  ,  18     ,  and  on 

reading  and  filing  due  notice  of  the  filing  of  said  report,  with  due 
proof  of  the  service  thereof  on  all  of  the  parties  who  have  appeared 
in  this  action,  and  eight  days  having  elapsed  since  said  notice 
of  filing  said  report  was  served,  and  no  exceptions  having  been 
filed  thereto  ;  now  on  motion  of  T.  R.,  attorney  for  the  plaintiff, 
it  is 

Ordered,  that  the  said  report  and  the  sale  therein  mentioned,  be 
absolute  and  binding  forever,  and  that  they  stand  as  in  all  things 
ratified  and  confirmed. 


APPENDIX   OF   FORMS.  997 

No.  27. 

Petition  to  Sell  Balance  of  Mortgaged  Premises. 

\_Titie  of  the  action\. 

To  the  court  of  : 

The  petition  of  E.  F.,  the  above  named  plaintiff,  respectfully 
shows  that  a  judgment  of  foreclosure  and  sale  was  entered  in 
this  action  in  the  office  of  the  clerk  of  county,  on  the        day 

of  ,  18    ,  on  the  report  of  the  referee  herein,  whereby  it 

appears  that  the  sum  of  dollars  was  due  on  the  bond  and 

mortgage  mentioned  in  the  complaint,  on  the  day  of  ,  18  , 
and  that  the  amount  secured,  and  not  then  due,  was  the  sum 
of  dollars. 

That  such  proceedings  were  thereupon  had  upon  such  judg- 
ment, that,  under  and  by  virtue  thereof,  a  portion  of  the  prem- 
ises described  in  said  judgment,  and  in  the  complaint  herein, 
sufficient  for  the  payment  of  the  amount  reported  due  on  said 
bond  and  mortgage,  and  the  interest  thereon,  together  with  the 
costs  and  disbursements,  as  settled  by  the  clerk  of  the  county 
of  ,  and  entered  in  said  judgment,  was  sold,  and  brought 

the  sum  of  dollars,  which  said  sum  paid  the  costs  and 

expenses  on  said  foreclosure,  and  a  portion  of  the  principal 
secured  by  the  said  mortgage,  leaving  unpaid  on  said  mortgage, 
the  sum  of  dollars,  with  interest  thereon  from  the  day 

of  ,  18     . 

That  the  premises  so  sold,  comprised  the  lot  first  described  in 
the  said  judgment  and  complaint,  and  was  the  whole  of  the  prem- 
ises described  therein,  except  the  lot  last  described  therein,  which 
said  lot  so  remaining  unsold,  is  bounded  and  described  as  fol- 
lows :     \^Insert  description  from  Judgment]. 

That  under  and  by  virtue  of  the  terms  of  said  bond  and  mort- 
gage, the  interest  thereon  was  payable  [^state  terms  of  bond  and 
mortgage]  ;  that  the  interest  on  the  amount  unpaid  on  said  mort- 
gage, became  due  on  the  day  of  ,  18  ,  and 
remains  unpaid ;  that  no  party  has  appeared  in  said  action, 
except  the  defendants  C.  D.  and  M.  D.,  who  have  appeared  by 
J.  Z.,  as  their  attorney,  and  that  none  of  the  defendants  herein  are 
infants  or  absentees. 

Wherefore,  your  petitioner  prays,  that  an  order  may  be  granted 
in  this  action,  founded  on  said  judgment,  and  directing  a  sale  of 
said  unsold  lot,  hereinbefore  described,  under  and  pursuant  to 
the  said  judgment,  to  satisfy  the  amount  due  the  said  plaintiff, 
with  the  costs  of  this  proceeding  ;  and  as  said  lot  is  not  capable 
of  division,  your  petitioner  prays  that  the  whole  of  the  premises 
may  be  sold,  and  that  the  proceeds  may  be  applied  to  the  pay- 
ment of  such  costs  and  interest,  and  that  the  balance  may  be 
applied  to  the  payment  of  the  amount  due  on  the  mortgage  of 
this  plaintiff. 

Dated  the         day  of  ,  18     .  E.  F.,  Petitioner. 

[Add  verification  in  the  usual  form]. 


993  APPENDIX    Ob'    FORMS. 


No.  28. 


Order  Directing   Sale    of   Balance    of  Mortgaged 
Premises. 

At  a  term,  efc. 

Present :  Hon.  ,  Judge. 

\_TitIe  of  the  action]. 

On  reading  and  filing  the  petition  of  E.  F.,  the  above  named 
plaintiff,  by  which  it  appears,  among  other  things,  that  the  sum 
of  dollars  remains  unpaid  on  the  judgment  of  foreclosure  in 

the  above  entitled  action,  with  interest  thereon,  from  ,18     , 

after  the  application  of  all  the  proceeds  of  the  sale  of  the  prem- 
ises sold  under  said  judgment,  on  18  ;  that  the  interest  on 
said  sum  of  dollars,  from  18  ,  became  due  and  pay- 
able on  the  day  of  ,  i2>  ,  and  still  remains  unpaid  ;  and 
that  all  the  premises  described  in  said  complaint  and  judgment, 
have  been  sold,  except  a  single  lot,  which  said  lot  can  be  sold 
more  advantageously  by  being  sold  in  one  parcel;  and  on  reading 
and  filing  due  proof  of  the  service  of  this  petition  and  notice  of 
this  motion  on  C.  D.  and  M.  D.,  the  only  defendants  who  have 
appeared  herein  ;  now,  on  motion  of  T.  R.,  plaintiff's  attorney, 
it  is 

Ordered,  that  the  residue  of  the  said  mortgaged  premises, 
described  in  the  said  complaint  and  judgment  in  this  action,  and 
remaining  unsold,  be  sold  under  the  direction  of  the  referee  here- 
tofore appointed  herein,  for  the  payment  of  the  amount  remaining 
unpaid  on  said  mortgage,  to  wit :  the  sum  of  dollars,  and 

interest  thereon  from  18     ,  together  with  the  costs  of  this 

proceeding,  under  and  pursuant  in  all  respects  and  according  to 
the  termsand  the  directions  for  sale  contained  in  said  judgment. 

And  it  is  further  ordered,  that  the  said  defendants,  and  all  per- 
sons claiming  under  them,  or  either  of  them,  after  the  filing  of  the 
notice  of  the  pendency  of  this  action,  be  forever  barred  and  fore- 
closed of  all  right,  title,  interest  and  equity  of  redemption  o:  or 
in  the  said  mortgaged  premises  so  sold,  or  any  part  thereof. 

\^Add  clause  from  preceding  forms  directing  judgment  for  deficiency 
against  certain  defendants,  if  desired\ 


No.  29. 
Request  to  Docket  Judgment  for  Deficiency. 

[Title  of  the  action]. 

Sir  : — Please  docket  a  judgment  in  your  office,  in  favor  of  E.  F., 
the  above  named  plaintiff,  against  the  defendants  C.  D.  and 
J.  H.,  for   the    sum    of  dollars,  and  interest  thereon   from 

the         day  of  ,  18     ,  for  deficiency. 

Judgment  of  foreclosure  and  sale,  and  the  judgment  roll,  filed 
in  your  office,  on  the  day  of  ,  18      . 


APPJiNDIX    OF   i'OEMS.  999 

Report  of  J.  R.,  Esq.,  the  referee   {or  sheriff)  to    sell,  named 
in  said  judgment,  filed  in  your  office  on  the       day  of         ,  i8 
showing  a  deficiency  of  dollars. 

Dated  the         day  of  ,  i8     . 

T.  R., 

Plaintiff's  Attorney. 
To  R.  S.,  Esq.,  [Office  and  post-office  address\. 

Clerk  of  the  county  of  , 


No.  30. 
Judgment  for  Deficiency  on  Foreclosure. 

At  a  term,  etc. 

Present :  Hon.  ,  fudge. 

[Title  of  the  action\. 

The  report  of  J.  R.,  the  referee  {or  sheriff)  appointed  to  sell 
the  premises  described  in  the  judgment  in  the  above  entitled 
action,    having   been    filed   on   the  day    of  ,   18     ,  by 

which  it  appears  that  the  proceeds  of  said  sale  were  insufficient 
to  pay  the  amount  directed  to  be  paid  in  and  by  said  judgment, 
and  that  there  remains  due  from  the  defendants  C.  D.  and  J.  H., 
to  the  plaintiff  for  such  deficiency,  the  sum  of  dollars,  with 

interest  thereon  from  the      day  of  ,  18     ,  and  the  said  report 

of  sale  having  been  duly  confirmed  by  an  'order  of  said  court 
entered  on  the         day  of  ,  18     ;  now,  on  motion  of  T.  R., 

attorney  for  the  plaintiff,  it  is 

Adjudged,  that  the  plaintiff  recover  from  said  defendants 
C.  D.  and   J.   H.,  the    said    sum   of  dollars,    with   interest 

thereon   from    the         day   of  ,    18     ,   amounting   in    all, 

to  the  sum  of  dollars.  R.  S., 

Clerk. 


No.  31. 

Execution  for  Deficiency. 

The  People  of  the  State  of  ,  to  the  Sheriff  of  the  County 

of  ,  Greeting  : 

Whereas,  by  a  certain  judgment  made  in  the  court  and 

entered  in   the  ofiice  of  the  clerk  of  the  county  of  ,  on 

the  day  of  ,  18     ,  in  a  certain  action,  wherein  E.  F.  is 

plaintiff  and  C.  D.,  J.  H.  and  others,  are  defendants,  it  was,  among 
other  things,  ordered  and  adjudged,  that  the  mortgaged  premises 
described  in  said  judgment  should  be  sold  by  and  under  the 
direction  of  J.  R.,  Esq.,  as  referee  {or  sheriff)  ;  that  the  said 
referee  {or  sheriff)  should,  out  of  the  proceeds  of  said  sale, 
retain  the  costs  and  expenses  of  said  sale  and  pay  the  costs  and 
allowances  of  the  plaintilf  and  the  amount  reported  due  to  the 


1000  APPENDIX   OF  FOEMS. 

plaintiff  for  principal  and  interest,  or  so  much  thereof  as  the 
purchase  money  of  the  mortgaged  premises  would  pay  of 
the  same  ;  that  if  the  moneys  received  from  said  sale  should 
be  insufficient  to  pay  the  amount  so  reported  due  to  the 
plaintiff,  with  the  interest  and  costs  as  aforesaid,  then  that  the  said 
referee  (or  sheriff)  specify  the  amount  of  such  deficiency  in  his 
report  of  sale  ;  and  that  the  defendants  C.  D.  and  J.  H.,  should 
pay  the  same  to  the  plaintiff. 

And  whereas,  the  said  referee  has  duly  filed  his  report  of  sale 
in  the  office  of  the  clerk  of  the  county  of  ,  from  which  it 

appears  that  the  money  received  from  said  sale  was  insufficient  to 
pay  the  amount  so  reported  due  to  the  plaintiff,  with  interest  and 
costs  as  aforesaid,  and  that  the  amount  of  such  deficiency  is  the 
sum  of  dollars,   and   interest  theredn   from   the  day 

of  i8    ,   and  the  report  of  said  referee  has  been   duly 

confirmed. 

And  whereas,  said  judgment  for  said  deficiency,  in  favor  of 
E.  F.,  the  said  plaintiff,  and  against  the  said  defendants  C.  D.  and 
J.  H.,  for  the   sum  of  dollars,  and    interest   thereon   from 

the         day  of  i8     ,  was  on  the         day  of  i8     ,  duly 

docketed  in  the  office  of  the  clerk  of  the  county  of  ,  and 

the  said  sum  of  dollars,  and  interest  thereon  from  the       day 

of        i8    ,  is  now  actually  due  on  said  judgment. 

You  ARE,  THEREFORE,  required  to  satisfy  the  said  judgment  out 
of  the  personal  property  of  said  judgment  debtors,  or  either  of  them, 
within  your  county  ;  and  if  sufficient  personal  property  can  not  be 
found,  then  out  of  the  real  property  in  your  county  belonging  to 
said  judgment  debtors,  or  either  of  them,  on  the         day  of  , 

1 8  ,  when  said  judgment  was  so  docketed  in  your  county,  or  at 
any  time  thereafter,  and  to  return  this  execution  within  sixty 
days  after  its  receipt  by  you  to  the  clerk  of  the  county  of  , 

where  said  judgment  roll  is  filed  as  aforesaid. 

Witness,  Hon.  ,  one  of  the  Justices  of  said  court, 

this        day  of  ,  i8    . 

T.  R., 

Plaintiff  *s  Attorney. 

No  32. 
Sheriff's  or  Referee's  Deed  on  Foreclosure. 

This  Indenture,  made  this         day  of  ,18    ,  between 

J.  R.,  the  sheriff  of  the  county  of  ,  {or  the  referee,  in  the  action 
hereinafter  mentioned),  of  the  city  of  ,  county  of  ,  and 

state  of  ,  of  the  first  part,  and  of  the  second  part. 

Whereas,  at  a  term  of  the  court  of         ,  held  at        ,  on 

the         day  of  ,  18     ,  it  was,  among  other  things,  ordered, 

adjudged  and  decreed,  by  the  said  court  in  a  certain  action  then 
pending  in  said  court  between  E.  F.  plaintiff,  and  {name  all  the 
defendants^    defendants,    that     all    and    singular,    the    premises 


APPENDIX   OF   FOEMS.  1001 

described  in  a  mortgage  executed  by  C.  D.  and  M.  D.,  his  wife,  to 
E.  F.,  and  recorded  in  the  county  clerk's  ofifice  in  liber         of 

mortgages,  at  page  ,  and  being  the  same  premises  men- 
tioned in  the  complaint  in  said  action,  and  described  in 
said  judgment,  or  such  part  thereof,  as  might  be  sufficient 
to  discharge  the  mortgage  debt,  the  expenses  of  the 
sale,  and  the  costs  of  said  action,  and  which  might  be 
sold  separately,  without  material  injury  to  the  parties  inter- 
ested, be  sold  at  public  auction,  according  to  law  and  the 
course  and  practice  of  said  court,  by  and  under  the  direction 
of  said  sheriff,  of  said  county,  {or  of  said  J.  R.),  who  was 
appointed  a  referee  in  said  action,  and  to  whom  it  was  referred 
by  said  judgment,  among  other  things,  to  make  such  sale ; 
that  the  said  sale  be  made  in  the  county  where  the  said  mort- 
gaged premises,  or  the  greater  part  thereof,  are  situated  ;  that 
the  said  referee,  {or  sheriff),  give  due  public  notice  of  the  time 
and  place  of  such  sale,  according  to  law  and  the  course  and 
practice  of  said  court ;  that  the  plaintiff,  or  any  of  the  parties  to 
said  action,  might  become  a  purchaser  or  purchasers,  on  such  sale; 
and  that  the  said  referee  execute  to  the  purchaser  or  purchasers 
of  said  mortgaged  premises,  or  of  such  part  or  parts  thereof,  as 
should  be  sold,  a  good  and  sufficient  deed  or  deeds  of  conveyance 
for  the  same,  and  pay  all  taxes,  assessments  or  water  rates,  which 
were  liens  upon  the  property  sold. 

And  whereas,  the  said  referee  {or  sheriff),  in  pursuance  of  the 
order  and  judgment  of  said  court,  did,  on  the  day  of  >  i8  , 
sell  at  public  auction,  at  [state  the  time  and  place  of  sale\,  the 
premises  described  in  the  said  judgment,  due  notice  of  the  time 
and  place  of  such  sale  being  first  given,  pursuant  to  the  said  judg- 
ment, at  which  sale,  the  premises  hereinafter  described  were 
fairly  struck  off  to  the  said  party  of  the  second  part,  for  the  sum 
of  dollars,  that  being  the  highest  sum  bidden  for  the  same. 

Now  This  Indenture  Witnesseth,  that  the  said  referee,  {or 
sheriff),  the  party  of  the  first  part  to  these  presents,  in  order  to 
carry  into  effect  the  sale  so  made  by  him  as  aforesaid,  in  pursu- 
ance of  the  order  and  judgment  of  said  court,  and  in  conformity 
to  the  statute  in  such  case  made  and  provided,  and  also  in  con- 
sideration of  the  premises,  and  of  the  said  sum  of  money  so 
bidden,  as  aforesaid,  having  been  first  duly  paid  by  the  said  party 
of  the  second  part,  the  receipt  whereof  is  hereby  acknowledged, 
hath  bargained  and  sold,  and  by  these  presents  doth  grant,  and 
convey  unto  the  said  party  of  the  second  part,  all  the  right,  title  and 
interest  which  the  said  C.  D.  and  M.  D.,  his  wife,  the  mortgagors 
aforesaid,  had  at  the  time  of  the  execution  or  recording  of  said 
mortgage,  it  being  their  interest  in  said  premises  so  sold  and 
hereby  conveyed,  in  and  to  \insert  from  the  judgment  the  descrip- 
tion of  the  parcel  intended  to  be  convey ed\  to  have  and  to 
hold,  all  and  singular,  the  premises  above  mentioned  and 
described,  and  hereby  conveyed,  unto  the  said  party  of  the 
second  part,  his  heirs  and  assigns  forever. 


1002  APPENDIX   OF   FORMS. 

In  Witness  Whereof,  the  said  party  of  the  first  part,  referee  {or 
sheriff)  as  aforesaid,  hath  hereunto  set  his  hand  and  seal  the  day 
and  year  first  above  written.  J.  R., 

[Acknowledgment  in  the  usual  forni\.  ^ 


No.  zz. 

Affidavit  on  Application  for  Order  of  Possession. 

[Title  of  the  actiori\. 
County  of  ,    ss. : 

M.  N.,  being  duly  sworn,  says  that  this  action  was  brought  for 
the  foreclosure  of  a  mortgage  on  certain  real  estate  situated  in  the 
said  county  of  ,  and  state  of  ;  that  judgment  of  foreclos- 

ure and  sale  was  entered  herein  in  the  office  of  the  clerk  of  tlie 
county  of  ,  on  the  day  of  ,  18    ,  J.  R.,  Esq.,  of 

the  city  of  ,  being  therein  duly  appointed  the  referee  to 

sell ;  that  said  judgment  contained  the  usual  provision  that  the  pur- 
chaser be  let  into  possession  on  the  production  of  the  referee's 
deed,  to  which  said  judgment,  reference  is  hereby  had  as  part 
hereof;  that  due  notice  of  said  sale  was  given  by  said  referee, 
and  that  on  the         day  of  18     ,  the  mortgaged  premises 

described  in  said  judgment  were  duly  sold  at  public  auction  by 
said  referee  to  this  deponent  for  the  sum  of  dollars,  that 

being  the  highest  sum  bidden  for  the  same  ;  that  this  deponent 
has  duly  paid  the  said  purchase  money,  and  that  the  said  referee 
has  also  executed,  acknowledged  and  delivered  to  deponent 
a  deed  of  conveyance  of  said  mortgaged  premises  ;  that  the 
report  of  sale  of  said  referee  was  duly  filed  in  the  office  of 
the  clerk  of  this  court  on  the  day  of  ,  18      ,  to  which 

reference  is  hereby  had  as  a  part  hereof,  and  that  said  report  has 
been  duly  confirmed  ;  that  on  the      day  of  ,  18     ,  deponent 

went  to  the  said  mortgaged  premises  and  found  C.  D.,  who  is  one 
of  the  defendants  in  this  action,  in  possession  thereof  ;  that  he 
then  produced  and  shewed  to  said  C.  D.  the  said  deed  of  said 
referee  and  demanded  to  be  let  into  possession  by  virtue  thereof, 
but  the  said  C.  D.  refused  and  still  refuses  to  surrender  the  said 
premises,  or  any  part  thereof,  and  still  forcibly  holds  possession 
thereof  from  deponent. 

[Jurat\  M.  N. 

No.  34. 
Order  for  Possession. 

At  a  term,  etc. 

Present :   Hon.  ,  Judge. 

[Title  of  the  action\. 

On  reading  and  filing  the  affidavit  of  M.  N.,  the  purchaser  at  the 
sale  of  the  mortgaged  premises  in  this  action,  verified  18     , 


APPETTOIX    OF   rOPwMS.  1003 

and  on  all  of  the  papers  and  proceedings  herein,  including  the 
judgment  of  foreclosure  and  sale,  entered  herein  in  the  office  of 
the  clerk  of  the  county  of  ,  on  the         day  of  ,  i8     , 

and  on  the  report  of  the  sale  by  J.  R.,  Esq.,  the  referee  appointed 
to  sell,  filed  in  said  office,  on  the         day  of  ,  i8     ,  and  on 

the  order  confirming  said  report  entered  herein  on  the  day 

of  ,  i8        ,  and  on  the  deed  from  the  said  referee  to 

said  M.  N.,  which  said  deed  bears  date  the         day  of  ,  i8     , 

and  on  the  notice  of  this  motion,  with  due  proof  of  the  service 
thereof  on  the  defendant,  C.  D.,  who  is  now  in  possession  of  the 
said  premises  ;  and  after  hearing  X.  Y.,  Esq.,  attorney  for  the 
said  M.  N.,  the  purchaser,  and  J.  Z.,  Esq.,  attorney  for  the  said 
C.  D.,  in  possession  thereof,  it  is 

Ordered,  that  the  sheriff  of  the  county  of  ,  be,  and  he  is 

hereby  required,  forthwith  to  put  the  said  M.  N.  into  possession 
of  the  said  premises,  and  that  this  order  be  executed  as  if  it  were 
an  execution  for  the  delivery  of  the  possession  of  said  premises. 

The  said  premises  are  described  as  follows  :  [Insert  descrip- 
iion\. 

No.  35. 

Affidavit  on  Which  to  Apply  for  a  Receiver  of  Rents. 

[Title  of  the  action]. 
County  of  ,  ss.: 

E.  F.,  being  duly  sworn,  says  that  he  is  the  plaintiff  in  this  action; 
that  this  action  is  brought  to  foreclose  a  mortgage  given  to  secure 
the  payment  of  the   sum  of  dollars,  and  interest  thereon, 

from    the         day   of  ,    18     ,  on   the   following   described 

premises  :     [Ifisert  description]. 

That  said  mortgage  is  a  second  mortgage,  and  is  inferior  as  a 
lien   to  a  mortgage  for  dollars  upon  the  same  premises, 

held  by  ,  upon  which  there  is  now  unpaid  and  owing  inter- 

est from  the  day  of  ,  18     . 

That  there  are  unpaid  taxes  and  assessments  on  said  premises, 
amounting  at  this  date,  to  the  sum  of  dollars,  as  nearly  as 

can  be  ascertained  by  deponent,  being  as  follows :  the  gen- 
eral tax  for  the  year  18  ,  for  dollars,  and  interest 
thereon,  and  an  assessment  for  dollars,  for  paving  street, 
and  interest  thereon. 

That  the  whole  amount  of  the  incumbrances  on  said  property, 
including  the  plaintiff's  claim,  and  the  said  prior  mortgage,  and 
the  costs  and  expenses  of  this  action,  and  of  a  sale,  will  amount 
at  least  to  the  sum  of  dollars. 

That  the  said  mortgaged  premises  are  an  inadequate  and  insuf- 
ficient security  for  the  plaintiff's  demand,  and  that  they  are  not 
worth    more    than   the    sum   of  dollars,  as  deponent  verily 

believes  ;  that  the  grounds  of  deponent's  belief  are  [State  fully 
the  reasons  for  fixing  the  value  of  the  property  at  the  sum  named]. 


1004  APPENDIX    OF    FORMS. 

That  the  defendant,  C.  D.,  is  the  only  person  who  is  person- 
ally obligated  for  the  payment  to  the  plaintiff  of  the  said  mort- 
gage debt,  and  that  the  said  defendant  is  entirely  irresponsible 
and  insolvent.     [S^afg  reasons  for  believing  this  to  be  so\ 

That  there  are  judgments  against  said  defendant,  which  are 
unsatisfied  of  record,  and  that  the  defendants  O.  H.  and  G.  K., 
are  holders  of  said  judgments,  and  are  made  parties  to  this  action 
for  that  reason. 

That  said  mortgaged  premises  are  rented  to  the  defendant  C.  L., 
at  the  price,  as  deponent  is  informed  and  believes,  of  the  sum 
of  dollars  per  year  {or  month),  and  that  the  said  defendant 
{mortgagor),  is  collecting  and  receiving  the  rents  therefor. 

\J^urat\  E.  F. 


No.  36. 
Order  Appointing  Receiver  of  Rents. 

At  a  term,  etc. 

Present :  Hon.  ,  Judge. 

\Title  of  the  action\. 

On  reading  and  filing  the  affidavit  of  E.  F.,  verified  ,18  , 
and  the  notice  of  this  motion,  with  proof  of  the  due  service 
thereof,  and  on  the  complaint  which  has  been  filed  herein  ;  and 
it  appearing  that  the  mortgaged  premises  are  an  inadequate  secu- 
rity for  the  mortgage  debt,  and  that  no  one,  except  the  defendant 
C.  D.,  is  personally  liable  therefor,  and  that  he  is  insolvent, 
and  that  said  defendant  is  about  to  collect  the  rents  ;  and  after 
hearing  T.  R.,  attorney  for  the  plaintiff,  in  support  of  the  motion, 
and  J.  Z.,  attorney  for  the  defendant  C.  D.,  in  opposition  thereto, 
it  is 

Ordered,  that  J.  B.,  of  the  city  of  ,  counselor  at  law, 

be,  and  he  hereby  is  appointed,  with  the  usual  powers  and  direc- 
tions, receiver  of  all  the  rents  and  profits  now  due  and  unpaid,  or 
to  become  due,  pending  this  action,  and  issuing  from  the  mort- 
gaged premises  mentioned  in  the  complaint,  and  described  as 
follows  :  [^Insert  description^ 

That  before  entering  upon  the  duties  of  his  trust,  the  said 
receiver  execute  to  the  people  of  this  state,  and  file  with  the  clerk 
of  this  court,  his  bond  with  two  sureties,  to  be  approved  by  a 
judge  of  this  court,  in  the  penal  sum  of  dollars,  conditioned 

for  the  faithful  performance  of  his  duties  as  such  receiver. 

That  said  receiver  be,  and  he  hereby  is  directed  to  demand, 
collect  and  receive  from  the  tenant  or  tenants  in  possession  of 
said  premises,  or  other  persons  liable  therefor,  all  the  rents  there- 
of, now  due  and  unpaid,  or  hereafter  to  become  due. 

That  the  tenants  in  possession  of  such  premises,  and  such  other 
person  or  persons  as  may  be  in  possession  thereof,  do,  and  they 


APPEKDIX    OF   FORMS.  1005 

are  hereby  directed  to  attorn  as  such  tenant  or  tenants,  to  said 
receiver,  and  until  the  further  order  of  this  court,  to  pay  over  to 
such  receiver  all  rents  of  such  premises,  now  due  and  unpaid,  or 
that  may  hereafter  become  due. 

That  all  tenants  of  the  premises,  and  other  persons  liable  for 
such  rents,  are  hereby  enjoined  and  restrained  from  paying  any 
rent  for  such  premises,  to  the  defendant,  his  agents,  servants  or 
attorneys. 

That  all  persons  now,  or  hereafter  in  possession  of  said  prem- 
ises, or  any  part  thereof,  and  not  holding  such  possession  under 
valid  and  existing  leases,  do  forthwith  surrender  such  possession 
to  said  receiver. 

That  the  said  receiver  be,  and  he  hereby  is  authorized  to  insti- 
tute and  carry  on  all  legal  proceedings  necessary  for  the  protec- 
tion of  all  premises  described  in  the  complaint  or  referred  to  in 
this  order,  including  such  proceedings  as  may  be  necessary  to 
recover  possession  of  the  whole,  or  any  part  of  said  premises,  and 
to  institute  and  prosecute  suits  for  the  collection  of  rents  now 
due,  or  hereafter  to  become  due  on  the  aforesaid  premises,  or 
any  part  thereof;  and  to  institute  and  prosecute  summary  pro- 
ceedings for  the  removal  of  any  tenant  or  tenants,  or  other 
persons  therefrom. 

And  said  receiver  is  hereby  authorized,  from  time  to  time,  to 
rent  or  lease,  as  may  be  necessary,  for  terms  not  exceeding  one 
year,  any  of  said  premises  ;  to  keep  the  property  insured  against 
loss  or  damage  by  fire,  and  in  repair,  and  to  pay  the  taxes,  assess- 
ments and  water  rates  upon  said  premises. 

That  said  receiver  is  hereby  authorized  to  employ  an  agent,  if 
he  shall  deem  proper,  to  rent  and  manage  said  premises,  to  collect 
the  rents,  and  to  keep  the  premises  insured  and  in  repair,  and  to 
pay  the  reasonable  value  of  his  services,  out  of  the  rent  received. 

That  during  the  pendency  of  this  action,  the  defendant  and  his 
agents  and  attorneys,  be  enjoined  and  restrained  from  collecting 
the  rents  of  said  premises,  and  from  interfering,  in  any  manner, 
with  the  property  or  its  possession. 

That  the  said  receiver  retain  the  moneys  which  may  come  into 
his  hands,  by  virtue  of  his  said  appointment,  until  the  sale  of  the 
premises  mentioned  in  the  complaint  under  the  judgment  to  be 
entered  in  this  action;  and  that  he  then,  after  deducting  his 
proper  fees  and  disbursements  therefrom,  apply  the  said  moneys 
to  the  payment  of  any  deficiency  there  may  be,  of  the  said  amount 
directed  to  be  paid  to  the  plaintiff,  in  and  by  the  said  judgment; 
and  in  case  there  is  no  such  deficiency,  that  he  retain  the  said 
moneys  in  his  hands,  until  the  further  order  of  this  court  in  the 
premises. 

That  the  said  receiver,  or  any  party  hereto,  may  at  any  time, 
on  proper  notice  to  all  parties  who  may  have  appeared  in  this 
action,  apply  to  this  court  for  further  or  other  instructions  and 
power,  necessary  to  enable  said  receiver  properly  to  fulfill  his 
duties. 


1006  APPENDLX    OF   iUKMS. 

No.  37. 
Bond  of  Receiver. 

\^Title  of  the  action]. 

Know  all  Men  by  these  Presents,  that  we,  J.  B.,  of  the 
of  ,  county  of  ,  and  state  of  ,  as  principal, 

and  O.  P.  and  R.  S.,  of  the  same  place,  as  sureties,  are  held  and 
firmly  bound  unto  the  people  of  the  state  of  ,  in  the  sum 

of  dollars,   to  be  paid  unto  the  said  people  of  the  state 

of  ;  for  which  payment  well  and  truly  to  be  made,  we  bind 

ourselves,  our  heirs,  executors  and  administraLors,  jointly  and 
severally,  firmly,  by  these  presents. 

Sealed  with  our  seals,  and  dated  the  day  of         ,  18     . 

Whereas,  by  an  order  of  this  court,  entered  in  the  above 
entitled  action,  on  the         day  of  ,  18     ,  the  above  boundeii 

J.  B.  was  appointed  receiver  of  the  rents  and  profits  of  the  mort- 
gaged premises  described  in  the  complaint  herein. 

Now,  the  condition  of  this  obligation  is  such,  that  if  the  above 
bounden  J.  B.  shall,  according  to  the  rules  and  practice  of  ihib 
court,  duly  file  his  inventory,  and  annually  or  oftener,  if  thereunto 
required,  duly  account  for  what  he  shall  receive  or  have  in 
charge,  as  receiver  in  the  said  action,  and  apply  what  he  shall 
receive  or  have  in  charge,  as  he  may  from  time  to  time  be 
directed  by  the  court  ;  and  if  he  shall  faithfully  perform  his  duties 
as  such  receiver,  in  all  things,  according  to  the  true  intent  and 
meaning  of  the  aforesaid  order,  then  this  obligation  to  be  void  ; 
otherwise  to  remain  in  full  force  and  virtue. 

[^Signatures  and  seals\. 

County  of  ,  ss.  : 

O.  P.  and  R.  S.,  being  severally  duly  sworn,  say,  each  foi 
himself,  that  he  is  a  householder  {or  freeholder)  in  this  state,  and 
is  worth  the  sum  of  dollars  \double  the  atnoiint  of  the  penalty 

of  the  bond\  over  and  above  all  his  debts  and  liabilities,  and 
exclusive  of  property  exempt  by  law  from  levy  and  sale  under  an 
execution. 

[Jurat\  [^Signatures]. 


County  of  ,  ss.  : 

On  this  day  of         '        ,  18      ,  before  me,  the  subscriber, 

personally  appeared  J.  B.,  O.  P.  and  R.  S.,.to  me  known  to  be 
the  individuals  described  in,  and  who  executed  the  within  instru- 
ment, and  they  severally  acknowledged  to  me  that  they  executed 
the  same. 

[Signature  of  Officer]. 

[Indorsed],  Approved  the  day  of  ,  18     , 

[Signature  of  Judge], 


I  APPENDIX    OF   FORMS.  1007 

No.  38. 

Notice  of  Claim  to  Surplus  Moneys. 

[Title  of  the  action]. 

To  R.  S.,  Esq.,  clerk  of  the  county  of  : 

Sir  : — Take  notice  that  D.  B.,  who  resides  at  ,  in  the 

of  ,  is  entitled  to  the  surplus  moneys,  or  some  part  thereof, 
arising  from  the  sale  of  the  mortgaged  premises,  under  the  judg- 
ment of  foreclosure  and  sale  entered  in  the  above  entitled  action  ; 
that  the  nature  and  the  extent  of  the  claim  of  the  said  D.  B.  is  as 
follows  :   \^State  nature  of  claim,  as\  : 

That  the  said  D.  B.  is  the  owner  of  a  judgment  for         dollars, 
and  interest  from  the  day  of  ,  18     ,  obtained  by  him 

in  the  court,  against  the  defendant  C.  D.,  on  the  day 

of  ,  18     ,  and  docketed  in  the  county  clerk's  office 

on  the         day  of  ,  18     ,  and  while  the  said  defendant  was 

the  owner  of  the  equity  of  redemption  in  the  said  mortgaged 
premises,  and  before  the  sale  thereof  under  foreclosure  ;  that 
there  is  now  due  upon  said  judgment  the  sum  of  dollars, 

with  interest  from  the  day  of  ,  18     ,  and  that  the  said 

D.  B.  claims  that  the  said  judgment  is  a  lien  upon  said  mortgaged 
premises  next  in  priority  after  the  mortgage  of  the  plaintiff  in  this 
action,  and  is  the  first  lien  upon  said  surplus  moneys. 

Dated  the         day  of  ,18. 

D.  B.,  Claimant, 

by  R.  A.,  His  Attorney. 
[Office  and  post-office  address\ 


No.  39. 

Affidavit  on  Motion  for  Reference  to  Distribute  Surplus 

Moneys. 
[Title  of  the  action\. 

County  of  ,  ss.  : 

R.  A.,  being  duly  sworn,  says  that  he  is  attorney  for  D.  B.,  one 
of  the  defendants  in  the  above  entitled  action  {or,  who  had  a  lien 
on  the  mortgaged  premises  at  the  time  of  the  sale  in  this  action). 

That  this  action  was  brought  for  the  foreclosure  of  a  mortgage 
upon  certain  premises  therein  described,  situated  in  the  county 
of 

That  on  the  day  of  ,  18      ,  a  final  judgment  was 

entered  therein,  in  the  county  clerk's  office,  for  the  fore- 

closure of  said  mortgage  and  a  sale  of  said  premises,  and  that  said 
premises  were  sold  pursuant  to  said  judgment,  by  J.  R.,  referee 
\or  sheriff  of  the  county  of  ),  on  the  day  of         ,  18     . 

That  the  report  of  said  referee  {or  sheriff),  dated  ,18     , 

has  been  filed  with  the  clerk  of  the  county  of  ,  by  which 

report  it  appears  that,  after  paying  the  amounts  directed  in  and  by 


1008  APPENDIX   OF   FORMS. 

said  judgment  to  be  paid  out  of  the  proceeds  of  said  sale,  there 
remained  a  surplus  of  dollars,  which  amount  has  been  paid 

by  said  referee  {or  sheriff)  into  court,  and  deposited  with  the 
treasurer  of  county  {or.   in  the   city  of  New    York,   with 

the  chamberlain  of  the  city  of  New  York),  to  the  credit  of  this 
action,  and  for  the  use  of  the  persons  entitled  thereto. 

That  said  D.  B.  is  entitled  to  said  surplus  moneys,  or  some 
part  thereof,  and  that  the  nature  and  extent  of  his  claim  thereto 
are  set  forth  in  the  notice  hereinafter  mentioned,  a  copy  of  which 
is  hereto  annexed. 

That  from  all  the  searches  for  conveyances  and  incumbrances 
made  in  this  action  and  filed  with  the  judgment  roll  herein,  the 
following  and  no  other  unsatisfied  liens  upon  said  surplus  moneys 
appear,  to  wit :  [specify  liens],  and  that  no  other  unsatisfied  liens 
thereon  are  known  to  this  deponent  to  exist. 

That  the  notice  of  the  claim  of  said  D.  B.  to  such  surplus  moneys 
has  been  filed  by  him  with  the  clerk  of  the  county  of  ,  a  copy 
of  which  notice  is  hereto  annexed  and  marked  **  Exhibit  A." 

[Jurat].  R.  A. 


No.  40. 

Notice    of  Motion  for  Reference  to  Distribute  Surplus 

Moneys. 

[  Title  of  the  action] . 

Sirs  : — Take  notice  that  on  the  annexed  affidavit  of  R.  A.,  and 
upon  the  pleadings  and  all  the  proceedings  and  papers  in  this 
action,  the  claimant,  D.  B.,  will  apply  to  this  court,  at  a  term 

thereof,    to   be    held   at  ,  on    the  day   of  ,  18     , 

at  the  opening  of  court  on  that  day,  or  as  soon  thereafter  as 
counsel  can  be  heard,  for  an  order  of  reference  to  a  suitable 
referee  to  be  selected  by  the  court,  to  ascertain  and  report  the 
amount  due  to  D.  B.,  or  to  any  other  person,  which  is  a  lien 
upon  the  surplus  moneys  received  upon  the  sale  of  the  mortgaged 
premises  in  this  action,  and  to  ascertain  the  priorities  of  the 
several  liens  thereon,  to  the  end  that  on  the  coming  in  and 
confirmation  of  the  report  on  said  reference,  such  further  order 
may  be  made  for  the  distribution  of  such  surplus  moneys,  as  may 
be  just,  and  for  such  other  or  further  relief  as  the  court  may 
deem  proper. 

Dated  the  day  of  ,  18     . 

R.  A., 

Attorney  for  Claimant,  D.  B. 
[Office  and  post-office  address]. 
To  T.  R.,  Esq., 

Attorney  for  Plaintiff, 

[Name  the  parties  or  their  attorneys  who  have  appeared  in  the 
action  or  filed  a  notice  of  claim  with  the  clerk,  previous  to  the 
granting  of  the  order  of  reference]. 


APPENDIX   OF   FORMS.  1009 

No.  41. 
Order  of  Reference  as  to  Claims  to  Surplus  Moneys. 

K     .  At  a  term,  eU, 

Present :  Hon.  ,  Judge.  ^  t. 

\_Title  of  the  action\. 

On  reading  and  filing  the  affidavit  of  R.  A.,  and  notice  of  this 
motion,  with  due  proof  of  the  service  thereof  on  all  of  the  parties 
who  have  appeared  herein,  or  who  have  filed  with  the  clerk  of 
this  court,  a  notice  of  claim  to  the  surplus  moneys,  or  some  part 
thereof  ;  and  on  motion  of  R,  A.,  attorney  for  the  claimant  D.  B., 
and  after  hearing  C.  R.,  counsel  for  P,  S.,  in  opposition  thereto, 
{jor,  no  one  appearing  in  opposition  thereto),  it  is 

Ordered,  that  it  be  referred  to  O.  N.,  Esq.,  counselor  at  law, 
of  ,  as  referee,  to  ascertain  and  report  the  amount  due  to  D.  B., 
and  to  every  other  person,  who  has  a  lien  upon  the  surplus  moneys 
in  this  action,  and  to  ascertain  the  priorities  of  the  several  liens 
thereon,  to  the  intent  that  on  the  coming  in  and  confirmation  of  the 
report  of  said  referee,  such  further  order  may  be  made  for  the  distri- 
bution of  such  surplus  moneys,  as  may  be  just,  and  that  the  said 
referee  make  his  report  thereon  with  all  convenient  speed.  \_If 
unsatisfied  liens  appear  from  the  searches  on  file,  or  are  known  to 
exist,  the  court  should  designate  the  manner  of  serving  the  notice  upon 
the  holders  of  such  liens,  for  example  ]  .• 

And  it  is  further  ordered,  that  in  addition  to  the  other  notices 
required  by  the  rules  of  this  court,  notice  of  the  proceedings  on 
such  reference,  be  given  to  G.  H.  and  L.  M.,  either  by  service 
on  them  personally,  or  by  leaving  the  same  at  their  respective 
places  of  residence,  not  less  than         days  prior  to  the  hearing. 


No.  42. 
Subpoena  to  Attend  Reference. 

[^Title  of  the  action]. 

Sirs  : — I,  O.  N.,  the  referee  appointed  by  an  order  of  this  court, 
granted  at  a  term  thereof,  held  at  the  of  ,  on 

the         day  of  ,  18     ,  to  ascertain  and  report  the  amount 

due  to  the  defendant  D.  B.,  and  to  any  other  person  who  has  a 
lien  upon  the  surplus  moneys,  arising  upon  the  sale  of  the  preni- 
ises  described  in  the  complaint  in  this  action,  and  to  ascertain 
the  priorities  of  the  several  liens  thereon,  do  hereby  appoint 
the         day  of  ,  18     ,  at      o'clock  in  the        noon,  for  the 

hearing  of  the  matters  so  referred  to  me,  at  which  time  and  place 
all  parties  concerned  are  to  attend. 

Dated  the         day  of  ,  18    .  O.'^.,  Referee. 

To  .  [JVame  all  the  parties  who  appeared  in  the  action,  or  who 
filed  a  notice  of  claim  with  the  clerk  previous  to  the  entry  _  of  the 
order  of  reference,  also  the  owner  of  the  equity  of  redemption^  and 
all  persons  who  are  known  to  have  unsatisfied  liens\. 

(64) 


1010  APPENDIX    OF   FORMS. 

No.  43. 

Certificate  of  Clerk  as  to  Who  Have  Appeared  and 
Filed  Claims  Against  the  Surplus  Moneys. 

[Tty/e  of  the  action]. 

I,  R.  S.,  the  undersigned,  clerk  of  the  county  of  ,  and  of 

the  above  named  court,  do  hereby  certify,  that  the  following 
named  defendants,  and  no  others,  have  entered  appearances  in  this 
action,  to  wit :  C.  D.,  by  his  attorney,  J.  Z,,  and  D.  B,,  by  his 
attorney,  R.  A. 

I  further  certify,  that  the  following  notices  of  claim  to  the 
surplus  moneys  in  the  above  entitled  action,  and  no  others,  were 
filed  in  my  office,  previous  to  the  entry  of  the  order  of  reference 
as  to  such  surplus  moneys,  to  wit  :  one  claim  on  the  part  of 
C.  D.,  another  on  the  part  of  D.  B.,  {name  other  claims  in  like 
manner];  and  that  no  notice  of  claim  to  such  surplus  was  annexed 
to  the  referee's  report  of  sale,  filed  in  my  office  on  the  day 
of  ,  18    . 

Dated  the        day  of  ,  18    ,  R.  S., 

[Seal].  Clerk. 

No.  44. 
Claim  of  Creditor  Before  Referee,  to  Surplus  Moneys. 

[Title  of  the  action]. 
To  O.  N.,  Referee  : 

The  claim  of  G.  D.,{a judgment)  creditor  of  C.  D,,  the  defend- 
ant in  this  action,  to  the  surplus  moneys  arising  from  the  sale  of 
the  mortgaged  premises  under  the  decree  herein,  respect- 
fully states  that  he  resides  at  ,  in  the  county  of  ,  and 
state  of  ;  that  he  has  a  lien  upon  the  said  surplus  moneys, 
by  virtue  of  a  judgment  recovered  in  the  supreme  court,  against 
the  mortgagor  C.  D.,  for  the  sum  of  dollars,  on  the  day 
of  »  18  ,  and  docketed  in  county  clerk's  office,  on 
the  day  of  18  ,  while  he,  the  said  C.  D.,  was  the 
owner  of  the  equity  of  redemption  in  said  mortgaged  premises, 
and  before  the  commencement  of  this  action,  which  lien  is  next 
in  priority  after  the  mortgage  of  the  plaintiff,  the  whole  of  which 
judgment  is  still  due  and  unpaid. 

Wherefore,  he  claims  the  whole  of  said  surplus  moneys  from 
said  sale,  which  only  amount  to  the  sum  of  dollars^ 

Dated  the        day  of  ,  18    . 

G.  D., 

Claimant. 

County  of  ,  ss. : 

G.  D.,  the  above  named  claimant,  being  duly  sworn,  says  that 
the  facts  set  forth  in  the  above  claim  are  true  ;  that  the  amount 
therein  claimed  as  being  due  to  him  upon  the  judgment  therein 


APPEJJ^DIX    OF   iOKMS.  1011 

mentioned,  is  justly  due  ;  that  neither  he,  nor  any  person  by  his 
order,  to  his  knowledge  or  belief,  or  for  his  use,  has  received  the 
amount  that  is  claimed,  or  any  part  thereof,  or  any  security  or 
satisfaction  whatever  for  the  same,  or  any  part  thereof. 

[furat].  G.  D. 


No.  45. 
Referee's  Report  on  Surplus  Moneys. 

\TitIe  of  the  actio ii\. 

To  the  court  of  : 

I,  the  undersigned,  referee  appointed  by  an  order  of  this  court, 
granted  on  the       day  of  ,  i8     ,  to  ascertain  and  report  the 

amount  due  to  D.  B.,  and  to  any  other  person  who  has  a  lien  upon 
the  surplus  moneys  in  this  action,  and  to  ascertain  and  report  the 
priorities  of  the  several  liens  thereon,  do  respectfully  report  : 

That  I  caused  all  parties  who  have  appeared  in  this  action,  and 
all  persons  who  have  filed  notices  of  claim  upon  the  surplus 
moneys,  and  all  persons  who  were  known  to  have  liens  thereon, 
as  appears  by  the  certificate  of  the  clerk,  which  is  hereto  annexed, 
showing  who  have  appeared  in  the  action  and  filed  notices  of 
claim,  and  by  the  affidavit  of  R.  A.,  attorney  for  the  claimaint 
D.  B.,  showing  what  liens  appear  upon  the  searches  on  file,  to 
be  summoned  to  appear  before  me,  as  appears  from  the  proof  of 
service  of  the  subpcena  herein,  which  is  also  hereunto  annexed. 

That  on  said  hearing  I  was  attended  by  R.  A.,  attorney  for  the- 
claimant,  D.  B.,  and  by  [^sjich  other  persons  as  appeared^  j  that  the 
testimony  of  the  witnesses  upon  such  hearing  was  read  and 
signed  by  them  ;  and  that  such  testimony  and  all  the  evidence, 
except  such  of  it  as  was  documentary,  is  annexed  to  this  report. 

That  from  such  testimony  and  evidence,  I  make  the  following 

Findings  of  Fact  : 

I.  That  the  amount  of  the  surplus  moneys  in  this  action, 
is  the  sum  of  dollars,  as  appears  by  the  certificate  of  the 
county  treasurer  of  the  county  of  .  which  is  hereto  annexed. 

II.  \^Set  forth  the  full  findings  of  fact  of  the  referee  as  in 
the  trial  of  issues  in  an  actiori\. 

And  from  the  foregoing  findings  of  fact,  I  further  find  the 
following 

,,^.i~  Conclusions  of  Law:  ' 

I.  That  there  is  due  and  owing  to  the  said  claimant  D.  B.,  the 
sum  of  dollars,  and  interest  thereon,  from  ,  i8      , 

amounting  at  the  date  of  this  report,  to  the  sum  of  dollars, 

upon  and  by  virtue  of  said  judgment  recovered  by  him  against 
the  said  C.  D.,  as  aforesaid,  and  that  the  said  amount  is  the  first 
lien  on  the  said  surplus  moneys  in  this  action. 


1012  APPENDIX    OF   FORMS. 

II.  {Continue  in  the  order  in  which  the  Hem  are  found  until  the 
whole  fund  is  disposed  of}. 

Dated  the        day  of  ,  i8    . 

O.  N., 
Referee, 

No.  46. 

Notice  of  Motion  to   Confirm  Report  and  to 
Distribute  Surplus. 
\Title  of  the  action}. 

Sirs  : — Take  notice,  that  the  report  of  O.  N.,  Esq.,  the  referee 
appointed  herein  to  ascertain  and  report  the  amount  due  to 
D.  B.,  and  to  any  other  person,  who  has  a  lien  on  the  surplus 
moneys  in  this  action,  and  to  ascertain  the  priorities  of  the 
several  liens  thereon,  was  this  day  duly  filed  in  the  office  of 
the  clerk  of  the  county  of 

Also  that  upon  said  referee's  report,  and  upon  the  testimony 
and  papers  annexed  thereto,  the  claimant  D.  B.,  will  apply  to  this 
court,    at   a  term   thereof,    to   be   held   at  ,  on 

the         day  of  ,  18     ,  at  the  opening  of  court  on  that  day, 

or  as  soon  thereafter  as  counsel  can  be  heard,  for  an  order  con- 
firming said  report,  and  directing  the  treasurer  of  county  to 
pay  to  the  claimant  D.  B.,  or  to  his  attorney,  the  sum  of  dol- 
lars, with  interest  thereon,  from  the  day  of  »  18  ,  the 
date  of  said  report,  out  of  said  surplus  moneys,  together  with  an 
allowance  by  way  of  costs  in  this  proceeding,  and  for  such  other 
and  further  relief  as  may  be  just. 

Dated  the         day  of  ,  18     . 

R.  A., 
Attorney  for  said  Claimant^  D,  B, 
To 

\^Names  of  all  parties  to  whom  the  subpoena  in  Form  No.  42  wcu 
addressed}. 

No.  47. 

Order   Confirming   Report    of  Referee  and    Directing 
Distribution  of  Surplus  Moneys. 

At  a  term,  etc. 

Present :  Hon.  ,  Judge. 

\_Title  of  the  action}. 

On  the  report  of  O.  N.,  Esq.,  the  referee  appointed  herein  to 
ascertain  and  report  the  amount  due  to  D.  B.,  and  to  any  other 
person,  which  amount  is  a  lien  on  the  surplus  moneys  in  this 
action,  and  to  ascertain  the  priorities  of  the  several  liens  thereon, 
which  report  was  dated  the  day  of  ,  18     ,  and  filed  in 

the  office  of  the  clerk  of  this  court,  on  the         day  of  ,  18     , 


APPENDIX   OF   JOEMS.  1013 

and  on  all  of  the  testimony  and  papers  annexed  to  said  report 
and  filed  therewith  ;  and  it  appearing  that  due  notice  of  the 
filing  of  said  report  and  of  this  motion  has  been  given  to  the  attor- 
neys for  the  parties  who  have  appeared  in  this  proceeding  and 
who  filed  notices  of  claim  to  such  surplus  moneys  previous  to  the 
entry  of  said  order  of  reference,  and  after  hearing  R.  A.,  attorney 
for  the  claimant  D.  B.,  in  support  of  this  motion,  and  P.  S., 
attorney  for  the  claimant  G.  D.,  in  opposition  thereto,  it  is 

Ordered,  that  the  said  report  be,  and  the  same  hereby  is,  in  all 
things  confirmed,  and  that  the  treasurer  of  county  pay  out  and 
distribute  the  moneys  in  his  hands  to  the  credit  of  this  action, 
after  deducting  therefrom  the  fees  and  commissions  allowed  to 
him  by  law,  as  follows  and  in  the  following  order  of  priority  : 

I.  That  he  pay  to  O.  N.,  Esq.,  referee  in  this  proceeding,  the 
sum  of  dollars,  for  his  fees  as  such  referee. 

II.  That  he  pay  to  R.  A.,  attorney  for  the  claimant  D.  B.,  the 
sum  of  dollars,  as  an  allowance  by  way  of  costs  in  this  pro- 
ceeding. 

III.  That  he  pay  to  the  claimant  D.  B.,  or  to  his  attorney  R. 
A.,  the  sum  of  dollars,  and  interest  thereon  from  the  day 
of             »  i8     ,  the  date  of  said  referee's  report. 

IV.  That  he  pay  to  the  claimant  C.  R.,  or  to  his  attorney  P.  S., 
the  sum  of  dollars,  and  interest  thereon  from  the  day 
of             >  i8     ,  the  date  of  said  referee's  report. 

V.  That  he  pay  to  the  claimant  C.  D.,  or  to  his  attorney  J.  Z., 
the  balance  of  said  surplus  moneys. 


No.  48. 
Complaint  in  Action  for  Strict  Foreclosure. 

[^Title  of  the  action]. 

\Commence  as  in  complaint  in  action  to  foreclose  by  a  sale,  folloiv- 
ing  Form  No.  i  to  atid  including  paragraph  VI.,  so  far  as  that 
form  may  apply\. 

That  thereafter  the  said  E.  F.  commenced  an  action  in  the 
court,  in  the  county  of  ,  against  C.  D.,  M.  D.  and 

J.  H.,  for  the  foreclosure  of  the  said  mortgage  and  for  a  sale  of 
said  mortgaged  premises,  to  satisfy  and  discharge  said  indebted- 
ness ;  that  such  proceedings  were  had  in  said  action  that,  on 
the  day  of  ,  18     ,  it  was  duly  ordered  and  adjudged 

by  the  said  court,  that  the  said  mortgaged  premises,  or  so  much 
thereof  as  might  be  necessary  to  raise  the  amount  then  due  to  the 
said  E.  F.,  for  principal,  interest  and  costs,  and  which  might  be 
sold  separately  without  material  injury  to  the  parties  interested, 
be  sold  at  public  auction,  in  the  county  of  ,  by  and  under  the 

direction  of  J.  R.,  Esq.,  counselor  at  law,  who  was  duly  appointed 


1014  APPEJJfDIX   OF   FOllMS. 

referee;  that  subsequently  to  the  entry  of  said  judgment,  and  in  pur- 
suance thereof,  the  said  referee  duly  sold  said  mortgaged  premises 
at  public  auction  to  this  plaintiff,  and  this  plaintiff  duly  paid  to 
him  the  purchase  money  therefor  and  received  from  him  a  deed  of 
conveyance  thereof,  all  of  which  will  more  fully  appear  by  said  deed 
of  conveyance,  which  was,  on  the    day  of  ,  1 8     ,  duly  recorded 

in  the  office  of  the  clerk  of  county,  in  book  No.     of  deeds, 

at  page  ,  by  the  report  of  sale  of  said  referee,  which  was  duly 
filed  in  the  office  of  said  clerk,  on  the         day  of  ,  i8     ,  and 

by  the  order  of  said  court  confirming  said  report  of  sale,  which 
was  duly  entered  in  said  action,  on  the         day  of  ,  i8     . 

That  under  said  foreclosure  and  sale  and  the  said  deed  of 
conveyance  of  said  referee,  executed  in  pursuance  of  said  judg- 
ment, the  plaintiff  entered  into  possession  of  said  mortgaged 
premises  and  the  receipt  of  the  rents  and  profits  thereof,  and 
has  since  continued  and  still  is  in  possession  thereof ;  that  he  then 
believed  he  had  acquired,  under  said  foreclosure,  a  perfect  title 
to  the  said  mortgaged  premises,  free  from  all  liens  and  incum- 
brances, but  that  he  has  since  been  informed,  and  believes, 
that  the  defendant  ,  has,  or  claims  to  have,  an  interest  in  or 

a  lien  upon  the  said  premises  by  virtue  of  a  certain  mortgage 
[describe  tt\  the  lien  of  which  mortgage  was  and  is  inferior  and 
subsequent  to  the  lien  of  the  mortgage  under  which  said  fore- 
closure sale  was  made. 

That  this  plaintiff  is  advised  that  he  has  acquired  by  said  fore- 
closure the  title  to  the  said  mortgage  under  which  said  sale  was 
had,  and  also  the  right  which  C.  D.  and  M.  D.,  his  wife,  who 
were  defendants  in  said  action,  had  to  redeem  from  the  mortgage 
held  or  claimed  by  the  plaintiff,  the  said  C.  D.  being,  at  the  time 
of  the  commencement  of  said  foreclosure,  the  owner  in  fee  of  the 
title  and  equity  of  redemption  of  said  premises  ;  that  the  amount 
which  was  due  and  owing  to  the  plaintiff  in  said  action  on  the 
said  mortgage,  at  the  time  of  the  entry  of  said  decree  of  fore- 
closure and  sale,  exclusive  of  the  costs  and  expenses  of  said 
action,  and  of  said  sale,  was  the  sum  of  dollars,  and  interest 

thereon  from  the  day  of  ,  i8      ,  no  part  of  which  has 

been  paid,  except  as  it  was  paid  by  the  proceeds  of  said  sale, 
under  which  this  plaintiff  claims. 

That  this  plaintiff  has  laid  out  and  expended  large  sums  for 
permanent  improvements  and  repairs  upon  said  premises,  to  wit : 
[Describe  the  iinprovements  and  state  their  cost  and  value\. 

That  the  rents  and  profits  received  by  this  plaintiff  from  said 
premises,  have  not  been  so  great  in  amount  as  the  annual  interest 
on  said  mortgage,  under  which  said  foreclosure  was  had,  and  have 
not  amounted  to  more  than  the  sum  of  dollars  ;  that  the 

plaintiff  claims  that  the  amounts  paid  by  him  for  taxes,  assess- 
ments and  repairs,  and  the  value  of  the  permanent  improvements 
made  by  him  as  aforesaid,  should  be  allowed  to  him  and  added 
to  the  amount  of  said  mortgage  and  interest  thereon,  and  that 
there  is  now  due  and  owing  to  him  thereon,  the  sum  of  dollars. 


APPENDIX   OF   rOEMS.  1013 

That  the  plaintiff  has  applied  to  said  defendant  ,  and 

requested  him  to  pay  the  plaintiff  the  said  sums  so  due  on  the  said 
mortgage  held  by  theplaintiff,  or  to  come  to  an  accounting  with  him 
thereon,  and  after  the  proper  charges  and  credits,  to  pay  to  the  said 
plaintiff  what  should  appear  to  be  due  him  on  the  said  mortgage  ; 
or,  in  default  thereof,  to  release  his  right  and  equity  of  redemp- 
tion in  the  said  mortgaged  premises;  but  that  the  said  defendant 
has  hitherto  refused,  and  still  refuses  so  to  do,  or  to  comply  with 
any  part  of  said  plaintiff's  request. 

Wherefore,  the  plaintiff  demands  judgment,  that  an  account 
may  be  taken  of  what  is  due  and  owing  to  the  plaintiff  for  princi- 
pal and  interest  on  said  mortgage,  and  that  an  account  may  also 
be  taken  of  the  rents  and  profits  of  the  said  mortgaged  premises 
which  have  been  received  by  the  plaintiff,  and  also  of  the  expendi- 
tures of  the  plaintiff  for  permanent  improvements  and  repairs, 
and  for  taxes  and  assessments. 

That  the  said  defendant  pay  to  the  plaintiff  what  may  be  due 
him  on  taking  the  said  account,  with  the  costs  of  this  action, 
within  a  time  to  be  appointed  by  the  court  for  that  purpose  ;  or, 
in  default  thereof,  that  the  said  defendant  and  all  persons  claim- 
ing under  him  be  absolutely  barred  and  foreclosed  of  and  from 
all  right,  title  and  equity  of  redemption  in  and  to  the  said  mort- 
gaged premises,  and  each  and  every  part  thereof,  and  that  the 
plaintiff  have  such  other  or  further  relief,  or  both,  in  the  premises 
as  may  be  just  and  equitable. 

T.  R., 

Plaintiff's  Attorney. 

\Add  verification  in  the  usual  form\. 


No.  49. 
Judgment  for  Strict  Foreclosure. 

At  a  term,  etc. 

Present :  Hon.  ,  Judge. 

[  Title  of  the  action\ 

\C0m7nence  by  reciting  the  proceedings  in  the  action,  which  wilt, 
be  similar  to  Form  No.  17.  In  all  cases,  an  affidavit  of  filing  the 
notice  of  pendency  of  action,  similar  to  Form  No.  9,  must  be  fur - 
fiished  when  applying  for  judgment,  and  should  be  recited.  The 
following  will  be  the  essential  parts  of  the  Judgment^  : 

It  is  adjudged  that,  upon  the  defendant's  paying  unto  the  said 
plaintiff  the  amount  which  is  so  found  and  reported  due  to  him, 
as  aforesaid,  with  interest  thereon,  from  the  date  of  said  report, 
together  with  the  further  sum  of  dollars,  and  interest,  from 

this  date,  which  is  hereby  adjudged  to  the  plaintiff  for  his  costs 
and  charges  in  this  action,  within  six  months  after  the  entry  of 
this  judgment,  and  service  of  notice  thereof  upon  the  attorney  for 


1016  APPENDIX   OF   FOEMS. 

the  defendant,  said  payment  to  be  made  at  the  office  of  T.  R., 
Esq.,  attorney  for  the  plaintiff,  No.  street,  in  the 

of  ,  between  the  hours  of  lo  a.  m.  and  3  p.  m.  of  any  busi- 

ness day,  on  or  before  the  expiration  of  the  said  six  months,  and 
Avhich  said  day  shall  have  been  named  by  the  said  defendant  in  a 
notice  in  writing,  to  be  served  by  him  on  said  attorney  for  the 
plaintiff,  not  less  than  five  days  prior  to  said  date;  the  said  plaintiff 
do  then  convey  the  said  mortgaged  premises  to  the  said  defen- 
dant, by  a  suitable  and  proper  deed  of  conveyance,  to  be 
approved  by  this  court,  in  case  the  parties  can  not  agree  upon  the 
form  thereof,  free  and  clear  of  all  incumbrances  suffered  by  him, 
or  by  any  person  claiming  by,  from  or  under  him,  (and  with  the 
usual  covenants  against  his  and  their  acts) ;  and  that  he  deliver  up 
all  deeds  and  writings  in  his  custody  relating  thereto,  upon  oath, 
to  the  said  defendant,  or  to  whomsoever  he  may  appoint  to 
receive  the  same ;  and  further,  that  the  said  plaintiff  execute  and 
acknowledge  a  certificate  to  cancel  and  discharge  said  mortgage 
of  record.  But  in  default  of  the  said  defendant's  paying  unto 
the  plaintiff  such  principal,  interest  and  costs,  as  aforesaid,  by 
the  time  limited  for  that  purpose,  then  it  is  adjudged  that  the 
said  defendant,  and  all  persons  claiming  by,  from  or  under  him, 
after  the  filing  of  the  aforesaid  notice  of  pendency  of  this 
action,  do  stand  and  be  forever  barred  and  foreclosed  of  and 
from  all  right,  title,  interest  and  equity  of  redemption  in  and  to 
the  said  mortgaged  premises,  and  every  part  thereof. 

The  following  is  a  description  of  the  said  mortgaged  premises 
herein  mentioned  :  \_Insert  descriptio7i  ]. 


No.  50. 
Order  Extending  Time  for  Redemption. 

At  a  term,  etc. 

Present :  Hon.  ,  Judge. 

[  Title  of  the  action\. 

On  reading  and  filing  the  affidavit  of  the  defendant,  and  notice 
of  this  motion,  with  proof  of  the  due  service  thereof,  and  on  all  of 
the  papers  and  proceedings  herein ;  and,  after  hearing  M.  N., 
attorney  for  said  defendant,  on  his  motion,  and  T.  R.,  attorney  for 
the  plaintiff,  in  opposition  thereto,  it  is 

Ordered,  that  the  time  granted  to  the  said  defendant  ,  in 

and   by  the  judgment   entered  in   this  action,  on   the  day 

of  ,  i8      ,  and   within   which   time   he  was   required    to 

redeem  the  mortgaged  premises  by  paying  the  amount  due  to  the 
plaintiff  for  principal,  interest  and  costs  or  stand  foreclosed,  be, 
and  the  same  is  hereby  extended  and  enlarged  for  months, 
upon  condition  that  the  said  defendant  shall,  within  ten  days 
after  the  entry  of  this  order,  pay  to  the  plaintiff  the  sum 
of  dollars,  costs  of  this  motion. 


APPENDIX   OF   rOKMS.  1017 

No.  51.        "'* 
Final  Order  in  Strict  Foreclosure. 

At  a  term,  etc. 

Present :  Hon.  ,  Judge. 

[  Title  of  the  action]. 

Upon  the  judgment  entered  in  this  action,  on  the  day 

of  >  18     ,  and  on  reading  and  filing  the  notice  of  the  entry 

of  said  judgment,  with  due  proof  of  the  service  thereof  on  the 
defendant,  and  upon  the  affidavit  of  the  plaintiff  showing  that 
the  defendant  has  not  paid  the  amount  due  to  the  plaintiff  for 
principal,  interest  and  costs,  or  any  part  thereof,  though  more 
than  six  months  have  expired  since  the  said  service  of  the  notice 
of  the  entry  of  said  judgment  as  aforesaid  ;  and  on  due  notice  of 
this  motion,  with  due  proof  of  the  service  thereof  ;  and  after 
hearing  T.  R,,  attorney  for  the  plaintiff,  in  support  of  this  motion, 
and  M.  N.,  counsel  for  the  defendant,  in  opposition  thereto,  it  is 

Ordered,  that  the  said  defendant  ,  and  all  persons  claim- 

ing under  him,  after  the  filing  of  the  notice  of  the  pendency  of 
this  action,  stand  and  be  forever  absolutely  barred  and  fore- 
closed of  and  from  all  right,  title,  interest  and  equity  of  redemp- 
tion in  the  mortgaged  premises  described  in  said  judgment,  and 
in  each  and  every  part  thereof. 


No.  52. 
Notice  of  Sale  on  Foreclosure  by  Advertisement. 

Whereas,  default  has  been  made  in  the  payment  of  the  money 
secured  by  a  mortgage  dated  the        day  of  ,  18    ,  executed 

by  C.  D.  and  M.  D.,  his  wife,  of  ,  to  E.  F.,  of   the  same 

place,  which  mortgage  was  recorded  in  the  office  of  the  clerk 
of  the  county  of  ,  on  the         day  of          ,18     ,  at     o'clock 

M.,  in  book   No.         of  mortgages,  at  page  ,  (and  which 

said  mortgage  was  assigned  by  the  said  E.  F.  to  H.  O.,  by  an 
assignment   of   mortgage  dated  the         day  of  ,  18     ,  and 

recorded  in   the  county  clerk's  office,  in  book  No.         of 

assignments  of  mortgages,  at  page  ,  on  the         day  of  , 

18     ,  and  the  said  H,  O.  is  now  the  owner  and  holder  thereof). 

And  whereas,  the  amount  claimed  to  be  due  on  said  mortgage 
at  the  time  of  the  first  publication  of  this  notice,  is  the  sum 
of  dollars,  as  follows  :  the  sum  of  dollars  principal, 

and  the  sum  of  dollars  interest,  which  said  sum  of  dollars 
is  the  whole  amount  claimed  to  be  unpaid  upon  said  mortgage. 

Now,  therefore,  notice  is  hereby  given  that,  by  virtue  01  the 
power  of  sale  contained  in  said  mortgage,  and  duly  recorded,  as 
aforesaid,  and  in  pursuance  of  the  statute  in  such  case  made 
and  provided,  the  said  mortgage  will  be  foreclosed  by  a  sale  of 


1018  APPENDIX    OF    FORMS. 

the  premises   therein   described,  at  public  auction,  at  ,  in 

the  city  of  ,  in  the  county  of  ,  on  the         day  of  , 

i8     ,  at        o'clock  in  the         noon  of  that  day. 

The  said  premises  are  described  in  said  mortgage  as  follows  : 
[Insert  description\, 

E.  F.,  Mortgas^ee, 
{or  Assignee  of  Mortgage^. 
T.  R.,  Attorney  for  Mortgagee, 

{or  Assignee^. 


No.  53. 
Notice  of  Sale  on  Foreclosure  by  Advertisement. 

Short  Form. 

Mortgage  Sale. — Mortgagors  C.  D.  and  M.  D.,  his  wife  ; 
mortgagee  E.  F.  ;  assignee  H.  O. ;  second  assignee  and 
present  owner  and  holder  of  the  mortgage,  G.  H.  Mortgage 
dated  ,18     ,   and  recorded    in  the  office  of  the    clerk   of 

county,  on   the         day  of  ,  18     ,  in  book  No.       of 

mortgages,  at  page  .  The  amount  claimed  to  be  due  upon 
said  mortgage  at  the  date  of  the  first  publication  of  this  notice,  is 
the  sum  of  dollars. 

Default  having  been  made  in  the  payment  of  the  moneys 
secured  by  said  mortgage,  and  no  suit  or  proceedings  at  law  or 
otherwise,  having  been  commenced  to  recover  said  mortgage 
debt,  or  any  part  thereof  ;  now,  therefore,  notice  is  hereby  given, 
according  to  the  statute  in  such  case  made  and  provided,  that  by 
virtue  of  the  power  of  sale  contained  in  said  mortgage,  and  duly 
recorded  therewith  as  aforesaid,  the  said  mortgage  will  be  fore- 
closed by  a  sale  of  the  premises  therein  described,  by  the  sub- 
scriber, at  public  auction,  at  ,  on  the  day  of  »  18  , 
at         o'clock  in         noon  of  that  day. 

The  said  premises  are  described  in  said  mortgage  as  follows  : 
\Insert  description]. 

Dated  the         day  of  ,  18     . 

G.  H., 

T.  R.,  Assignee  of  Mortgage. 

Attorney. 

No.  54. 
Affidavit  of  Affixing  Notice  by  County  Clerk. 

County  of  ,  ss. : 

R.  S.,  being  duly  sworn,  says  that  he  is  clerk  of  the  county 
of  ^  ,  that  being  the  county  in  which  the  mortgaged  premises 
described  in  the  annexed  printed  notice  of  foreclosure  and  sale 
are  situated  ;  that  on  the         day  of  ,  18     ,  he  received  a 

printed  copy  of  the  annexed  notice  of  sale,  and  that  immediately, 


APPENDIX    OF   FOKMS.  lUl9 

to  wit  :  on  the  same  day,  he  affixed  the  same  in  a  book  prepared 
and  kept  by  him  for  that  purpose,  and  also  immediately  entered 
in  said  book  a  minute  at  the  bottom  of  such  notice,  of  the  time 
of  receiving  and  affixing  the  same,  duly  subscribed  by  deponent 
as  clerk  of  said  county;  and  that  he  also  immediately  indexed 
the  same  against  the  name  of  the  mortgagor,  in  said  notice  named. 

Deponent  further  says,  that  the  time  when  he  did  and  per- 
formed said  acts,  was  at  least  eighty-four  days  before  the  day  of 
sale  in  said  notice  specified  for  the  sale  of  the  mortgaged  prem- 
ises therein  described. 

\Jurat\.  R.  S. 

No.  55. 

Affidavit  of  Affixing  Notice  of  Sale  to  Outer  Door  of 

Court  House. 

County  of  ,  ss. : 

,  being  duly  sworn,  says  that  he  resides  at  ,  and 

is  more  than  twenty-one   years   of  age  ;    that   on   the  day 

of  ,  18     ,  and  at  least  eighty-four  days  prior  to  the  time 

specified  in  the  annexed  printed  notice  of  foreclosure  for  the  sale 
of  the  mortgaged  premises  therein  described,  he  fastened  up  a 
printed  copy  of  said  notice  in  a  conspicuous  place  and  in  a  proper 
and  substantial  manner,  at  or  near  the  entrance  of  the  court  house 
or  building,  in  the  county  of  ,  where  the  county  courts  are 

directed  to  be  held  in  and  for  said  county  of  ,  which  is  the 

county  in  which  said  mortgaged  premises  are  situated,  that 
being  the  building  in  which  the  courts  in  said  county  are  directed 
to  be  held,  nearest  to  the  mortgaged  premises. 

No.  56. 

Affidavit  of  Publishing  Notice  of  Sale. 

County  of  ,  ss.: 

,  being  duly   sworn,  says  that  he  resides  in  the  city 
of  ,  in  the  county  of  ,  and  is  more  than  twenty-one 

years  of  age  ;  that  during  the  time  of  the  publication  of  the 
notice  hereinafter  mentioned,  he  was  (the  foreman  of)  the  printer 
of  the  ,  a  newspaper,  printed  and  published  at  ,  in 

said  county  of  ,  that  being  the  county  in  which  the  premises 

described  in  the  annexed  printed  notice  of  sale,  or  a  part  thereof, 
are  situated. 

Deponent  further  says  that  the  notice  of  the  mortgage  sale,  a 
printed  copy  of  which  is  hereto  annexed,  was  published  in  said 
newspaper  at  least  once  in  each  of  the  twelve  weeks  immediately 
preceding  the  day  of  sale  in  said  notice  mentioned,  said  publica- 
tion having  been  commenced  on  the  day  of  ,  18  ,  and 
ended  on  the     day  of        ,18     .  \^If  there  have  been  adjournments, 


1020  APPENDIX    OF   10 RMS. 

add'\:  And  deponent  further  says  that  the  notice  of  postpone- 
ment annexed  to  said  notice  of  sale  was  also  published  in  said 
newspaper,  on  the  day  of  ,  i8      ,  and  on  the  day 

of  ,  i8      ,  in  the  form  shown  in  said  annexed  printed  copy 

thereof. 

U^rai\.  

No.  57. 
Affidavit  of  Serving  Notice  of  Sale. 

County  of  ,  ss. : 

,  being  duly  sworn,  says  that  he  resides  at  ,  and 

is  over  twenty-one  years  of  age  ;  that  on  the  day  of  , 

18     ,  at  ,  he  served  the  annexed  notice  of  sale  on  ,by 

delivering  to  and  leaving  with  him,  personally,  a  true  copy  thereof. 

That  deponent  served  the  annexed  notice  of  sale  on  ,  by 

leaving  a  true  copy  thereof,  which  was  legibly  addressed  to  him, 
at  his  dwelling  house,  at  >  in  the  city  of  ,  in  charge 

of  a  person  of  full  age,  who  received  the  same  for  him. 

That  on  the         day  of  ,  18     ,  he  served  the  said  annexed 

notice  of  sale  upon  each  of  the  following  named  persons  by  depos- 
iting true  copies  thereof  in  the  post-office  at  the  city  of  ,  duly 
enclosed  and  sealed  in  a  post-paid  wrapper  and  directed  to  each 
of  said  persons  at  their  respective  places  of  residence,  as  follows: 
to  ,  at  ;  to  ,  at  ;  to  ,  at  ; 

that  the  postage  on  each  of  said  notices  was  prepaid,  and  that  the 
said  persons  were  known  to  deponent  to  reside  at  the  several 
places  to  which  the  notices  to  them  were  respectively  directed. 

[Jurai\.  

No.  58. 
Affidavit  of  Fact  of  Sale. 
County  of  ,  ss. : 

,  being  duly  sworn,  says  that  he  resides  at  ,  in 

the  city  of  ,  in  the  county  of  ,  and  is  over  twenty- 

one  years  of  age  ;  that  at  ,  in  the  city  of  ,  in  the  county 

of  ,  on  the  day  of  ,  18      ,  at  o'clock  in 

the  noon  of  that  day,  he  officiated  as  auctioneer  at  the  mortgage 
foreclosure  sale  of  the  premises  described  in  the  notice  of  sale,  a 
printed  copy  of  which  is  hereto  annexed,  pursuant  to  such 
notice,  and  by  virtue  of  the  power  of  sale  contained  in  the  mort- 
gage, which  is  therein  mentioned  ;  that  said  sale  took  place  at 
said  time  and  place  and  that  the  whole  of  said  premises  were  then 
and  there  sold  in  one  parcel  to  S.  R.,  for  the  sum  of  dollars, 

he  being  the  highest  bidder  therefor,  and  that  being  the  highest 
sum  bidden  for  the  same. 

Deponent  further  says  that  such  sale  was  at  public  auction,  in 
the   day   time,  and   in   all    respects  honestly,  fairly  and  legally 


APPENDIX   OF   FORMS.  1021 

conducted,  according  to  deponent's  best  knowledge  and  belief ; 
that  the  premises,  so  far  as  the  same  consist  of  separate  tracts,. 
farms  or  lots,  were  sold  separately,  and  no  more  tracts,  farms  or 
lots  were  sold  than  were  necessary  to  satisfy  the  amount  claimed 
to  be  due  on  said  mortgage  at  the  time  of  such  sale,  together  with 
the  costs  and  expenses  allowed  by  law ;  that  the  following  is  a 
description  of  the  premises  sold  :  {Insert  description\. 
[Jurai\. 

No.  59. 

Petition  by  Purchaser  Under  Foreclosure  by  Adver- 
tisement, to  Obtain  Possession. 

To  the  county  judge  of  the  county  of  : 

The  petition  of  G.  R.,  of  ,  in  the  county  of         ,  respect- 

fully shows : 

That  heretofore  C.  D.,  being  the  owner  of  the  premises  herein- 
after described,  and  being  indebted  to  E.  F.,  in  sum  of  dol- 
lars, upon  his  bond  for  that  sum,  dated  the  day  of  » 18  , 
and  payable  in  one  year  after  that  date,  with  interest  thereon, 
payable  semi-annually,  executed,  with  M.  D.,  his  wife,  duly 
acknowledged  and  delivered  to  the  said  E.  F.,  a  mortgage,  to 
secure  the  payment  of  said  bond,  bearing  even  date  therewith,  and 
recorded  in  the  office  of  the  clerk  of  the  county  of  ,  in  book 
No.  of  mortgages,  at  page  ,  on  the  day  of  ,  18  , 
whereby  they  granted  and  conveyed  unto  the  said  E.  F.,  the 
following  described  premises,  to  wit :  {Insert  description^ 

That  said  mortgage  contained  a  like  condition  as  the  said  bond, 
and  that  it  also  contained  a  power  of  sale,  whereby  in  case  of 
default  in  the  payment  of  the  said  sum  of  money,  the  interest  that 
might  grow  due  thereon,  or  any  part  thereof,  the  said  E.  F., 
or  his  assigns,  were  duly  empowered  to  sell  said  mortgaged  prem- 
ises in  due  form  of  law,  and  out  of  the  moneys  arising  from 
the  said  sale,  to  pay  the  said  sum  of  money  and  interest,  with  the 
costs  and  expenses  of  the  proceedings  thereupon,  the  surplus,  if 
any,  to  be  returned  to  the  said  mortgagor ;  (that  thereafter  the 
said  E.  F.  duly  assigned  said  bond  and  mortgage  to  H.  O.);  that 
thereafter  default  was  made  in  the  payment  of  the  money  secured 
by  the  said  mortgage,  whereupon  the  said  E.  F.  commenced 
proceedings  by  virtue  of  said  power  of  sale  contained  in  said 
mortgage,  and  in  pursuance  of  the  statute  in  such  case  made  and 
provided,  to  foreclose  the  said  mortgage,  by  a  sale  of  the  premises 
therein  described,  at  public  auction  ;  that  due  notice  of  the  time 
and  place  of  such  sale  was  given,  in  the  manner  required  by 
law  ;  and  that  thereafter,  to  wit :  on  the         day  of  ,  18     , 

the  said  premises  were,  under  the  said  power  of  sale,  duly  sold  to 
and  purchased  by  your  petitioner,  for  the  sum   of  dollars, 

that  being  the  highest  sum  bidden  for  the  same  ;  that  the 
affidavits  of  publication  and  of  affixing  the  notice  of  sale,  and  of 


1022  APPENDIX    OF   FORMS. 

the  service  of  such  notice,  and  of  the  circumstances  of  the  sale, 
showing  such  foreclosure  and  the  proceedings  thereupon,  and 
which  affidavits  are  required  by  law  to  be  made,  were  duly  made, 
and  that  they  were  on  the         day  of  >  i8     ,  duly  filed  in 

the  office  of  the   clerk  of  the  county  of  ,  that   being    tlie 

county  where  the  said  mortgaged  premises  were  and  are  situated, 
and  where  said  sale  took  place  ;  and  that  they  were  also  on  that 
day  duly  recorded  at  length  by  such  clerk,  in  a  book  kept  by  him 
in  said  office  for  the  record  of  mortgages,  in  book  No.  of  mort- 
gages, commencing  at  page  ;  that  after  the  title  to  said 
mortgaged  premises  had  been  duly  perfected  in  this  petitioner, 
by  the  filing  and  recording  of  said  affidavits,  as  aforesaid,  this 
petitioner  demanded  possession  of  the  said  premises  from  the  said 
C.  D.,  who  was  then  and  is  now  in  possession  thereof,  {or  from 
J.  H.,  who  was  then  and  is  now  in  possession  thereof,  claiming  to 
hold  the  same  by  some  right  or  title  derived  from  the  said  C.  D., 
the  said  mortgagor,  subsequently  to  the  execution  and  delivery  of 
said  mortgage,  by  virtue  of  said  title  under  said  foreclosure);  and 
that  the  said  C.  D.  {or  J.  H.)  refused,  and  still  refuses  to  sur- 
render said  possession,  and  that  he  holds  over  and  continues  in 
possession  of  the  said  premises  after  the  perfection  of  said  title 
in  said  foreclosure  proceedings  and  after  such  demand  aforesaid, 
without  permission  of  this  petitioner,  who  is  entitled  to  the 
possession  thereof. 

Your  petitioner  therefore  prays  for  a  final  order  to  remove  the 
said  C.  D.  {or  J.  H.),  and  all  persons  holding  under  him  from  the 
possession  of  said  premises,  and  for  such  other  or  further  relief 
as  may  be  just,  together  with  the  costs  of  this  proceeding. 

Dated  the         day  of  -         ,  18     .  ...        '  ■  -.^^ 

O.  R.,  Attorney  for  Petitioner, 

[Add  verification  in  the  usual  form]. 


No.  60. 
Precept  to  be  Issued  on  Foregoing  Petition. 

Before  the  County  Judge  of  county. 


G.  R., 

^  Petitioner, 

against 
C.  D.  {or  J.  H.), 

In  Possession. 


The  People  of  the  State  of  New  York : 

To  C.  D,  {or  J.  H.),  above  named,  and  each  and  every  person 
in  possession  of  the  premises  hereinafter  described  : 

You,  and  each  of  you,  are  hereby  required  forthwith  to  remove 
from  the  premises  described  as  follows :  [^Insert  description]  ;  or 


APPENDIX   OF   FORMS.  1023 

to   show  cause  before   me,   the   county  judge   of    the    county 
of  ,  at  the  court  house,  in  the  of  ,  in  the  county  of 

,  aforesaid,  on  the         day  of  ,  i8     ,  at  o'clock, 

in  the         noon  of  that  day,  why  the  possession  of  said  premises 
should  not  be  delivered  to  said  petitioner/ 
Dated  the         day  of  ,  i8     . 

\_Signature  of  County  Judge\. 


No.  6i. 
Final  Order  in  Summary  Proceedings. 

\Title  as  in  precept\ 

The  petitioner,  G.  R.,  having  appeared  on  the       day  of  , 

i8  ,  and  the  precept  issued  herein  having  then  been  returned 
with  due  proof  of  the  service  thereof,  and  the  petitioner  having 
then  demanded  possession  of  the  premises  described  in  his 
petition,  which  petition  was  dated  and  verified  on  the  day 

of  ,  i8     . 

And  the  respondent,  C.  D.,  in  possession,  having  then  also 
appeared  by  his  attorney  and  filed  his  verified  answer  to  said 
petition,  and  the  issue  thus  made  having  been  duly  tried  before 
the  said  county  judge  without  a  jury,  who,  after  hearing  the 
allegations  and  proofs  of  the  parties,  rendered  his  decision  in 
favor  of  the  petitioner. 

Now,  therefore,  on  motion  of  O.  R.,  attorney  for  the  petitioner, 
final  order  is  hereby  made  in  favor  of  said  petitioner,  award- 
ing to  said  petitioner  the  delivery  of  the  premises  described  in 
said  petition,  by  reason  of  the  facts  therein  alleged  and  set  forth, 
together  with  the  sum  of  dollars  costs. 

Dated  the         day  of  ,  i8     . 

\Signatiire  of  County  Judge]. 


No.  62, 

Warrant  to  Obtain  Possession  in  Summary 
Proceedings. 

To  the  sheriff  of  the  county  of  ,  or  to  any  constable  of  said 

county  of  ,  Greeting  : 

Whereas,  G.  R.  has  heretofore  presented  to  me  his  verified 
petition,  alleging  that  heretofore  C.  D.,  being  the  owner  of  the 
premises  hereinafter  described,  and  being  indebted  to  E.  F.  in 
the  sum  of  dollars,  upon  his  bond  for  that  sum,  dated  on 

the  day  of  ,  18      ,  and  payable  in  one  year  after  said 

date   with    interest    thereon    payable    semi-annually,    executed. 


'  In  New  York,  if  the  precept  is  served  otherwise  than  personally, 
§  2241  of  the  Code  of  Civil  Procedure,  must  be  indorsed  thereon. 


1024  APPENDIX   OF  FORMS. 

with  M.  D.,  his  wife,  acknowledged  and  delivered  to  said  E.  F. 
a  mortgage,  to  secure  the  payment  of  said  bond.  ^Follow  sub- 
stantially the  language  of  the  petition  in  Form  No.  59]. 

Whereupon  I  issued  a  precept  requiring  the  said  C.  D.  {or 
J,  H.),  and  each  and  every  person  in  possession  of  said  premises, 
forthwith  to  remove  from  the  said  premises,  or  to  show  cause 
before  me,  at  a  certain  time  now  past,  why  the  possession 
of  said  premises  should  not  be  delivered  to  the  said  G.  R.  ; 
\If  an  answer  has  been  interposed  and  a  trial  had,  recite  the 
proceedings  as  in  Form  No.  61],  and  no  good  cause  having 
been  shown,  or  in  any  way  appearing  to  the  contrary,  and  due 
proof  of  the  service  of  such  precept  having  been  made  to  me,  and 
I  having  made  a  final  order  awarding  the  possession  of  said 
premises  to  said  petitioner,  with  the  sum  of  dollars  costs. 

Now,  therefore,  in  the  name  of  the  People  of  the  state  of  New 
York,  you  are  hereby  commanded  to  remove  all  persons  from 
said  premises,  and  to  put  the  said  G.  R.  into  the  full  possession 
thereof. 

In  witness  whereof,  I  have  subscribed  these  presents  this 
day  of  ,  18    . 

\Signature  of  County  Judge"]. 


No.  6^. 
Sheriff's  or  Constable's  Return  Upon  the  Warrant. 

Pursuant  to  the  command  of  the  within  warrant,  I  have  this 
day  put  the  said  G.  R.  into  the  full  possession  of  the  premises 
therein  mentioned. 

Dated  the        day  of  ,  18    . 

[Signature  of  Sheriff  fr  Constable]. 

\To  be  indorsed  on  the  preceding  warrant]. 


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